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Workforce needs to step up game as interest in automation grows
“Indonesia’s labor force growth rate is slowing, which means that it will need to rely more heavily on productivity gains like those that automation provides,” the Alpha Beta-Prospera researchers wrote. Statistics Indonesia data show that Indonesia’s workforce growth has stagnated at less than 1 percent annually since 2011.
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One of the biggest concerns with Industry 4.0 is the disruption it has on the job market. McKinsey predicted that 800 million jobs would be gone by 2030 due to automation. Indonesia’s automation pace has the potential to contribute Rp 5 quadrillion to the nation’s GDP over 11 years, Australia-based advisory firm Alpha Beta and the Australia-Indonesia Partnership for Economic Development Prospera projected in a July report. (Shutterstock/File)
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s the government pushes ways to equip jobseekers with the necessary skills for employment, the need for automation in industries is growing amid a slow workforce growth rate, a new study has found.
Indonesia’s automation pace has the potential to contribute Rp 5 quadrillion to the nation’s gross domestic product (GDP) over 11 years, Australia-based advisory firm Alpha Beta and the Australia-Indonesia Partnership for Economic Development Prospera projected in a July report. Currently the pace is estimated to stand at Rp 3.2 quadrillion between 2019 and 2030.
In 2015, 28 percent of Indonesian manufacturing companies reported that they were automating manual processes, lower than Vietnam, Cambodia and Malaysia, which had about 35 percent of their companies invested in automation within the same year, according to a World Bank study.
“Indonesia’s labor force growth rate is slowing, which means that it will need to rely more heavily on productivity gains like those that automation provides,” the Alpha Beta-Prospera researchers wrote. Statistics Indonesia data show that Indonesia’s workforce growth has stagnated at less than 1 percent annually since 2011.
The study had only estimated gains from automation's labor productivity, while factors like education and skills investments would likely lead to stronger productivity growth.
University of Indonesia (UI) labor law expert Aloysius Uwiyono saw problems in attempting to propel the country’s automation growth, as technologizing tasks would force more workers to lose their jobs as they don’t possess the required skills.
