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Do we lag behind in the age of 4.0?
Just because Indonesia has tremendous potential for Industry 4.0 it doesn’t mean that the transformation is a given. President Joko “Jokowi” Widodo recently said that we should abandon old methods. In that spirit, the government and the private sector must collaborate in a much bolder manner to catalyze the 4.0 transformation.
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Illustration of Industry 4.0. (Shutterstock/File)
I
n 1965, South Korea came up with a plan that one economist called “the worst business proposal in human history” and it was not hard to see why. Seoul planned to create a state-owned enterprise that produced steel at the time when the country’s gross domestic product per capita was less than half of Ghana’s and its exports were either natural resources or basic manufactured products.
As stunned as people were when they heard about the plan, what was even more astonishing was how this plan eventually turned out. This laughable proposal gave birth to POSCO, which is now the world’s fifth-largest steel producer.
Just like South Korea then, Indonesia today faces similar incredulity. Last year the government hatched a national strategy in promoting Industry 4.0. Skepticism abounds, the detractors argue that Indonesia is just not cut out for Industry 4.0. The country is still not rich, reliant on raw materials and its technological development is still rudimentary.
Accordingly, the critics give roughly the same advice to Indonesia that South Korea once received, which was to just step aside and let more advanced countries lead the way.
Imagine the critics’ consternation when the World Economic Forum (WEF) rebuked their judgment. The WEF has designated 26 factories worldwide as the “lighthouses” at the forefront of Industry 4.0., two of which are from Indonesia, namely Petrosea in Kalimantan and Schneider Electric in Batam.
The WEF stated that Petrosea “deployed multiple fourth industrial revolution use cases” while Schneider “developed a full spectrum of fourth industrial revolution”. This is nothing short of jaw-dropping, Indonesia has as many lighthouses as the United States, Germany and Italy and actually more than South Korea whose only lighthouse is POSCO. In Southeast Asia, Indonesia is the only country with lighthouses and in the world only China hosts more lighthouses.
Indonesia also has another asset up its sleeve, its vibrant digital economy. A hallmark of Industry 4.0 is not automation but connectivity, (i.e. big data analytics) which is linked to the digital economy.
