KASOSPOL UPDATE: Preparing Indonesia for the Upcoming Industrial Revolution 4.0 (Vol. 3, No. 1)

dalam Kasospol Update

For the past centuries, Industrial Revolution has caused major changes in economic, social, political, environmental, and demographic factors. The occurrence of Industrial Revolution has occurred as much as three times. The first industrial revolution took place in 1784, which is the invention of steam engine, water, and mechanical equipment for producing goods (Morgan, 2016). In 1870, the 2nd industrial revolution occurred, marked by changes and patterns of Labor Employment Division. In 1969, the experienced the 3rd Industrial Revolution, marked by the presence of inventions in the field of information technology (IT). Nowadays, the world is currently in the process towards the 4th Industrial Revolution. This is where technologies such as Artificial Intelligence (AI), science, analytics, the Internet of Things (IoT) were combined, bringing an unprecedented change to the nature of work and society in every aspect.

It can be certain that this occurrence might bring a certain challenge that needs to be addressed by world leaders to maximize its potential benefit while minimizing the negative impact. The biggest challenge that might arise from the 4th industrial revolution is the certain difficulty faced by Government as well as some stakeholders and industry to adapt and adjust to the changes in the existing system. Technology has radically changed the economic systems which include, the nature of the work itself. This change might “worse off” certain sectors of society as their workers were being replaced by machines and AI. This poses a significant challenge for the Government on how they can create a comprehensive system in order to be used by all sectors of society. Aside from technological immobility, it cannot be denied that the effects globalization has caused quite a stir in world politics. Politics are increasingly defined, by a climate of post-truth. Which means emotive political debate and opinion in some instances divide public opinion and threatened social solidarity. Moreover, other issues in the economic sector also become a serious threat. This would certainly depend on the policies adopted by the Government (Boskin, 2017).

Indonesia has experienced significant improvement in the last fifteen years. Some analysis shows that Indonesia is regarded as one of the countries that possess relatively high potential in the rise of Industrial Revolution (Kearney, 2017:6). Indonesia experienced a significant increase in global competitiveness index. Indonesia’s ranked climbed from 41 to 36 in the year 2016. This occurred due to the increase in Indonesia’s size of the market and conducive economic environment. In terms of infrastructure, Indonesia is experiencing a sustained increase in the last five years (Kearney, 2017:8). Construction of highways, railroads, ports, and the sea toll, as well as improved quality of infrastructure in the fields of digital, make Indonesia experienced an increase in global competitiveness index. In the cycle of the economy, Indonesia has also managed to create a conducive economic cycle. Indonesia gross domestic product or GDP Indonesia has increased significantly. Indonesia occupied the position of 16th in a global gross domestic product. A significant improvement compared to the year 2000 where Indonesia only placed in 27th rank for the gross domestic product (Ministry of Industry, 2018).

Based on the data that has been stated, Indonesia has a huge potential in the face of the upcoming industry 4.0. Indonesia’s economic growth rate has improved significantly despite some challenges and instability from global economic conditions that are actually still in the phase of recovery. This shows that the Government of Indonesia is persistent in responding to this issue, and keep moving forward to ensure Indonesia becoming a global leading economy. The Government’s optimism in this regard is certainly positive and this might bring positive impact towards the country. However, despite all the optimism that has been shown, it is imperative to note that Indonesia is still experiencing many challenges that might threaten Indonesia in the face of the industry 4.0. Based on the data taken from the World Economic Forum Global Transformation Mapping, Indonesia needs to address certain challenges in order to maximize the potential of industry 4.0. To address this, clean and transparent Government and increased social cohesion and solidarity are needed. Problems that currently persist in this status quo is the lack of economic diversification. Most economic sectors in Indonesia is too dependent on import and export commodity goods to some extent. Dependence of Indonesia in commodity goods both in terms of exports and imports are certainly not going to build Indonesia’s economy in the long term. Indonesia needs to build infrastructure and needs to continue to innovate wide range of technology. Digital infrastructure development is crucial to help diversify economies in Indonesia. Indonesia needs to slowly shift in exports and imports from commodity goods into manufactured goods to ensure economic longevity. Moreover, Indonesia also needs to fix the bureaucratic system of its government. The Indonesian government bureaucracies that tend to corrupt and making complex and inefficient regulations undermine the corporation in doing business and investment in Indonesia. The government needs to reform its bureaucracy. The creation of complex and inefficient regulations might distance Indonesia in the face of global competition. Other challenges lie in quality improvement of its people. Indonesia is a country with the fourth largest population size. However, the quality of education still classified as minimal. This can be seen from the human development index of Indonesia which possess quite low in its rank. According to data from the UN year of 2015, suggest that out of 188 countries, Indonesia still in 113th place in human development index (UNDP, 2016). These data served as an evidence that despite the optimism that has been proclaimed, Indonesia still has a handful amount of challenges that need to be addressed with a comprehensive solution. Those challenges are quite imperative and have threatened Indonesia in the face of industry 4.0, seeing that Indonesia still needed improvement in the fields of infrastructure, education, and economic diversification. In the face of a tight and dynamic global climate situation, Government and all sectors of society must embrace openness. Openness to changes, technology development is crucial in preparing for the occurrence of the 4th industrial revolution. Openness, in particular in the field of technology and innovation, is crucial in developing and preparing Indonesia in the face of industry 4.0. The level of readiness of Indonesia relies on the reaction and implementation of policies conducted by the Government. The Government, stakeholders and all sectors of society must contribute to help achieve the maximum potential of industry 4.0.



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Kearney. (2017). Bringing The Fourth Industrial Revolution to Indonesia

UNDP. (2016). Human Development Report 2016


Boskin, J. Michael. (2017). “What to expect for the global economy in 2018?”. Accessed through
https://www.weforum.org/agenda/2017/12/what-to-expect-for-the-global-economy-in-2018 (on 20th May 2018 19.30 WIB).

Morgan, Jacob. (2016). “What Is The Fourth Industrial Revolution?”. Accessed through https://www.forbes.com/sites/jacobmorgan/2016/02/19/what-is-the-4th-industrial-
revolution/#549e6b94f392 (on 20th May 2018 pk. 19.00 WIB).

Mapping Global Transformation. (2017). Accessed through
https://toplink.weforum.org/knowledge/insight/a1Gb0000000LihrEAC/explore/dimension/a1Gb00000015QNrEAM/summary (on 20th May 2018 pk. 19.40 WIB).

Tristan Prodjomaroeto, Political Science 2017

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