Representatives from pharmaceutical, IT, insurance and energy companies met with key government stakeholders on March 12-13 to discuss Indonesia’s industrial revolution 4.0 (IR 4.0), when AmCham Indonesia, the US Chamber of Commerce and its Global Innovation Policy Center (GIPC) jointly headed the 2019 Industry 4.0 Mission.
The mission also marked the kick-off of AmCham and the US Chamber’s Initiative Indonesia program for 2019, and saw the launch of the 2019 US Chamber International IP Index, “Inspiring Tomorrow.”
The mission included a series of roundtables with key government stakeholders including the Agency for the Assessment and Application of Technology (BPPT), the Indonesian Institute of Sciences (LIPI), the Ministry of Communications and Informatics, the Financial Services Authority (OJK) and the House of Representatives (DPR).
A number of organizations were also involved in the discussions, including the Indonesian E-commerce Association (IdEA), the Fintech Association, IPMI International Business School, Sampoerna University, EY, PwC, and BahasaKita. The roundtables were followed by visits to the Minister of Manpower Hanif Dhakiri and Minister of Communications and Informatics Rudiantara, and a briefing with Shinta Kamdani of the Indonesian Chamber of Commerce and Industry (KADIN), Bambang Adi Winarso of the Coordinating Ministry of Economic Affairs and Ngakan Timur Antara of the Ministry of Industry.
IR 4.0 focuses on the digitalization of industrial technology centered on the use of machine data for analytics, processing and troubleshooting to allow more productive, efficient and higher quality production at lower costs. During the mission, we sought out how the government was preparing the nation to embrace IR 4.0 and the way forward for companies.
The US Chamber’s Global IP Index 2019, “Inspiring Tomorrow,” was launched during the mission. US Ambassador to Indonesia Joseph R. Donovan and Director General for Intellectual Property (IP) at the Ministry of Law and Human Rights Freddy Harris were the keynote speakers for the launch, which was well-attended by representatives of the government, associations, local companies and think-tanks.
A closer look at Making Indonesia 4.0
The first day of the mission focused on taking stock of the progress made after the release of the Making Indonesia 4.0 blueprint by the government in April 2018. The discussions were clustered into four key areas: innovation, human resources, information and communication technology, and financial infrastructure, and a diverse group of government and company representatives dug deeper into the barriers the country needs to overcome in adopting IR 4.0.
The readiness of industries in embracing IR 4.0 was one of the top issues during the roundtables. The participants discussed how the country should introduce good parameters for assessing industry readiness, and how the relevant ministries should also be more hands-on to assess at which stage their industries are in terms of IR 4.0 implementation. Geographically, more focus is needed in remote areas and outside Java as the introduction of technology is still quite hard to implement. However, an optimistic view was shared among the participants that the Palapa Ring Project will accelerate the adoption of IR 4.0. Representatives of the communications ministry were optimistic that the project would be finished by June 2019.
It was inevitable that manpower would be one of the forefront issues in the adoption of IR 4.0. Discussions revealed that Indonesia is in need of greater adoption of a curriculum that is experiential learning and case study focused to cultivate a generation that is ready for IR 4.0. There is the ongoing challenge of a disconnect between what industry needs and what graduates can provide in the labor market.
Manpower minister Hanif Dhakiri said the ministry is continuing to push an industrial transformation strategy in Indonesia’s labor market. The ministry has also asked the Ministry of Finance to provide tax deductions/incentives for companies that are willing to invest more in human resources development.
All about data
The delegation shared its worries that inward-looking policies could hinder the adoption of IR 4.0 in Indonesia. Flexibility in managing data is paramount, the group felt.
However, uncertainty over the revision of Government Regulation No. 82 of 2012 (GR 82) has left companies pushed toward data localization. In roundtable discussions local companies and associations shared their concerns that such localization is a big cost burden for companies, while start-ups will be hardly hit by this requirement.
The Personal Data Protection law draft attracted great attention during the mission. Both the Deputy Chairman of DPR Commission I Satya Yudha and information minister Rudiantara said the draft discussions will likely happen this year. Satya said the draft was the DPR’s top priority and it would try to enact it before the parliamentary change in late 2019.
Global IP Index Launch 2019
The mission also featured the launch of the 2019 US Chamber International IP Index. The index evaluates the IP infrastructure in each economy based on 45 unique indicators, which are critical to the growth of effective IP systems.
US Ambassador to Indonesia Joseph R. Donovan and Director General for IP Freddy Harris were the keynote speakers, highlighted the importance of IP protection to support economic growth.
“An economy that doesn’t protect the property rights of innovators will inevitably fall behind in the race to develop new technologies,” said Donovan. “Working together, US and Indonesian innovators can change every aspect of our countries’ economies for the better.”
This was echoed by Freddy: “Please extend our friendly message to American business and investors not to hesitate to invest in Indonesia, because as a State Member of WIPO [World Intellectual Property Organization] and WTO [World Trade Organization], Indonesia highly respects the protection of IP that is in line with international principles.”
Indonesia was ranked at 45 out of 50 countries surveyed this year, with highlights over its newly enacted Patent Law and IP enforcement and concerns about a number of issues.
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Inspiring Tomorrow: 2019 International IP Index Launch
