Arsjad Rasjid, Head of KADIN

Society 5.0 is the “solution” to Industrial Revolution 4.0

From the perspective of Arsjad Rasjid, Head of KADIN (Indonesian Chambers of Commerce and Industry)

How will the collaborative strategy/roadmap between the industry and the government to strengthen digital economic sector for supporting Indonesia’s economy?

KADIN has mapped and determined the roadmap for digital economy development. The top priority is reinforcing the ecosystem of the digital economy at the local and national levels. Program Coordination and Synergy with the government is the key to accomplishing this goal. 

In general, this program consists of education and digital literacy specific for the industry players and MSMEs, infrastructure for digital asset trading across the country and beyond, closed loop system or close mentoring between the parent company and MSMEs, and research and development for perfecting a conducive regulatory framework.

How can accelerated digital transformation contribute to economic recovery due to the COVID-19 pandemic?

Despite being a significant challenge to the economy, the COVID-19 pandemic has been the catalyst in boosting the digital economy. Digitalization plays a pivotal role in economic recovery due to the COVID-19 pandemic. 

SMEs adoption of e-commerce contributes to the ease of access to more supplies of raw materials and market access across Indonesia. Optimizing Industry 4.0 in SME at the middle to bigger scale will improve productivity by 10-20%. For example, data integration allows the business process to use machine analysis and data visualization in order to improve performance and efficiency, and eventually to let the business strive. Accordingly, digitalization has, directly and indirectly, accelerated the rate of economic growth, particularly due to the pandemic.

Indonesia will take advantage of demographic bonus in 2030. How do you encourage the readiness of digital talents to seize the opportunity of the digital economy optimally?

The Industrial Revolution 4.0 poses challenges in the business world, such as lack of skilled workforces, security issues in technology communication/ICT, poor stability of production machines, the inability of stakeholders to adapt to change, and countless job losses due to automation. 

Society 5.0 is an era where technology is immersed within humans. Society 5.0 is the solution to Industrial Revolution 4.0. Most people assume that Industry 4.0 is associated with sophisticated machines that will eradicate plenty of manual jobs. Society 5.0 is expected to create a new value through the development of cutting-edge technology and bridge the gap between humans and economic issues in the future. 

In order to seize the opportunity and address the challenges of the Industrial Revolution 4.0, Indonesian people are required to have literacy in data and technology while moving forward to Society 5.0.

When accelerating comprehensive digital transformation, what sort of strategies or collaborations are implemented to achieve skill and technology transfer from overseas to Indonesia?

KADIN collaborates with other countries in the economic sector to always encourage technology transfer among countries in the form of comparative study, seminars, and training for local entrepreneurs and MSMEs. Collaborative programs are expected to equip the entrepreneurs and executives of both conventional and digital businesses in Indonesia to transform their businesses to compete and boost the country’s economy in the digital era.

What should the government prepare regarding the funding scheme and budget for digital transformation?

In promoting digital transformation, the government focuses on building strong and inclusive digital infrastructure to accelerate the extension of internet access and services. In this regard, the Government of Indonesia has prepared three funding schemes. First, Universal Service Obligation (USO) is donated from telecommunication service providers. Second, the Non-tax State Income from ICT sectors, and at last, the State Budget.

These three funding schemes reflect the government’s strong commitment to achieving equal distribution of infrastructure for inclusive and well-distributed telecommunication networks, and not a single area will be overlooked. In addition to infrastructure, the State Budget reflects the government initiatives to keep pushing digital transformation in economic and government sectors, building National Data Center, and implementing Electronic-based Government System (SPBE). The budget is allocated to the expenditure of the ministry agencies and Transfer to Region and Rural Funds (TKDD).