GE Indonesia

Future of Work in
Indonesia
2 Future of Work in Indonesia

Contents

03 Executive Summary

05 Indonesias Macroeconomic
Outlook

08 The Future of Work

17 How Digital-Industrial Can Help

Shape Indonesias Future

18 The Road Ahead: Steps to Take

19 Conclusion
 Future of Work in Indonesia 3

Indonesia is a cornerstone of Southeast Asias economy and an important player in the

Indonesia Future of Work
global economy. Thanks also to sound economic policies, it has enjoyed robust rates of
economic growth over the past several years.
Executive Summary
But Indonesia must do more. To provide opportunities to its fast-growing population,
and to succeed in an increasingly competitive global economy, Indonesia must raise
efficiency, accelerate productivity growth, diversify its economy and reduce its
Indonesia is a cornerstone of Southeast Asias economy and an important player in
dependence on fossil fuels.
the global economy. Thanks also to sound economic policies, it has enjoyed robust

rates of economic growth over the past several years.
At the same time, a new generation of digital technologies has begun to reshape global
industry, from power generation and distribution to health care to transportation to
But Indonesia must do more. To provide opportunities to its fast-growing
manufacturing. These innovations, that GE refers to as The Future of Work, include the
population, and to succeed in an increasingly competitive global economy,
Industrial Internet, Advanced Manufacturing, and the Global Brain. Together, they
Indonesia must raise efficiency, accelerate productivity growth, diversify its
leverage the power of big data to improve the efficiency of industrial equipment and
economy and reduce its dependence on fossil fuels.
systems, and to build stronger partnerships between humans and machines.

At the same time, a new generation of digital technologies has begun to reshape
Indonesia has a tremendous opportunity to accelerate the adoption of these new
global industry, from power generation and distribution to health care to
technologies as it bolsters its investment in critical infrastructure, from power
transportation to manufacturing. These innovations, that GE refers to as The Future
generation and distribution to transportation to health care to agriculture, where
of Work, include the Industrial Internet, Advanced Manufacturing, and the Global
important new projects are in the pipeline.
Brain. Together, they leverage the power of big data to improve the efficiency of

industrial equipment and systems, and to build stronger partnerships between
These innovations offer Indonesia the opportunity to leapfrog into the new generation
humans and machines.
of digital industrial technologies. These would raise the efficiency of infrastructure, and
power a stronger, more diversified and distributed manufacturing ecosystem that could
Indonesia has a tremendous opportunity to accelerate the adoption of these new
form the cornerstone of an ever more balanced, diversified and competitive economy.
technologies as it bolsters its investment in critical infrastructure, from power

generation and distribution to transportation to health care to agriculture, where
To unleash the potential of these technologies, efforts should concentrate on bolstering
important new projects are in the pipeline.
and digitally-enabling infrastructure; further improving the business environment; and
strengthening the education and training system. Indonesias government is already
These would raise the efficiency of infrastructure, and power a stronger, more
acting on all three fronts; momentum should be maintained and intensified.
diversified and distributed manufacturing ecosystem that could form the

cornerstone of an ever more balanced, diversified and competitive economy .
Collaboration between government, private sector, education institutions and other
stakeholders can be instrumental to the success of this strategy. This is especially true
in the area of education and training, where Indonesia like most other countries needs
to better align the supply of skills with the evolving demand of industries transformed
by innovation.

Leveraged through smart and effective collaboration across all stakeholders, this new
wave of digital-industrial innovations can shape Indonesias Future of Work and pave
To provide opportunities to its fast-
the way for stronger sustained growth in economic activity, employment and living
standards.
growing population, and to succeed in an
increasingly competitive global economy,
Indonesia must raise efficiency, accelerate
productivity growth, diversify its economy
and reduce its dependence on fossil fuels.
4 Future of Work in Indonesia

To unleash the potential of these technologies, efforts

should concentrate on bolstering and digitally-
enabling infrastructure; further improving the business
environment; and strengthening the education and
training system. Indonesias government is already acting
on all three fronts; momentum should be maintained and
intensified.

Collaboration between government, private sector,

education institutions and other stakeholders can be
instrumental to the success of this strategy. This is
especially true in the area of education and training,
where Indonesia like most other countries needs to better
align the supply of skills with the evolving demand of
industries transformed by innovation.

Leveraged through smart and effective collaboration

across all stakeholders, this new wave of digital-industrial
innovations can shape Indonesias Future of Work and
pave the way for stronger sustained growth in economic
activity, employment and living standards.
 Future of Work in Indonesia 5

A. Indonesia
macroeconomic
outlook
Indonesia is a strong economic presence in Southeast
Asia, leading the region in GDP and holding a top-20
spot in the global economy. As the fourth most populous
country in the world, Indonesia has shown resilience in
the face of commodity price weakness in recent years
because of many economic advantages, including a
favorable demographic profile and large untapped natural
resources. President Joko Widodos administration has
made it an important point to move away from years
of protectionist favor of a more open and adaptable
economy. Strong investment and private consumption will
continue to drive economic growth over the coming years,
though a large fiscal deficit and a sluggish external sector
could pose significant challenges.

Real GDP growth in Indonesia, which makes up about 36%

of total GDP among the Southeast Asian nations, has held
steady around 5% throughout the past few years and is
expected to maintain this trend at least in the short-term.
Five sectors have contributed to nearly two-thirds of total
growth in the past two years: manufacturing, construction,
finance, information and communication, and wholesale
and retail trade and repairs. Services and industry
each make up about 43% of total GDP, with agriculture
accounting for the remaining 14%. Still, nearly 40% of
labor is allocated toward the agriculture sector, allowing
for a significant opportunity to attract and train workers to
more forward-looking and digital-oriented fields.
 6 Future of Work in Indonesia
Strong private consumption has been an important
component of Indonesias economy, comprising
nearly 60% of total GDP. The countrys sizeable
middle class helps support a healthy private sector,
with a young and growing working age population
fueling consumer spending. The population will
continue to increase over the coming decades,
though at a slowing pace. At the same time, the
savings rate of the average Indonesian remains
elevated, helping to mitigate downward pressures
on spending during periods of economic malaise.
Indonesia also benefits from healthy tourism,
especially from China, which adds to the robust rate
of consumption.
The government has implemented an economic
strategy focused on boosting investment in
infrastructure and manufacturing. As such,
investment has been a key driver of growth, with
Japan being one of the largest sources of inflows.
Manufacturing still has room to grow, as capacity
has been running approximately 30-35% below
potential, and thus investment will remain solid in
the sector.
Supporting the governments investment strategy
has been the relatively stable rupiah in the past
year, even though the currency had depreciated
significantly between 2013 and the end of 2015. A
strengthening USD will continue to put downward
pressure on the rupiah throughout the year;
however, a gradual appreciation is expected to
occur in late 2017 and thereafter as the central
bank tightens monetary policy. Interest rate
increases are likely in 2017 in order to combat
currency weakness as well as inflationary pressures
stemming not only from a stronger USD but also
from rising oil prices, given that Indonesia is a net
oil-importing country. The good news is that foreign
exchanges reserves are substantial and are more
than enough to provide a safeguard in the case of
various risk scenarios determined by the IMF.
Indonesia also has encouraging trade prospects,
with plans to finalize talks on a free trade
agreement with the EU as well as a separate
agreement with Australia. Furthermore, the
government is working to reduce non-tariff barriers
with India. The trade surplus is expected to remain
relatively stable as higher commodity prices
boost export revenues while robust household
consumption supports\strong demand for imports. Still,
the government is trying to target export-led growth with a
variety of reforms, including a repeal of the three-year mining
ban in January 2017 (fuels and mining comprise about 25%
of total exports). Other reforms include lowering night-time
electricity tariffs for manufacturers (manufactured products
make up nearly 40% of total exports), simplifying arduous
permits, and boosting incentives in special economic zones.
Despite Indonesias compelling advantages, the economy
is faced with a range of challenges. While macroeconomic
stability has helped fortify Indonesia as an attractive spot
for foreign investment among emerging markets, many
external players continue to face regulatory obstacles in a
relatively weak business environment. According to the World
Economic Forums 2016 Competitiveness Report, corruption,
government bureaucracy, infrastructure supply, and access
to financing were cited as the most problematic factors for
doing business in Indonesia. With a Global Competitiveness
Index rank of 41 out of a total 138 countries, Indonesia ranks
worse than both China and India on institutions, labor market
efficiency, and health and primary education. There is also
the lingering risk of social tensions, as both religion and race
issues escalated in late 2016. In an otherwise weak business
environment, this poses a risk to investor confidence should
the situation deteriorate. Improvements in governance at the
local level which comprises about half of all government
spending will help reduce some of these barriers, increase
stability, and improve business conditions for outside
investors.
Another challenge for the government is reducing its large
fiscal deficit, where weak resource revenue and a small tax
base may eventually weigh on capital spending. A sluggish
external sector, in particular China, puts renewed downward
pressure on Indonesias commodity exports. Some relief may
naturally arise from the modest recovery in global commodity
prices, though this will be limited by a gradual slowdown in
China. Easing the fiscal situation will also require major reform
of the current tax system in order to improve registration,
collection, and enforcement. Other reforms that might be
more politically challenging, along with adjustments in the
labor market, are facing greater resistance.
In order to successfully address its current economic
challenges, Indonesia needs to boost productivity growth
and potential economic growth. It should do so in a way that
is forward-looking, creating the conditions for sustainable
success in a rapidly changing economic and technological
environment. This could be best achieved by leveraging the
new wave of digital innovations that is beginning to transform
industry, as we discuss in the following sections.
 Future of Work in Indonesia 7

B. The Future of Work

Digital innovations have already made a profound difference to our personal lives,
in ways that have by now become familiar to many of usand often even taken for
granted. What is less appreciated is that similar innovations are now beginning to
transform industry, and the economy overall. At GE, we refer to this new wave of
innovations as the Future of Work. The Future of Work is composed of three mutually
reinforcing trends.

The Industrial Internet

The Industrial Internet merges big data and cloud-based analytics with industrial machinery, resulting in greater
efficiency and increased operating performance. The principle is simple: industrial assets like power generation turbines,
jet engines and medical devices, are equipped with electronic sensors, which collect enormous amounts of data on the
functioning of the machines as well as on the external environment.

The data are then processed with specialized software analytics, yielding new insights on the machines performance.
These insights allow us not just to operate the machines more efficiently, but also to predict with much greater accuracy
when something is likely to go wrong, and how. This enables a shift from schedule-based maintenance, where you
service a machine at pre-specified time intervals, to condition-based, predictive maintenance: you service the machine
only when needed, and exactly when needed. We can fix machines before they break or malfunction, rather than
having to intervene in a corrective way afterwards. Preventive maintenance delivers significant reductions in unplanned
downtime, the amount of time when a machine needs to be taken off-line for repairs, disrupting operations and imposing
financial costs on the operator and inconvenience to the customer.
 8 Future of Work in Indonesia

The insights are not limited to individual machines, but

extent to entire systems: for example, industrial internet
solutions allows a hospital to have full visibility on the
utilization of health care devices, operating rooms
and beds, so that admissions and procedures can be
scheduled more efficiently. This amounts to better
utilization of existing capacity, and results in significant
reductions in patient waiting times and in a hospital, a
longer wait can have serious health consequences.

With industrial internet technologies, machines become

intelligent, interactive and even social, able to react to the
environment and to communicate and collaborate with
each other and with humans.

1 Sources: EIU, BMI, Macrobond, Oxford Economics

A powerful example comes from GEs Renewables: as the wind shifts, the turbines on a wind farm communicate and
adjust the pitch of their blades in a coordinated way, so as to maximize the energy output for the entire wind farm, rather
than every single turbine acting in isolation to maximize its own output, and ignoring the impact of its actions on the way
that the wind then passes through to other turbines.

The best demonstration of the power of these new technologies is the Digital Twin: this is the software double of an
industrial assetfor example a jet engine blade, or an entire jet engine, or an entire power station. The crucial element
is that the Digital Twin is not the software representation of a generic machinesay an average, theoretical jet engine.
It is the representation of one specific and concrete machinelike the same exact jet engine sitting under the left
wing of the airplane I flew on this morning. The Digital Twin includes all data on the characteristics and history of that
specific machine, enabling the best possible knowledge and understanding of the machine itself. Moreover, Digital Twins
can communicate with each other, gaining access to the accumulated experience of all similar machines. Facing an
unexpected condition, the Digital Twin of a gas turbine can consult the Digital Twins of all other similar turbines, to find
out if any of them has ever experienced anything similar, and compare notes.
 Future of Work in Indonesia 9

The Digital Twin can also have access to market

information, for example on current demand and
supply conditions and market pricing. Based on all this
information, the Digital Twin will be able to propose to the
human operator different strategies: for example, running
a gas turbine at greater intensity to take advantage of
a window of high demand and prices, given the cost in
terms of additional wear and tear and therefore additional
repair and maintenance. Progress in user interface
technology is making it increasingly easy and intuitive
for humans to collaborate with Digital Twin including
through the use of Virtual Reality and Augmented reality.
An additional important feature of industrial internet
solutions is the ability to optimally allocate computations
and decision-making. For example, deciding which data
on the performance of a machine should be analyzed at
the edge, meaning in the machine itself or very close
to it, and which ones should be processed in the cloud;
or what decisions should be taken independently by a
Digital Twin and which ones should instead be referred to
a human operator. Speed, safety, and complexity of the
decision are some of the elements that come into play.
Advanced Manufacturing
Advanced manufacturing is a combination of new
production technologies and materials, as well as a
digitally-enabled reorganization of the entire production
process. Additive manufacturing, or 3D-printing is
probably the most well-known aspect, and it represents a
major revolution in it self.
Additive manufacturing brings two key advantages:
i. It accelerates the cycle
of design prototyping
production.
Once a prototype is printed and tested, the design can be
changed and a new product printed simply by changing
the digital blueprint, without the need for any modification
of the actual production machine. This shortness
production times, allows to try and fail faster and at
lower costs, and enables greater speed in responding to
changes in customers needs.
 10 Future of Work in Indonesia
ii. It allows for the production
of entirely new products, with
different physical properties.
This is because the process of layering material is
fundamentally different from that of carving material and
putting together separate parts. With 3D printing we can
use different industrial designs and different materials,
creating completely different parts. The benefits are
substantial. GE Aviation has been an early adopter of the
technology and is spearheading the additive effort within
GE. Thanks to 3D printing, GE Aviation is able to reduce
the weight of certain componentsby a stunning [84%] in
the case of jet engine brackets, that we will mention again
below; and to reduce the number of parts that need to be
assembled to manufacture some components.
Advanced manufacturing is more than additive
manufacturing. It includes the deployment of a Digital
Thread, a system of electronic sensors and software
analytics that connect every element of the factory floor,
including workers and machinery, and connects the
factory floor to supply chains and distribution network.
This Digital Thread, already deployed in GEs Brilliant
Factories, helps achieve a safer and more efficient
organization of the workflow; it also allows the factory to
react faster and more effectively to changes in market
conditions or to unexpected disruptions. For example, if
changes in market demand suggest the introduction of a
different product, the Digital Thread allows management
to simulate how the workflow would need to be
reorganized, and to estimate the cost consequences; or
if an element of the supply chain is suddenly cut off by a
natural disaster or by a protectionist measure, the Digital
Thread allows to quickly identify different sources and any
other adjustments to the production process that might be
needed.
 Future of Work in Indonesia 11

Global Brain
The Global Brain connects the collective
intelligence of human beings across the
globe through digital communication,
resulting in crowdsourcing, open
collaboration and a much faster pace of
innovation. It encompasses new forms
of collaboration, but also a new way of
working. It can allow individual workers
greater flexibility and the opportunity
to capitalize on their skills in a more
entrepreneurial way.

One powerful example of the global

brain at work ties together GE Aviation
and Indonesia: in 2013, GE launched
a competition on the engineering
platform GrabCAD. GE Aviation
disclosed the current design of its jet
engine bracket, and challenged the
engineering community to come up
with a better design, namely one that
could be produced with 3D printing and
would be lighter and at least as robust
as the existing one. The winner of the
competition was a young engineer from
Indonesia with no prior experience in the
aviation industryhis design was 84%
lighter than the existing one.

The GE jet bracket examples illustrates

the basic power of the global brain: it
allows a much wider pool of talent to
help address specific challenges, greatly
improving the chances of a better
solution.
The global brain is set to become even
more powerful as economic growth
extends to tens of millions more people
across the globe access to the internet
and the time to take advantage of
it, since better access to food, clean
water, power and healthcare will free up
precious hours. Millions more people will thus join the ranks of
those who can both tap and contribute to the global stock of
knowledge.
The global brain can also interact with advanced
manufacturing technologies to create new, more flexible
forms of employment. For example, additive manufacturing
will redefine economies of scale and enable micro-factories
and a new generation of entrepreneurial artisans and services
activities; which will be greatly facilitated by the ability of
entrepreneurial workers to leverage the knowledge and
collaboration of other individuals across the globe.
 12 Future of Work in Indonesia

C. How Digital-Industrial
can help shape Indonesias future

These new technologies can be especially helpful to emerging markets like Indonesia:

i. The relatively lower
installed base of
investment means that
Indonesia can more
quickly embody the new
technologies into its capital
stock by stepping up the
pace of investment;
ii. This in turn implies that
Indonesia can, in a number
of areas, leapfrog to more
competitive innovations
rather than adopting
technologies already
diffused in other countries;
iii. Digital-industrial iv. Digital-industrial
technologies have a technologies
degree of openness and are especially powerful
flexibility that can help in sectors that are
countries like Indonesia crucial for Indonesias
bypass existing gaps economic growth: energy,
in infrastructure, and transportation, health care,
to tackle some of the and manufacturing.
challenges posed by the
countrys geographic
configuration;

Powering
Indonesias power sector can be a primary
beneficiary of the Future of Work technologies. A
reliable and affordable power supply is essential
for faster economic development. The data show
a strong positive correlation between a countrys
Quality of electricity supply index calculated by the
World Economic Forum and its per capita income
level

Digital technologies are set to transform the entire

energy value chain, from generation to distribution
to consumption. This transformation will involve
gradually connecting all the elements of the energy
value chains to the industrial internet. This will allow
energy operators and policymakers to have much
better visibility on demand, generation capabilities,
and all relevant environmental conditions.

New digital technologies can help from the very beginning,
starting with the design and siting of centralized power
plants. These decisions can be informed by projections
on the distribution of power consumption and on load
demand. In the case of renewable power generation,
digital models will help optimize the location based
on environmental conditions in ways that are much
more efficient: for example, in a Digital Wind Farm we
can customize each individual wind turbine based on
its unique location in the farm. This can be done by
integrating advances in digital infrastructure (cloud
computing, weather simulation algorithms, satellite
topology images) with hardware technologies (modular
turbines that allow different configurations such as hub
height, blade length and generator rating). The location
decision for a centralized power generation station will
also take into account plans for the optimization of the
transmission and distribution network.
Once the power plant is in operation, digital tools can
enhance its performance and profitability. They allow
to track and maintain historical performance data and
baselines for all the individual pieces of equipment as well
as for the entire plant. This will help identify deviations
from the norm and schedule preventive maintenance
operations so as to avoid outages. Digital Twins will be
able to adjust the operating parameters of each machine
in real time, based on performance and environmental
conditions, so as to maximize efficiency and minimize
cost. Digital tools can also help improve fuel procurement
and storage, which can account for up to 90% of a plants
operating cost.
Industrial internet solutions can also transform the
traditional distribution infrastructure into a Digital Grid,
where software solutions help enhance grid reliability,
reduce losses, and improve outage response. Digital
tools can also accelerate and facilitate the integration of
distributed power generation resources into the grid.
These digital solutions can provide tremendous value
to Indonesia. They can help the power sector optimize
fuel consumption, thereby making it less exposed to
the fluctuations in global fuel prices. They can improve
the reliability of the electricity grid, which in turn would
facilitate the development of a stronger manufacturing
sector. And they will help lower electricity prices for both
companies and consumers, helping to improve Indonesias
Future of Work in Indonesia 13
competitiveness and unburden the budget from the
weight of fuel subsidies.
Indonesia has launched an important program
designed to provide an additional 35 GW of power
capacity by 2019 to reduce the incidence of electricity
shortages, and to reduce the countrys dependence on
fossil fuels.
The program is supported by tailor-made regulations
and includes the development of around 210 power
plant projects across the country: 10 GW of project
will be directly managed by the State-owned power
company PT PLN (35 projects), while private companies
are invited to participate in 25 GW of projects (74
projects). 59 projects will take place in Sumatra state,
34 in Java, 49 in Sulawesi, 34 in Kalimantan and 34 in
eastern Indonesia.
Out of the 35 GW planned, coal-fired power plants
will represent 20 GW, gas-fired project 13 GW and
renewable energy sources 3.7 GW, split in 2.4 GW of
hydropower, 1.2 GW of geothermal energy and 120
MW of wind electricity capacity. The Government
plans that the construction of the 20 GW of coal-fired
power capacity should increase the need of 80-90 Mt/
year of coal, of which 40% are expected to be supplied
internally. The projects are estimated to cost about
IRup1,120bn (US$88bn).
New digital technologies have the potential to greatly
enhance the efficiency of the new power generation to
be installed, as well as how the additional electricity is
distributed and utilized. Indonesias power sector will
have to cope with sustained increases in electricity
demand as the economy continues to expand
electricity demand growth in 2015-2019 is predicted
to reach 8.7%/year, on average. New digital-industrial
technologies can therefore play a key role in ensuring
that new investments in the sectors can achieve the
twin objectives of ensuring sufficient and sustainable
power supply and reducing Indonesias dependence on
fossil fuels.
 14 Future of Work in Indonesia

Source: Wood Mackinsey

Moving
The rail transportation sector can also benefit from digital solutions at both the asset and network level.

Industrial internet tools can help reduce downtime, improve efficiency and lengthen the life of rolling stock. New digital
solutions have the ability to monitor and detect in real-time broken rails, flat wheels, hot wheel bearings using sensors
and video analytics and provide immediate notification to the monitoring centers. They can constantly monitor the health
and efficiency of individual locomotives, which allows network managers to make better and faster decisions on how to
allocate different locomotives to specific trips, thereby reducing delays. Data insights also enable operators to optimize
speed along the journey so as to reduce fuel consumption.

These efficiency improvements are made possible by a
new generation of digital systems such as GoLINC, s a
network communication and application management
platform that turns any locomotive into a Mobile Data
Center. Its been referred to as the brain of the train and
has been installed on more than 7,000 locomotives to
date. It has the ability to link systems both on the trains
and off the trains, and is compatible with different OEM
equipment.
Curing
Digital industrial solutions have also started to transform
the world of health care. They can improve the
management of hospitals, through real-time tracking of
the location and conditions of individual pieces of medical
equipment and hospital beds. Even just such a simple but
seamless monitoring and tracking of physical assets yields
significant improvements in the scheduling of admissions
and patient procedures, resulting in reduced waiting times.
Digital solutions allow several specialists to collaborate on
the diagnosis and treatment of a patient through secure
cloud-based communications, enabling a more efficient
teamwork and resulting in better quality care.
Digital solutions also enable a more effective distributed
delivery of health care, something that could be especially
beneficial given Indonesias geographic characteristics.
Industrial internet technologies allow specialists
in a centralized location to monitor the health and
performance of medical equipment in several remote
locations;
Future of Work in Indonesia 15
the specialists can then
remotely guide local
personnel on how to operate
andwhen necessary
address malfunctions of the
equipment.
Manufacturing
Digital industrial solutions can also help Indonesia
accelerate the development of a stronger and more
diversified manufacturing sector. New production
technologies such as additive manufacturing, combined
with the Digital Thread connecting all elements of a
factory floor, are set to redefine economies of scale; this
should enable to produce in an economically efficient
way at lower scales, resulting also in greater flexibility
on the location of production plants. Moreover, new
labor-augmenting technologies will help increase
the productivity of workers at different levels of the
skills distribution, also by giving them better access to
information, knowledge and collaboration with colleagues.
For example, wearable Augmented-Reality devices can
already provide instant training, guiding workers through
complex procedures of assembly, maintenance and repair.
Digital industrial tools can also help record maintenance
and repair procedures as they are carried out, creating
a searchable repository of hands-on experience that
workers can then easily and rapidly access.
 16 Future of Work in Indonesia

Digital tools can also help workers to immediately tap the expertise of colleagues
in remote locations: the remote colleagues would be able to see and assess the
situation, and help address and resolve the issue.
These improvements in workers abilities will go hand in hand with improvements in machine performance, thanks
to the Digital Twin advances we discussed earlier in this paper.

Taken together, these advances could help Indonesia accelerate the development of a stronger and more
diversified manufacturing sector. This could start with the creation of ecosystems of suppliers and partners
built around Indonesias established industries, such as Oil and Gas. This would over time facilitate the creation
of a pipeline of skills. The flexibility of digital technologies could, in particular, help mitigate or bypass residual
infrastructure gaps.

D. The road ahead:

steps to take build a stronger supply of traditional work-floor
skills.

Finally, changes in the education system should

To reap the benefits of this new wave of digital
industrial innovations, Indonesia will need to put
in place some key enabling conditions.
The first priority should be to bolster investment
in infrastructure. This should focus on key critical
infrastructure areas such transportation, energy, health
care and communications. It should aim at strengthening
traditional infrastructure while at the same time putting in
place the conditions for new generation digital solutions.
The second priority should be to invest in skills
building, to create the right talent pipeline for
the future. This should start by considering a reform of
the education system to raise the bar on STEM education
(Science, Technology, Engineering and Mathematics). While
not all future workers need to be engineers or data scientists,
it is important for workers of all skill levels to acquire greater
familiarity with technology and digital innovations. In other
words, we should treat basic scientific literacy the same way
we have treated basic literacy in the pastsomething that
every individual should ideally acquire. It would be equally
important to develop a system of vocational education, to
be complemented by a stronger investment
in training and retraining programs by private
companies to (i) help build a bridge between
formal education and work; and (ii) provide
opportunities for continuous on-the-job
learning as technologies change. Legislative
measures to facilitate the broad adoption of
apprenticeship programs could also help.
In this regard, it is encouraging that Indonesias
government NAWACITAs program includes as
one of its priority a renewed focus on education
and training, which envisions that 40% of
teaching in higher education should focus
on science and 60% on applied knowledge,
and provides for greater support to state
universities and stronger financing for research
and technology development. These steps
would help Indonesia develop the pipeline of
talent needed to support the unfolding and
deployment of new technologies. Building
closer ties between the education system and
industry would further help Indonesia to build
the workforce of the future.

Third, Indonesia should take steps to further
improve the business environment. Indonesia
ranked 91st out of 190 countries in the 2016 World Banks
Ease of Doing Business report; it ranked a poor 151st
for the ease of starting a new business. If Indonesia is to
leverage the potential of digital industrial innovations to
give rise to a stronger and more diversified manufacturing
sector consisting of smaller, agile and technologically
advanced firms, it needs to drastically improve the
conditions for new firms to get started.
Collaboration of public and private sector
will be crucial to the success of this strategy.
Private sector companies, including MNCs, have better
visibility over the rapid changes in technology, the
demand for new skills, and the conditions needed to
guarantee competitiveness and success. The government
is in the best position to put in place some of the key
conditions for success, from education to infrastructure.
Both have a common interest in Indonesias continued
economic success.
Future of Work in Indonesia 17
A number of new projects about to be launched could
help bootstrap Indonesias adoption of new digital-
industrial technologies:
HARA a smart farming platform from Dattabot,
leverage digital technologies to ensure consistent crop
productivity in a partnership between smallholder
farmers and agricultural companies. Combining big
data technology, digital sensors, data analytics and
predictive agriculture inputs, HARA provides value-
added insights related to farming field potential,
management of farm inputs and anticipation of
pest and disease. Such digital solution will play a big
part in Indonesias agricultural sector by increasing
the predictability of crop farming, allowing win-win
situations between the smallholder farmers and
agricultural companies, which in turn increases
farmers standard of living.
PT Kereta Api Indonesia (PT KAI), Indonesia state owned
railway company and GE are exploring and assessing
opportunities to deploy GEs Digital solutions for
Railway sector , which include: Rail Integrity Monitor
(RIM), Power Advisor, Trip Optimizer (TO), and Movement
Planner (MP).
 18 Future of Work in Indonesia

Conclusion
New digital technologies are beginning to reshape industry just as
Indonesia is renewing investments to bolster critical infrastructure,
from power to transportation to agriculture. Adoption of this new
generation of technologies can greatly enhance the efficiency of new
investments as well as raise the productivity of the already installed
base. Together with a renewed focus on education and training
to build the workforce of the future, rapid adoption of new digital
industrial technologies holds the potential to shape Indonesias
Future of Work, paving the way for stronger sustained economic
growth in the decades ahead.