Expectation Measurement of Industry 4.0 Technology in the Indonesian Manufacturing Industry

Abstract

Implementation of Industry 4.0 technology in the Indonesian manufacturing industry is considered one of the Indonesian Government's steps in its commitment to revitalize the Indonesian Manufacturing Industry. It is expected that Indonesia will become global top 10 of the economy by 2030, regain the industry net export contribution to ten percent, increase labour productivity by two times the increase in labour costs, and allocate 2 percent of GDP for R&D activities by industry 4.0 adoption. However, from the Indonesia Industry 4.0 readiness assessment, Indonesia manufacturing industry is still in the medium readiness stage. Despite the many benefits promised by Industry 4.0, there are still obstacles in industry 4.0 implementation. Unclear cost-benefit and high value for investment for the industry 4.0 implementation is cited as one of the obstacles to applying industrial technology 4.0. However, there is inadequacy in a study that examines how manufacturing industry perceipt the benefits and potentials of industrial technology 4.0, especially in developing countries. Therefore, this study aims to study industry 4.0 key technologies in Indonesia's industry 4.0 road map are associated with the expected benefits. Surveys are carried out to the Indonesian Manufacturing Industry regarding their adoption in industry 4.0 technology and expected benefit. Using regression analysis, we show that some technologies associated with some benefits. Result from this study show that technology artificial intelligence is associated with benefit reduction of operational cost and benefit increase energy efficiency, while Advanced robotics associate with benefit Reduce product launch time. This study will also give input to the Government as a guidance on what technology is still needed to be strengthen for the manufacturing industry to increase their competitiveness.