The world has entered the fourth industrial revolution, known as Industry 4.0, which further intensifies the role of automation, machines and the Internet of Things. Indonesia is among the countries that have moved to embrace Industry 4.0. In this case, the role of the private sector is crucial. Businesses need to innovate and embrace new technologies to survive.
General Electric is a big player in the world of industry and infrastructure. In Indonesia, the company is famous for its advanced power plants, locomotives, medical devices, and so on. Led by Handry Satriago, the company strives to push national development by innovation and developing future leaders. The CEO talked to AmCham Indonesia about the contribution of GE to Indonesia, the Industry 4.0 roadmap initiative and future implications for the nation.
AmCham Indonesia: What is GE's core business in Indonesia, and how does it view the Indonesian market?
Handry Satriago: We have been in Indonesia for more than 70 years. Mostly our business here is in the field of infrastructure, airplane engine manufacturing, medical equipment, power plants, locomotives and so on. The majority of airplanes in Indonesia are equipped and powered with GE engines. Almost all locomotives on Java Island were produced by GE. Also, about 25-30 percent of the power plants in Indonesia were manufactured, operated and monitored by GE. Our first hydro turbine in Indonesia has been here since 1922, and it still functions well today. We employ around 1,000 Indonesians and have invested more than $1.2 billion in the country. Indonesia is included in the top 20 most important markets for GE. Bottom line, we are very committed to Indonesia, it's a good business and a good market.
The challenge for my job is that we want to do something bigger for Indonesia. My job here is like two sides of a coin. On one side, my job is to promote GE to Indonesia. It is my job to make sure that GE is competitive and demanded in the Indonesian market. On the other side, my job is also to promote Indonesia, as a market, to GE so that the corporate headquarters can take Indonesia more seriously and more investment will be poured in. We also want to develop future leaders, and I am proud to say that some GE alumni have become CEOs. This has always been our mission.
What projects has GE done in collaboration with the government?
We do have some projects with the government. Our advanced power plants were installed in some areas in Indonesia, with the initiative of the president to provide electricity to rural areas. We have the technology, we have the efficient installation service and sometimes we also do the financing. A recent big project was the installment of 500 MW mobile power plants, using GE's TM2500 technology and financing from Hungary and Canada, ECA [export credit agency] financing facilitated by GE. These eight power plants provide the much-needed electricity to power four million Indonesian homes with 50 percent fewer emissions, and create jobs for 2,300 Indonesians on the ground. All eight power plants were inaugurated by President Joko Widodo on March 18, 2017. Bottom line, we are committed to Indonesia.
The government has five prioritized sectors in the "Making Indonesia 4.0" roadmap. Do you think it is on the right path to start the 4.0 program?
Yes, the government is already on the right path. The government has the roadmap already. The most important thing now is the execution. It needs to orchestrate all stakeholders to support this program. This is important because the world is going digital and we are experiencing consumer digital already. Everyone is connected through their phones now, and they can shop and order online. This kind of business already creates billions of dollars. And now the world is entering industrial digitization, where 50 billion machines are connected - machine talks to machine, and machine talks to human. This will revolutionize a lot of things. In that context, Indonesia has taken a good first step. The key challenge now is to prepare the human resources.
GE really welcomes this good initiative, although the infrastructure industry is not included in the five priorities of the roadmap. We are not food, automotive, textiles, chemicals, or electronics manufacturers. But those industries need the equipment that we produce, like power plants and 3D printers. Thus in this case, we can also participate in supporting the roadmap.
Do you think that digital transformation in infrastructure and construction is harder than in other sectors?
Digital transformation in the infrastructure sector is obviously ongoing, but I think the reason why it is lagging behind other sectors is because digital transformation in other sectors started earlier. An example is in retail and consumer goods. E-commerce is popular nowadays, and it started more than 10 years ago. Other sectors have a head start, but this does not mean that digital transformation in the infrastructure sector is not going on. Automation in machines is progress. Now we can talk to our power plants. We have a power plant in Bangalore that can conduct self-diagnosis and self-analytics to detect malfunctions or errors, find the main problem, and come up with solutions and preventive actions. Get inside, get connected, and get optimized are basically what's happening in the digital transformation of the industry.
Regarding the problem of human resources, what do you think is a good step for the government to prepare Indonesian workers for Industry 4.0?
I believe that in preparing human resources, the government needs to prepare more STEM [science, technology, engineering, or mathematics] workers through education, training and other programs. There should be a good synergy between the related ministries, research agencies, universities, and various industries in providing a great environment for the STEM field. I believe that Airlangga Hartanto and the Ministry of Industry have done a great job to orchestrate this collaboration.
How do you see the impact of Industry 4.0 towards the workforce and labor? How will GE deal with the issue of skill shortages?
Every industrial revolution always has an impact on labor reduction. It always happens. When the spinning wheel was invented, many people lost their jobs. Repetitive jobs will soon be gone, because machinery can do better. But, on the other hand, machines cannot work by themselves. New jobs will emerge. Jobs that need a high level of creativity, entrepreneurship, and networking skills; things that only humans can do. Now there are a lot of start-ups utilizing the Internet of Things (IoT) and artificial intelligence (AI). These are examples of the emergence of new jobs. Traditional accountants, for example, will be eliminated by automation. There will be a new definition of accounting as a job.
GE employees do not have any special training or what not. We just tell them that now we do things differently. We emphasize the fact that we are a digital industrial company. We don't have enough time to change the whole management and make new structures or something. The employees are just being infused by the fact that we are digital now. Everyone, with their own share and capacity, will understand what digital really means in this company.
