Development of Industrial Zones: The Pillar of Digital Transformation Towards Industry 4.0

Jakarta, INTI – The Indonesian government began developing its first industrial zone through state-owned enterprises (BUMN) in 1970. This initiative aimed to control industrial growth and environmental pollution, address infrastructure limitations, and meet housing needs around industrial locations. In line with this development, the government subsequently issued Law Number 5 of 1984 concerning Industry, which designated industrial growth centers.

With increasing investment, the government allowed private parties to develop industrial zones through Presidential Decree Number 53 of 1989, resulting in the second-generation industrial zones.

Following the development of sectoral regulations governing regional autonomy and spatial planning in 2009, Government Regulation (PP) Number 24 of 2009 concerning Industrial Zones was issued. "This regulation requires industries to be located within an industrial zone to ensure investment certainty, accommodate environmental interests, address infrastructure needs, and simplify licensing, resulting in third-generation industrial zones to this day," said Minister of Industry Agus Gumiwang Kartasasmita in Jakarta on Monday (15/7).

As a country with significant industrial potential, Indonesia needs a regulatory framework that supports sustainable and competitive industrial growth. The issuance of PP Number 20 of 2024 concerning Industrial Zoning aims to integrate industrial resource management, industrial infrastructure development, spatial planning, and the supply chain linkage of small and medium industrial centers (IKM) within an industrial zoning framework. This regulation is expected to support and prepare Indonesia for the fourth industrial revolution (Industry 4.0), where technology and innovation are the main pillars in achieving efficiency, national industrial sustainability, and increasing the global competitiveness of the national industry.

The issuance of PP Number 20 of 2024 concerning Industrial Zoning also aims to integrate industrial resource management, industrial infrastructure development, spatial planning, and the supply chain linkage of small and medium industrial centers (IKM) within an industrial zoning framework.

This regulation is expected to support and prepare Indonesia for Industry 4.0, with technology and innovation as the main pillars in achieving efficiency, national industrial sustainability, and increasing the global competitiveness of the national industry. Through the implementation of PP 20, the government supports the realization of fourth-generation industrial zones that undergo digital transformation.

The development of industrial zoning is crucial in enhancing industrial growth in Indonesia. With clear and structured regulations, the government can ensure that industrial development is carried out efficiently and effectively, including the availability of adequate infrastructure both within and outside industrial zones. "This is expected to increase our overall industrial competitiveness, inclusivity, and sustainability, thus positively impacting the national economy and public welfare," concluded Agus Gumiwang Kartasasmita.

According to the latest data from the Central Statistics Agency (BPS), the manufacturing sector in Indonesia contributed around 20% to the gross domestic product (GDP) in 2023. Additionally, this sector also absorbed approximately 14% of the total national workforce. With the new regulations, it is expected that the industrial sector's contribution to the national economy will continue to increase.

In an effort to boost industrial growth, the government also provides various incentives for investors looking to develop industrial zones. These incentives include licensing ease, tax relief, and infrastructure support. The government also continuously evaluates and refines regulations to ensure that the policies implemented meet industry needs and technological advancements.

Furthermore, the government collaborates with various parties, both domestically and internationally, to develop environmentally friendly and sustainable industrial zones. One example is the collaboration with several advanced countries in terms of technology transfer and capacity building in the industrial sector.

With these strategic measures, it is hoped that Indonesia can become one of the countries with advanced and highly competitive industries in Southeast Asia. The transformation of the industry towards the digital era and the application of 4.0 technologies are expected to increase production efficiency, reduce operational costs, and create innovative products with high added value.

As part of this effort, the government also invites the entire community to participate and support industrial development in Indonesia. One way to support this effort is by attending and witnessing the Indonesia Technology and Innovation 2024 (INTI 2024) exhibition, which will be held at JI-EXPO from August 12-14, 2024. INTI is Indonesia's largest technology and innovation exhibition, showcasing the latest innovations from both domestic and international participants. More detailed information can be accessed through INTI Asia.