Industries Plan Growth Strategies in Preparation for Post-COVID Effects

JAKARTA - The COVID-19 pandemic has affected people's livelihoods, in terms of income and daily activities, as well as disrupting the economy and environmental sustainability efforts. It has also forced the government to shift their economic transformation plans, adopting new strategies that would be able to push and stabilize the economy following the dire conditions brought on by the COVID-19 pandemic.

Future economic transformation strategies for Indonesia must focus on reducing dependence on natural resources, improving the competitiveness of industries, and developing modern services that have high added value. These points were discussed as part of the Indonesia Development Forum's Inspiring Session Road to Indonesia Development Forum 2021 webinar, under the "Industrialization Strategies to Drive Economic Transformation" sub-theme, which discusses possible strategies to bolster leading economic sectors such as pharmaceutical, textiles and telecommunications.

According to Prof. Edward Buckingham of Monash University, entrepreneurship and developing business creativity is key to addressing the challenges the world currently faces.

"COVID is accelerating the informal sector's digitalization process. We can see that various digital entities and groups have entered the sector. From here, we must be able to predict future transaction costs and what their impact will be. Other than that, we must dare to look to foreign experts for help in order to bolster talent quality in both the formal and informal sectors," Prof. Edward said during the Inspiring Session Road to Indonesia Development Forum 2021 webinar on Tuesday (29/6).

PT Lucas Djaja Kimia Farma president director Rizal Ginanjar added that the pharmaceutical industry experienced growth in 2020 in the midst of the pandemic, managing to grow by 7%. Other than the pandemic, there are six other factors that have majorly affected the industry, with technology being the first major driver, since technology continues to develop despite the spread of disease.

The second factor revolves around shifting disease patterns, which shows that non-contagious diseases are becoming more prevalent than contagious diseases. The third factor is the shifting of raw pharmaceutical product materials, while the fourth involves all the revolutions that took place in the medical world during this period.

The fifth factor is the 4P principles adopted by the public today, which involves personalized, predictive, preventive and participatory medicine, while the sixth concerns regulations.

"Raw pharmaceutical materials are currently being fought over by many others in the world, and are usually held by a certain cadre of countries, therefore highlighting our need to reduce dependency on importing them," Rizal said.  

Meanwhile in the textiles and textile products industry (TPT), progress is also being made, with positive performances and adjustment to 4.0 technology in their production processes being key factors in their growth as a leading economic sector. The entire textile industry itself is made up of 5,823 large-scale industries and 909,822 micro-to-small industries, employing a total of 3.96 million workers, making it a labor-intensive sector.

The industry's 59.94% utilization rate is still dependent on imports, however, with US$7.2 billion in imports.

"To be truly competitive globally, we cannot hope for safeguards from the governments. We must therefore focus on providing added value to our industry. Our costs-per-unit rate must be competitive. That is why productivity and technology must be improved upon because other countries will do the same thing. Doing so will push us to keep benchmarking," PT Pan Brothers CEO Anne Patricia Sutanto said.  

Over in the telecommunications industry, performance has been positive as well. The industry contributed 4.51% to the country's gross domestic product (GDP) in 2020 and is the 6th largest contributor to the GDP with Rp 726 trillion.

"Even if we only contributed 4.51%, the telecommunications industry has proven itself to be an enabler of other sectors," said PT Telkom Indonesia vice president of group digital strategy Riza Agung Nugraha Rukmana.

"We have identified several sectors that have the potential to be digitalized, such as the agriculture sector, where we could provide greater market access to up to 40 million farmers through e-commerce platforms and also better access to funding and others. It's the same with the logistics sector, which can be supported by factors such as big data, cloud, AI, and IoT among others," he explained.