The increasing use of digital technology in major industries, especially manufacturing, is not accompanied by increasing manpower skills. Consequently, workers with redundant competencies will be subject to gradual staff reduction and enter the informal sector.
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KOMPAS/RADITYA HELABUMI
Employees work at a factory in Wadas village, Tegal district, Cirebon, West Java, on Wednesday (25/4/2018). Entering the era of Industry 4.0, improving workers’ capacity will increase industries’ productivity and competitiveness, especially in the manufacture sector.
JAKARTA, KOMPAS — The increasing use of digital technology in major industries, especially manufacturing, is not accompanied by increasing manpower skills. Consequently, workers with redundant competencies will be subject to gradual staff reduction and enter the informal sector.
The Indonesian Institute of Sciences (LIPI) has conducted qualitative research on employment opportunities and human resource development in the digital era. The research subjects in the 2018 case study are garment and textile businesses in Bandung as well as the industries of snacks and wooden crafts in Bantul, Yogyakarta.
LIPI population researcher Devi Asiati said on Friday (23/11/2018) said that companies often did not train their workers because of the high costs incurred. “Thus, workers’ professional opportunities get smaller, as not all of them can switch to using digital technology,” she said.
Based on data LIPI obtained from garment industry worker unions, companies’ labor demand is shrinking as digital technology is being implemented. For instance, because of automatization, companies that used to need 300 workers per shift now only need 150.
Manpower Ministry data show that 9,822 workers were laid off in 2017, including 5,107 in manufacturing and basic chemical industries and 1,082 in trade, services and investment.
The study also found common strategies for companies wishing to cut down staff. This includes transferring certain workers to divisions for which they have no skills, and without giving them any training. Consequently, the workers will feel stressed and chose to resign on their own.
These workers then switch to jobs in the informal sector, becoming, for example, street vendors or ojek (motorcycle taxi) drivers.
The head of the Manpower Ministry’s center for manpower planning, Agus Triyanto, said the government, through its vocational training centers (BLK), had reorientation, revitalization and rebranding programs to help workers develop skills that match industries’ current needs. The problem is that the regional BLK often have difficulties in adjusting to central government programs in the context of regional autonomy.
International Labour Organization (ILO) Jakarta national program officer Lusiani Julia said 56 percent of jobs were at a high risk of being made redundant by automatization. Low- and moderately-skilled Indonesian workers may become redundant in the so-called Industrial Revolution 4.0, as there is a high chance of computerization in a number of jobs.
“When companies decide to do the digital transformation, huge capital expenditure is expected. Access to and sufficiency of capital will not be a problem for big businesses. Small and medium enterprises, however, will face difficulties,” she said.
The ILO suggested that Indonesia improve the level of competence of its workers. A long-term strategy would be necessary, encompassing improvements in educational curricula, training schemes and internships.
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