The Future Potential Opened by AI

Artificial intelligence or artificial intelligence promises great potential in the future, although there are still threats.

The following article was translated using both Microsoft Azure Open AI and Google Translation AI.

JAKARTA, KOMPAS - The results of the analysis of Kompas' Daily Data Journalism Team found that the economic value generated by the application of artificial intelligence or AI (artificial intelligence) in Indonesia can reach IDR 5,299 trillion. This figure is the result of increasing the productivity of each industrial field in Indonesia which is made possible by implementing AI.

Analysis using the OpenAI research basis, an artificial intelligence company that created ChatGPT published in March 2023.

The research entitled "An Early Look at the Labor Market Impact Potential of Large Language Models" analyzes thousands of job types and details the activities of each job in 92 sub-sectors of the United States (US) industry. Each activity is then assessed whether it can be done by AI or not.

The AI referred to is an AI application based on LLM such as ChatGPT combined with image generation automation like Midjourney as well as computer vision to view an image and provide descriptions of the image. From each evaluation of the work, the level of exposure of each industry sector to AI can be found. The level of exposure is the extent to which AI can assist in the job's details.

KOMPAS/PRIYOMBODO

The busy activity of the call center service of e-commerce website Jd.id during the implementation of National Online Shopping Day or Harbolnas 2018 in Kuningan area, Jakarta, on Wednesday (12/12/2018). This biggest online shopping festival in Indonesia targets a transaction of Rp. 7 trillion.

The results of exposure in each industry in the US were then applied to the industrial sector in Indonesia. Assuming that the industrial sector or business field in Indonesia also has a number of job types that are similar to the industrial sector in the US.

The exposure figures from 92 industrial subsectors in the US were then adjusted to fit the 17 business fields in Indonesia used by the Central Statistics Agency (BPS). The AI exposure figures were then combined with the gross domestic product in each business field.

The economic value generated from the implementation of artificial intelligence or AI in Indonesia can reach IDR 5.299 trillion. This figure is the result of increased productivity in each industry sector in Indonesia that is possible by applying AI.

Three business sectors with the highest AI exposure are information and communication (58 percent), financial and insurance services (55.2 percent), and corporate services (52.3 percent). Meanwhile, the agriculture sector has the lowest exposure, with only 1.34 percent.

KRISTI DWI UTAMI

The price of jasmine that is exported from Tegal Regency, Central Java ranges from Rp 20,000 to Rp 150,000 per kilogram. It depends on the condition of the flowers when received in the destination country for export. Jasmine that arrives in the export destination country while still in bud form is purchased at a high price.

By calculating the exposure level of each business field, it can be estimated that 22 percent of the total workforce in Indonesia, or around 26.7 million people, could be assisted by AI. About 26.7 million Indonesian workers could have their jobs redefined if their business fields implement AI.

The redefinition of work by AI does not necessarily replace humans with computers, but the job description changes due to the fact that there are several types of work that can be done more efficiently by AI.

Also read: How Much Is Your Work Exposed to Artificial Intelligence

The level of exposure of Indonesian workers is lower compared to the AI exposure rate in the United States, which reached 38.8 percent, when analyzing further the research conducted by OpenAI.

The results of Kompas's analysis are not much different from research by investment bank Goldman Sachs which was released in March 2023. According to Goldman Sachs, the exposure of the Indonesian workforce to AI is around 16 percent.

Using micro data from the National Labor Force Survey by the Central Statistics Agency (BPS) in 2021, Kompas analysis also estimates the duration of working hours that can be saved through the use of AI. On average, the implementation of AI in Indonesia can save working time for about 116 minutes or almost 2 working hours per day. The lowest efficiency due to AI is in the agricultural sector, which is only around 4.8 minutes per day, while in the information and communication sector, working hours can be saved for 3 hours and 14 minutes per day.

M PUTERI ROSALINA

The presentation was delivered by the Deputy of Digital Economic Coordination, Labor, and SMEs of the Coordinating Ministry for Economic Affairs, Rudy Salahuddin, at the WorldAI Show event on Wednesday (7/6/2023) morning in Jakarta.

Kompas's calculation results regarding the economic value of implementing AI in Indonesia, which reaches IDR 5,299 trillion, are not much different from the calculations of consulting firm Kearney. According to Kearney, the potential for Indonesia's economy to increase if AI is implemented in all business fields reaches US$366 billion or Rp.5,371 trillion. Kearney's analysis was quoted by the Coordinating Ministry for the Economy regarding the potential of artificial intelligence in spurring digital economic growth in Indonesia.

The Deputy of Digital Economy, Employment, and Small Medium Enterprises Coordination in the Coordinating Ministry for Economic Affairs, Rudy Salahuddin, stated that the government has already anticipated the impact of AI through the development of the Indonesian National Artificial Intelligence Strategy (Stranas KA) in 2020. This document is expected to develop regulations and also assist in the preparation of AI talents in the future.

One manifestation of the National Strategic Plan for AI (Stranas KA) is the formation of the Industry Collaboration for Research and Innovation on Artificial Intelligence (Korika). Korika Chairman Prof Hammam Riza stated that one of Korika's main focuses is the development of government regulations and policies related to AI. He added that these two aspects are crucial in developing Indonesia's talents and protecting its workforce during these critical times.

Through the formulation of regulations and policies, it is expected that the government can utilize AI technology in the demographic bonus that Indonesia is currently experiencing. "This is very important, so that our workers who should fill this demographic bonus are given the widest possible opportunity to adapt to the use of AI in the industry's operations," said Hammam.

KOMPAS/ALBERTUS KRISNA

Chairman of the Industry and Innovation Collaboration of Artificial Intelligence or Korika, Prof. dr. Hammam Riza, MS., Sc.D, was interviewed by Harian Kompas in Jakarta on Monday (12/06/2023).

With the presence of AI, the Director General of Higher Education of the Ministry of Education, Culture, Research, and Technology, Prof Nizam, believes that indeed there will be millions of jobs that will be lost and replaced by automation. However, he believes that new jobs created by AI will also be much more numerous.

"There is a prediction that says a new profession that emerges can replace the lost jobs double in number. However, the creation of new jobs has not happened yet. This means there is an opportunity for Indonesian children to develop something new that is currently unimaginable," said Nizam.

Productivity increases

Head of the Center of Digital Economy and SMEs Institute for Development of Economics and Finance (INDEF) Eisha Rachbini said that to measure the productivity of a job due to the application of AI, seen from the amount of input and output. If the resulting output is greater than the input, it means productivity and speed increase.

"If you use machine learning, in terms of time, it will definitely give you faster productivity, because with a little input assisted by machines, we can get bigger output," said Eisha.

From the industry perspective, Executive Director of the Indonesian General Insurance Association, Bern Dwyanto, mentioned that artificial intelligence has been used in the insurance industry to assist business processes in becoming more effective and reducing manipulation in insurance claims.

"AI has been used for scanning faces and medical records in health insurance, insurance underwriting processes, to reduce fraud in vehicle insurance," explained Bern.

The Chief Technology Officer (CTO) of venture capital firm GDP Venture, On Lee, confirmed that efficiency is one of the main attractions for implementation in the business world.

Lee exemplifies the efficiency that AI can offer in analyzing large amounts of data. Dozens of data lines can be analyzed quickly by AI, something that would take a long time if done by humans.

"For certain things, AI allows us to obtain faster (more quickly) output, as well as higher quality (better quality)," said Lee.

KOMPAS/ALBERTUS KRISNA

The chief technology officer (CTO) of venture capital firm GDP Venture, On Lee, was interviewed by Harian Kompas in Jakarta on Wednesday (14/06/2023).

However, according to artificial intelligence researcher Wahyu Adi Setyanto, the implementation of artificial intelligence in an industry depends on the cost incurred by the industry owner. The cost is higher for subscribing to AI applications or paying for labor.

Wahyu provided an example of an industry that utilizes AI and reduces human labor. However, sometimes the machine's output does not meet expectations, so it must be given commands again or the task must be handed back to human labor.

"This means that the implementation of AI in the industry becomes inefficient in terms of cost and time," said Wahyu.