Antara News·Indonesia·Tuesday, October 6, 2026 at 11:12 AM UTC

Indonesia leverages AI in downstreaming to target 8 percent growth

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Arnidhya Nur Zhafira, Yashinta Difa

Jakarta (ANTARA) - Indonesia must integrate artificial intelligence (AI) and advanced technologies into downstream processing and manufacturing to improve efficiency and productivity and achieve its target of 8 percent economic growth, Coordinating Minister for Economic Affairs Airlangga Hartarto said.

“Moving forward, downstreaming must be increasingly technology-based by leveraging AI,” Airlangga said here on Tuesday.

He cited nickel producer PT Vale Indonesia as an example of successful AI implementation in environments that are unsafe for human workers.

The adoption of AI raised the company’s compliance rate from 89 percent to 95 percent while increasing annual nickel output by 182 tons.

“This is something only AI could achieve,” Airlangga said, adding that broader manufacturing industries are similarly benefiting from machine-to-machine learning, the Internet of Things (IoT), and Industry 4.0 automation.

Beyond industrial efficiency, the minister underscored that AI will drive demand for data center infrastructure, where Indonesia has a competitive edge due to its abundant land, energy, and water resources, as well as its large domestic market.

The push aligns with regional digital initiatives, particularly under the ASEAN Digital Economy Framework Agreement (DEFA), which is projected to double the regional digital economy from US$1 trillion to US$2 trillion.

As ASEAN’s largest economy, accounting for roughly 40 percent of the region’s total GDP, Indonesia stands to gain significantly from this expansion.

To support the transition, the government is strengthening vocational programs and private-sector partnerships to develop local talent in AI and semiconductors.

Airlangga described the technological shift as the next phase of Indonesia’s structural economic transformation, moving the country’s main sources of value from agriculture to heavy manufacturing and ultimately toward high-value digital services.

Strengthening downstreaming, industrialization, green energy, and digitalization is key to boosting national productivity and competitiveness, the minister said, calling on the private sector to partner with the government to capitalize on these emerging industries.

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