Feb 19, 2017

The Fourth Industrial Revolution

“To what degree is the Fourth Industrial Revolution an opportunity or a threat for the ASEAN region?”

Just a couple of months ago, news broke from a startup world in Indonesia: a fashion e-Commerce startup laid off hundreds of their employees (all of them are from the customer service division). Some speculations of why the decisions being made arose, but then the CEO made a firm statement, “while we are growing rapidly at 25 per cent per month in the past eighteen months, we are focusing on building a sustainable and profitable business. As part of that effort, we need to make this difficult decision in order to cut salary spending by 13 per cent”1.

A few months after, another news update came from another Indonesian tech startup—an SMS-based virtual personal assistant service. The article mentioned something related to (and actually also stated explicitly about) the former case. Apparently the latter tech startup also happened to lay off 35 people of their employees, again from the customer service division, in order to—quoting the article—reduce the need for real human involvement in repetitive tasks (as you may guess, of customer services) to a minimum2, neglecting the fact that that was the same staff who had helped developing the technology in the first place (by collecting the data from the interactions with the customers). 

At that point, frankly, I could not help but think of all these new technologies and, by extension, the fourth industrial revolution as more of a threat. Its advancement is so rapid, not only humans can hardly catch up, the cost which it requires is relatively far lower. And specifically in ASEAN region, where most of the countries (including Indonesia) have been the destination for companies from developed countries to offshore their labor productions/operations, the increasing use of nonhuman resources has eaten into the low-cost labor advantage that developing countries have held—leaving the developing countries at risk of big wave of unemployment in the (near) future.

But to put the meaning whether something is a threat or an opportunity, I think, is really up to us. And with some evidences which have shown the potential threat of the fourth industrial revolution, (and the fact that there’s no way to avoid the coming of this fourth industrial revolution) we actually have no choice but to better prepare ourselves. And that being said, I (and, I believe, everyone should too) choose to focus on the perspective which holds it as the opportunity instead.

Just a few weeks ago, I facilitated a five week-long course on the topic of ‘Women in Leadership’ in Jakarta. And one of the biggest takeaways that I got on how to help working mothers to advance their career is to provide them with flexibilities; time and/or place. And within the discussion I had both on and off the stage, the mention of the involvement of technology did not occur just once. It was mentioned many times that new technologies—especially Information and Communication Technologies (ICT)—have a vast contribution for empowerment, certainly including women empowerment. In other words, this fourth industrial revolution is, in fact, a powerful enabler for women to juggle their commitments, both at work and at home. (And we all know well, that more women in the workforce means better business. Diversity always matters.)

And on the other hand, I can also very much speak about this from my own experience running Wangsa Jelita. Wangsa Jelita is a social enterprise that offers the true natural personal care products, while at the same time support local communities. We conduct fair trade practices with local communities whose crops/skills/crafts can be incorporated in our business lines. Right now we have partnered with hundreds of people from five different groups of communities (from farmers to masseuses) that live in many parts of the country. And one of the key successes of our scalability, I will argue, is due to the involvement of technology. One example that I would like to mention is our recent collaboration with Go-Massage—an expansion of a local tech startup named Go-Jek—which provides the best on-demand professional massage for urban families. Through this collaboration, the masseuses gain more income and better livelihood.

So back to the question, “to what degree is the Fourth Industrial Revolution an opportunity or a threat for the ASEAN region?” I believe the answer goes back to us. If we see the revolution as a means to make a positive impact and to improve the state of the world, then no doubt a great opportunity awaits. Furthermore, we have to acknowledge that this also means, by extension, we have to put people first above all else—to put people in the center of our decision, our plans, and our definition of success.

And lastly, I am very much convinced that this doubled-edged sword of the fourth industrial revolution should be embraced not just by businesses per se, but by each and every one of us, including governments and individuals. Because only then we can together set our priorities straight and remind each other, not to confuse the goals with the means.