Understanding the Systemic Relationship of Industry 4.0 Adoption in the Indonesian Food and Beverage Industry

Abstract

Food and beverage industry in Indonesia has shown significant growth of 8% each year-consistently from 2015 till 2018-and contributing the largest portion to sectoral GDP for manufacturing by 34,33% in 2018. With this growth, Indonesia's government has put this industry as one of the priority sectors to adopt industry 4.0 technology under a national policy roadmap: Making Indonesia 4.0. The adoption is expected to increase production capacity that yields the increase of production value, helping the nation to actualize its economy objective. This paper aims to conceptualize a systemic relationship structure that could highlight the interactions between policies and key variables of technology 4.0 adoption in the food and beverage industry in Indonesia. The result shows the hypothesis that economic profitability has an active role in increasing number of industry 4.0 adopters in this industry.