This has also been a reason for the decline in the manufacturing industry in many countries, including Indonesia.
"Almost all countries have experienced a decline in the manufacturing industry because the service industry is developed very rapidly in this digital era," Indrawati said at the 14th Kompas100 CEO Forum in Jakarta on Wednesday.
The development of the service industry has been marked by the emergence of many services in various sectors that utilize digital technology to support productivity.
"This (digitalization) makes it seem as if the role of the service sector is taking over the manufacturing sector," she pointed out.
Furthermore, the minister said that digitalization has a role in creating jobs in the manufacturing industry.
For instance, many manufacturing companies are currently using robotic technologies instead of humans. Therefore, an improvement in the productivity of human resources is deemed necessary to attain the 2045 Golden Indonesia vision.
"The productivity factor is how each person, each worker is able to produce more output, whether from education, skills, production efficiency, or ability to create added value domestically," she explained.
She further said that her ministry will continue to provide fiscal incentives to support the productivity of the manufacturing and service industries.
Fiscal incentives can be provided in the form of incentives from the tax side, from the spending side, infrastructure, to improving bureaucracy.
"All (incentives) are from the spending side, from the below-the-line side, and we carry out state equity participation (PMN)," she said.
She added that her ministry is also providing capital support to state-owned enterprises that have a role in infrastructure and human resource development, among other things.
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Translator: Bayu Saputra, Raka Adji
Editor: Tia Mutiasari
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