Research: Generative AI Contributes IDR 3,700 Trillion to Indonesian Economy

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The utilization of generative artificial intelligence (generative AI) to enhance work activities has the potential to drive the economy. 

A study conducted by ELSAM in collaboration with Access Partnership reveals that generative AI can help unlock production capacity worth US$ 243.5 billion or around IDR 3,700 trillion across the entire economy, equivalent to 18% of the 2022 GDP.

Access Partnership Director Marcus Ng stated that the manufacturing and construction industries are the largest contributors to this potential. This is due to these industries comprising a significant portion of the workforce and contributing high labor productivity.

"Work activities conducted by workers in the agricultural, wholesale, and retail sectors constitute the largest portion of work activities that could be transformed by generative AI," he mentioned during the online launch of the report on the Economic Impact of Generative Artificial Intelligence (AI): Future of Jobs in Indonesia, on Friday (25/8).

The Potential Production Unlocked by Generative AI:

  • 34% manufacturing: US$ 81.9 billion
  • 16% construction: US$ 39 billion
  • 12% wholesale and retail trade: US$ 28.1 billion
  • 7% transportation services: US$ 18.2 billion
  • 6% agriculture, hunting, forestry, and fishing: US$ 13.4 billion
  • 26% others: US$ 62.9 billion

The utilization of generative AI in the agricultural, hunting, forestry, and fishing industries, for example, involves managing and arranging trade contracts to marketing materials.

Although these industries might not have the highest potential compared to others, these types of jobs constitute a significant portion of the local workforce and a substantial part of the Indonesian economy.

Therefore, harnessing the benefits of generative AI in these sectors can transform the work experience for a large number of workers in Indonesia.

Marcus explained that the implementation of generative AI will alter how labor is utilized in the production process, which will impact the workforce across industries.

"It's not about completely replacing jobs, but there is a possibility that the application of generative AI will shift the focus in certain job aspects," he said.

Based on local workforce analysis, the extent to which generative AI can be employed will vary based on the nature of specific jobs.

The report suggests that nearly every worker can use generative AI to some degree, with adoption rates varying according to the nature of the job.

However, around 52% of the workforce can use generative AI in 5-20% of work activities, and it's estimated that only 1% of the workforce in Indonesia can use generative AI in over 20% of work activities.

Furthermore, Marcus stated that to harness the potential economic opportunities of generative AI, it's important to identify existing workforce skills that need enhancement and a set of new skills that need to be developed.

Enhancing existing skills includes:

Basic skills like reading, writing, and critical thinking relevant to most jobs.

"Critical thinking skills, especially in the context of generative AI, which is still susceptible to data errors and ethics, remain a crucial part of the input and output equation," the report stated.

Function-specific cross-functional skills for specific job types, including:

  • Coordination
  • Complex Problem Solving
  • Technology Design
  • Programming
  • Operations Monitoring
  • Operations and Control
  • Quality Control Analysis
  • Systems Analysis
  • Systems Evaluation
  • Time Management
  • Material Resource Management
  • Financial Resource Management
  • Developing new skills ready for the future includes:

Skills ready for the future in the context of AI can be considered as consisting of three types:

  • skills to develop and manage AI
  • skills to work with AI
  • skills to live with AI

Specific skills required encompass a range of fields such as computer science and data analytics for more specialized AI roles. Additionally, softer skills like creativity, critical thinking, and problem-solving are becoming increasingly important with easier access to AI technology.

"To ensure that the economic opportunities from the application of generative AI can deliver broad benefits, society needs to achieve a minimum level of digital literacy," he emphasized.

A McKinsey report suggests that automation and AI are expected to create up to 46 million new jobs in Indonesia by 2030.

To enhance digital readiness, the Indonesian government aims to have 9 million highly skilled digital talents by 2030.

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