Authors: Tuhu Nugraha and Oke Hastiawan*

A Nation on the Cusp of Transformation

Imagine an industry bustling with workers, each contributing to the economic growth of their community. Suddenly, Artificial Intelligence (AI) is introduced, transforming the landscape. Some jobs are replaced, others evolve, and new opportunities arise. This is the reality that many Indonesian industries are facing today. The journey towards adopting AI is filled with promise, yet also comes with significant challenges. As a developing country, how can Indonesia turn these challenges into a model for others to follow?

Recent headlines underscore the rapid shift towards AI in the workplace. For instance, ByteDance-owned TikTok recently slashed hundreds of jobs as it moved towards AI-driven content moderation, showcasing the transformative impact of AI on industries and the pressing need for effective change management. Reports from key institutions further highlight the urgency of change. The World Economic Forum’s “Future of Jobs Report 2023” predicts that 23% of jobs globally will be affected by AI within the next five years. This includes Indonesia, though the exact impact may vary. A McKinsey study indicates that automation could impact between 400 and 800 million jobs globally by 2030, with developing countries like Indonesia, which have large manufacturing bases, facing significant effects. Additionally, CNBC Indonesia, citing the WEF report, mentions that millions of jobs in Indonesia are at risk of being replaced by robots and AI.

These predictions frame a powerful story of transformation, especially for countries like Indonesia that are on the cusp of an AI revolution. For developing nations, AI adoption presents a unique opportunity to boost economic growth, improve efficiency, and enhance customer experiences. However, effective change management is key to navigating the inevitable hurdles that accompany this journey.

The Promise and Challenges of AI Adoption in Indonesia

Across Indonesia, companies are increasingly exploring ways to enhance their operations and improve customer experiences. AI offers unique opportunities to optimize operations, enhance customer service, and drive innovation. However, Indonesia’s journey towards AI adoption is not without challenges. The country’s limited resources and infrastructure pose barriers, and the success of AI hinges on the ability to prepare both people and systems for transformation.

Moreover, the integration of AI aligns with the global narrative of sustainability and Environmental, Social, and Governance (ESG) practices. AI can contribute to more efficient resource management, reduce waste, and enhance decision-making processes that prioritize sustainability. For businesses in Indonesia, aligning AI adoption with ESG expectations helps meet the demands of all stakeholders, from customers to investors, and supports broader global sustainability goals.

Navigating AI Adoption: A Model for Change Management

The key to successful AI adoption lies in effective change management—aligning people, processes, and technology to embrace transformation.

Assessing Readiness and Developing Strategy

Before embarking on the AI journey, companies in Indonesia must assess their readiness by identifying areas where AI could have the most impact, understanding the workforce’s skills, and evaluating infrastructure availability. This careful evaluation helps lay a solid foundation for AI integration. A well-defined strategy is crucial, aligning AI goals with broader business objectives while considering local challenges, such as funding constraints and limited technology access.

Communicating the Vision

Building enthusiasm and support among stakeholders is essential. In Indonesia, this involves addressing fears around job loss and emphasizing the opportunities AI can create. Clear communication ensures that employees, customers, and partners understand how AI fits into a shared vision for growth and how it will ultimately benefit them. It is also important to highlight how AI adoption supports sustainability and ESG efforts, creating a positive impact not only for the company but also for the community and environment.

Providing Training and Support

One of the biggest challenges in Indonesia is the skill gap. Companies must invest in equipping employees with the necessary skills through training programs. Partnerships with educational institutions and government initiatives are critical in bridging this gap. Upskilling employees fosters a culture of growth and innovation, empowering the workforce to embrace AI technologies and contribute to sustainable business practices.

Monitoring Progress and Overcoming Challenges

Continuous monitoring helps refine AI strategies, ensuring that goals are met and adjustments are made as needed. This is especially important in Indonesia, where resource constraints can affect the pace of adoption. Indonesia’s journey also faces challenges like resistance to change, balancing automation with employment, and managing data security and legacy systems. Shifting the narrative to view AI as an enabler of opportunities is key to overcoming resistance, while also aligning these efforts with ESG objectives to ensure that AI adoption benefits society at large.

Ethical and Regulatory Considerations

In Indonesia, ethical AI use is critical. Circular Letter SE No. 5 of 2024 from the Ministry of Communication and Information Technology (Kemenkominfo) encourages collaboration between humans and AI, emphasizing that AI should assist rather than replace human workers. The government is also promoting skill enhancement and the creation of new job opportunities in AI-related fields to ensure that AI adoption is both responsible and inclusive. These efforts align with the broader global push for sustainability and responsible technology use, ensuring that AI contributes to long-term positive outcomes for both businesses and communities.

Strategic Solutions for Workforce Readiness

Indonesia’s experience offers valuable lessons for other developing countries. Corporate training programs, government initiatives, and collaboration with educational institutions are key strategies to prepare the workforce for AI. Public-private partnerships have been crucial in building scalable training programs, while lifelong learning initiatives help workers stay updated with technological advancements. The government and industry also focus on creating new roles in AI development, data management, and AI ethics to drive economic growth and offset job displacement. These efforts address workforce readiness and ensure that AI adoption contributes to sustainable development and aligns with ESG goals.

Conclusion: A Model for Developing Countries

The story of AI adoption in Indonesia is one of opportunity, challenge, and resilience. As a developing country, Indonesia’s journey provides a model for others to follow. AI adoption offers significant opportunities to drive efficiency and innovation, but success hinges on effective change management. By assessing readiness, developing a clear strategy, communicating the vision, providing training, and monitoring progress, companies can navigate the challenges of AI adoption. Indonesia’s approach offers valuable insights into thriving in an AI-driven world while ensuring that people remain at the heart of technological progress. Moreover, aligning AI initiatives with sustainability and ESG expectations ensures that the benefits of AI are maximized for both businesses and the wider society, contributing to a sustainable future.

*Oke Hastiawan is a seasoned Human Resources professional with over 15 years of diverse experience across corporate and consultancy roles. With a solid HR Consulting, Sales, and Relationship Management foundation, Oke has a proven track record of aligning people strategies with business objectives. Holding an MBA, he is passionate about driving value-added contributions that enhance business performance while fostering meaningful impact on individuals and teams. Oke’s expertise bridges the gap between business strategy and human capital, making him a dynamic contributor in today’s evolving global landscape.