The era of smart automation has made its way into our daily lives, thanks to a multitude of technologies including Internet of Things (IoT), artificial intelligence (AI) and robotic process automations (RPA). Many essential services in modern cities are becoming automated and “smart”. For instance, smart streetlights have learnt to turn themselves on when the environment is dark, while building management systems can track the movement of people and divert power away from zones without any people in them.

Smart automation is also present in other areas - from energy distribution, trash collection, traffic management to parking systems. The combination of connected devices and data paired with a city’s physical infrastructure and services can simplify the lives of residents while reducing costs for the government.

According to McKinsey, smart solutions can remove up to 270,000 kilotons of annual greenhouse gas emissions, create almost 1.5 million new jobs and deliver US$16 billion worth of savings on the cost of living in Southeast Asia.

The progress of Industry 4.0 in Southeast Asia

Smart automation is not only improving essential services, it is also making waves in the manufacturing sector and supply chain. Smart technology can achieve productivity gains as much as US$627 billion a year in Southeast Asia. An Ernst & Young (EY) survey underpins the importance of emerging technology and automation. It found that by 2035, 45% of supply chains are predicted to be primarily autonomous, such as driverless forklifts and vehicles, robots in warehouses and stores, delivery drones, and wholly automated planning.

Many countries in ASEAN believe this is crucial to their future economic growth and have embarked on Industry 4.0 to evolve their manufacturing sectors.

Industry 4.0, also known as the Fourth Industrial Revolution, is the next phase in the digitisation of the manufacturing sector. Driven by disruptive trends, such as the rise of data and connectivity, analytics and smart automation, this wave of change holds significant potential for future of manufacturing.

In Indonesia, President Joko Widodo is confident that implementing Industry 4.0 will help the country become one of the top ten global economies and elevate its manufacturing sector to 26% of GDP by 2030. The government has implemented the Indonesia Industry 4.0 Readiness Index to measure how far industrial companies are prepared to digitize their production processes.

Vietnam is also determined to develop its manufacturing sector with Industry 4.0. Many large enterprises have invested in smart factories with production control systems, automatic line connection and seamless data transmissions. These are encouraging signs, as the Vietnamese government aims to grow its manufacturing sector to 30% of GDP in the coming years.