The Role of SME’s Focused Tech Startup on Indonesian SME’s Adoption of Industry 4.0

ASEAN SME has a role as the regional socioeconomic stabilizer. This particular role is inseparable from endogenous multi-sector collaboration. Although, Indonesian SMEs were struggled in adopting Industry 4.0 correspond to digital infrastructure and digital literacy problems. This study evaluates Indonesian SME collaboration dynamics with government and technology startup (TS). The integration of agent-based model and causal loop simulation were employed to assess the TS collaboration impact on SME Industry 4.0 adoption and SME competition with larger competitors. The simulation results imply the SME collaboration with TS can lead to early adoption of Industry 4.0 which balances the business competition environment. The model also shows rising the government aid exponentially can help the SME to late adoption of Industry 4.0 which unable to sustain the SME in business competition. Thus, the developed integrative simulation model is a state-action planning model with each state result bounded to the previous state result that determined by initial input parameters. Conclusively, the model can be used as a resiliency planner for SME Industry 4.0 adoption.