Y&S Insights: Cybersecurity in Indonesia’s Manufacturing Industry

Y&S Insights ● The manufacturing industry in Indonesia, a cornerstone of the nation’s economy, is undergoing a significant digital transformation. Contributing 18.67% to the GDP and projected to elevate its GDP contribution to 28% by 2045, the sector is one of the largest in the country. However, this rapid digitization has exposed manufacture industry to a surge in cyber threats.

Data from Awan Pintar reveals a 264% increase in cyberattacks in Indonesia from the second semester of 2023 to the first semester of 2024 (All sector including Manufacture). This article explores the state of cybersecurity in Indonesia’s manufacturing sector, highlighting trends, drivers, barriers, challenges, and future opportunities.

The Adoption of Cybersecurity in Manufacturing Sector

The manufacturing sector in Indonesia is at a pivotal stage in its cybersecurity maturity. According to Y&S Indonesia insights, the industry currently operates at Maturity Level 1 (Initial), characterized by unpredictable and reactive cybersecurity measures. This is in stark contrast to sectors like Banking & Financial Services, which are at Maturity Level 4 (Quantitatively Managed), implementing the cybersecurity and complying with regulations.

The Adoption of Cybersecurity in Manufacturing Sector

The manufacturing sector in Indonesia is at a pivotal stage in its cybersecurity maturity. According to Y&S Indonesia insights, the industry currently operates at Maturity Level 1 (Initial), characterized by unpredictable and reactive cybersecurity measures. This is in stark contrast to sectors like Banking & Financial Services, which are at Maturity Level 4 (Quantitatively Managed), implementing the cybersecurity and complying with regulations.

The growth of cybersecurity adoption in manufacturing is influenced by several drivers and barriers:

Drivers

• Rising Cyber Threats: The exponential increase in cyberattacks is pushing manufacturers to invest in protective measures.
• Digital Transformation: The industry 4.0 initiativeencourages the adoption of IoT and smart technologies, necessitating robust cybersecurity.
• Regulatory Compliance: While there is no exclusive regulation for manufacturing, broader laws like Presidential Regulation No. 82 of 2022 mandate cybersecurity for vital information infrastructure, including manufacturing.
• Government Support and Foreign Investment: The government’s focus on economic backbones like manufacturing, combined with foreign investments, is fostering a cybersecurity-conscious environment.

Barriers

• Implementation Cost: High costs of deploying SOC services and advanced tools like XDR or SIEM deter smaller manufacturers.
• Professional Shortage: A lack of skilled cybersecurity professionals in Indonesia hampers the sector’s ability to manage threats effectively.
• Lack of Awareness: Many manufacturers, especially SMEs, remain unaware of cyber risks, operating at a reactive rather than proactive level.

Challenges in Cybersecurity Adoption

The manufacturing sector faces several challenges in strengthening its cybersecurity posture:

• Low Maturity Level: At Maturity Level 1, most manufacturers lack standardized processes, leaving them vulnerable to attacks. Manufacturing sector struggles with basic threat detection and response.
• Supply Chain Vulnerabilities: The interconnected nature of manufacturing supply chains, especially with global players, increases the risk of third-party breaches.
• Legacy Systems: Many manufacturers rely on outdated systems that are incompatible with modern cybersecurity solutions, making them easy targets.

Prospects

Despite the challenges, the manufacturing sector in Indonesia presents substantial opportunities for cybersecurity growth:

• Government Support: Initiatives like the Industry 4.0 roadmap  and partnerships with global firms can drive cybersecurity investments.
• SOC (security operation center) Adoption: Moving toward Maturity Level 2 (Managed) by adopting co-managed or hybrid SOC models can help manufacturers improve threat detection and response.
• Technology Integration: Leveraging tools like XDR for extended visibility across endpoints, networks, and cloud environments, as well as SIEM for log ingestion and monitoring, can enhance security.
• Education and Training: Increasing awareness and training programs for cybersecurity professionals can address the talent shortage, enabling manufacturers to build resilient defenses.

Conclusion

The manufacturing industry in Indonesia stands at a critical juncture as it navigates the dual forces of digital transformation and rising cyber threats. With an increase in cyberattacks and a low maturity level in cyber implementation, the sector faces significant risks but also opportunities for growth.

By addressing barriers like implementation costs and professional shortages, and leveraging drivers such as government support and foreign investment, manufacturing sector can strengthen their cybersecurity posture. The future lies in adopting advanced tools, improving awareness, and aligning with global standards to protect this vital economic backbone.●

^{YAMADA Consulting & Spire (Y&S) merupakan perusahaan riset dan konsultasi bisnis terkemuka di dunia dengan kantor pusat di Tokyo, Jepang, dan kantor pusat regional Asia Pasifik di Singapura. Sebelum diakuisisi oleh Yamada Consulting Group, perusahaan ini dikenal dengan nama Spire Research and Consulting.}

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