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Blockchain A New Buzzing Term
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The Hype of “Everything” 4.0
Regulatory Sandbox for Blockchain Application
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Business Trends in 2019
Snapshots A Practical Approach of Service Excellence in Higher Education
Risa Bhinekawati: Three Legacies For Life
Faculty News January 2019
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IPMI and Indonesia Mengajar: Bringing Leadership to Indonesia’s Remote Villages
IPMI BUSINESS REVIEW Editor-in-Chief Prof. Roy Sembel, Ph.D Agus Loekman, M.Si Managing Editors Heru Prabowo Dana Afriza, MBA Editors Heru Prabowo Tammy T. Geneberty Yumna Sofyan Contributing Editors Sudarmawan Samidi Dr. Leonnard Ong Rifa Zahirsjah Dr. Amelia Naim Photographer Fajri Ramdhani Media Production IDP Indonesia Art Designer IDP Indonesia Contributing Designer Ahmad Setia Account Executive Tammy T. Geneberty
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IN THE MAGAZINE Editorial Office: IPMI International Business School Jl. Rawajati Timur I/1. Kalibata, Pancoran. Jakarta Selatan. DKI Jakarta 12750 Indonesia P: 021-797-8888 F: 021-797-0509
E: magazine@ipmi.ac.id www.ipmi.ac.id The views expressed articles are the author’s and not necessarily those of IPMI Business Review or IPMI International Business School …………………………………………………………………………. For advertising information please email us at magazine@ipmi.ac.id …………………………………………………………………………. Copyright 2019 IPMI International Business School All rights reserved
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A WELCOME FROM THE CEO JIMMY M. RIFAI GANI IPMI EXECUTIVE DIRECTOR & CEO
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Greetings from IPMI International Business School! We are very excited to embrace the new year of 2019, as we leave 2018 with so many achievements received from prestigious institutions. IPMI is very proud to have been placed again as the highest rated private business school in Indonesia, with a three-palm category, by a prestigious world business school ranking institution based in France, Eduniversal. This is the six consecutive times IPMI is awarded such an achievement, in which this time we were fortunate to be handed this award during the Eduniversal World Convention 2018 in Dubrovnik, Croatia. We also take pride in having been appointed as Chairman of the Asian Chapter of the Microeconomics of Competitiveness (MOC)
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International Affiliate Network at the Institute of Strategy and Competitiveness – Harvard Business School in December 2017. IPMI successfully organized the first MOC Asian Chapter Conference on July 9-10, 2018, at our campus, where papers related to competitiveness were presented and reviewed by various scholars from the US, UK, Thailand, Taiwan, Philippines, Malaysia, Korea, Cambodia, Kazakhstan and others. The conference also featured the Minister of Village, Underdeveloped Regions, and Transmigration of the Republic of Indonesia, H.E. Eko Putro Sandjojo, as the keynote speaker. IPMI is also very proud to have leap frogged in the national ranking of the higher education institution conducted by the Ministry of Research, Technology, and Higher Education of the Republic of Indonesia. IPMI International Business School’s ranking has jumped from 1,240 in 2016 to 102 in 2018, from the thousands of higher education
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institutions in Indonesia. There is certainly still a lot of room to improve, and we intend to continuously strive to do our best. We believe that these achievements have been the result of the relentless efforts contributed by all IPMI stakeholders. We hope that that these achievements will enhance IPMI’s capacity to contribute more significantly to society. The theme of this edition of IPMI Business Review is the current trends of the business world. Through the interesting articles, we believe readers will be inspired and be able to take some of the concepts to not only increase their hopes, but also to come up with new ideas to implement for their organizations. Please enjoy this edition of the IPMI Business Review, and have a great year. Thank you.
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BLOCKCHAIN
A New Buzzing Term Blockchain – what is this actually? This article is a popular review to introduce in simple way of the concept and what will be the impacts in the future. By Heru Prabowo
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We are hearing the term of Blockchain more frequently now. A lot of media and experts are mentioning about it and usually connected to crypto currency i.e. Bitcoin, Ethereum and other crypto similar currencies. But what are they actually? To give you a glance of it, we know that usually a Bank has record of its customer’s financial data. In this case, basically the bank is the authorized one to keep it, while the customers give their trusts that the Bank will keep the record of their financial data correctly and always being updated. If something goes wrong, i.e. data corrupted, Bank server malfunction, or someone in the Bank does any crime, or any other reasons, then actually the customers do not have ability to check, verify and validate their own financial numbers before the incidents. While in fact it is their own wealth, something that they earn and belong to them. They just 100% rely on Bank capability to do the agreed function.
to keep updating the distributed ledgers based on previous ones, means they are transparent to everyone, so they can be checked, verified and validated collectively. Crypto financial records here means: the ledgers keep the records of their digital wealth, using a specific digital currency, in encrypted format. 2 most popular ones are Bitcoin and Ethereum, that can be used as payment tools for those accept this, similar like any real currency (IDR, USD, EUR) in daily transaction activity. By definition: A blockchain, originally block chain, is a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. Or by popular definition it means: an automatic created ledgers, contain the transaction record data of respective crypto currency, linked one to the other using cryptography. It is resistant to data modification as the ledgers
will be distributed to all parties where everyone collectively will verify and validating the ledgers & data record. Means if someone change the record but not validated by everyone collectively, his/her change won’t be counted as valid, thus avoid any frauds. It is invented by Satoshi Nakamoto, a pseudonym who wrote the Bitcoin whitepaper in 2008, to serve as the public transaction ledger of the cryptocurrency bitcoin, after “Satoshi” watched the mortgage bubbles exploded in US that year, where he feels that it is unfair that Bank can do almost anything to customer’s money without any approvals and they are the ones who will burden the costs. Hence the “decentralized spirit” is to hand over the authority back to the customers themselves. To quantify the wealth in this context, bitcoin is created and become the valid currency here (then known as cryptocurrency) and can be used as payment rail to do any related payment.
Now, what if there is a big idea to transfer the authority power from the Bank to the customers themselves? Means they are the one who can check, verify and validate the records collective way. So, in simple words, Blockchain is a collective way of some respective users to keep digitally the ledger (or simply record notes) of their (crypto) financial records, using a protocol that agreed by all parties, it means distributed ledger. This protocol is working automatically
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The good things about this system is: • Everyone related can check, verify and validate any ledgers • Ledgers are persistent for any modification as any modification will require approval from everyone involved and easily can trace back to the previous ones. Therefor any error, deliberate or not, can be traced & verified. • No misconduct of personal data usage as nobody knows the data belongs to which user, except the person him herself. The system will represent any user only as a crypto code, without any identity: name, age, location, occupancy, wealth, etc. Therefore, misusage user data like in Cambridge Analytica case, can be avoided. The concept itself is currently still in infant stage, means it is under development by everyone involved. Nobody, neither any government, big corporate, nor big capital individual/ firms can theoretically set the course of this development, as it will be nurtured and agreed by all related parties. Therefore, the blockchain format or status now day can be different from the application in 10 years from now. What will be remained is the decentralization spirit that authority should lies in the users themselves and not any one single, or some few parties.
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block chain technology
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Implementations in the future that already foreseen are: • No bank required, as financial status of everyone is kept in the internet. For any financial transaction just using i.e. a finger print to validate. The person him/herself who knows his/her financial status. This will eliminate most of banking/ financial institution: Bank, Fintech, Lender, etc. • Removing middle men: insurance agency, financial planner, as the system will advise intelligently of any product and company that most suitable with customers specific needs. • Self-provisioning, since there is no bank, no account activation required As this will impact to various business sectors, many parties try to influence the development and where it goes. For sure creates some pros & cons. However, this is already happening, and it is just a matter of time that this will impact our everyday life. Therefore, we better prepare it, otherwise will be late and someone else will take advantage. IPMI BUSINESS REVIEW
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“Regulatory Sandbox� for Blockchain Application Sudarmawan Samidi, Head of IPMI Research Center
Blockchain is currently a concept that has received significant attention in financial technology (FinTech). It combines several computer technologies, including distributed data storage, point-to-point transmission, consensus mechanisms, and encryption algorithms. It has also been identified as a disruptive innovation of the Internet era. However, as blockchain is a major breakthrough in data storage and information transmission, it might fundamentally transform the existing operating models of finance and economy, which might lead to a new round of technological innovations and industrial transformation within the FinTech industry.
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Since 2015, a number of major international financial institutions have begun to formulate plans for the blockchain sector. Blockchains are decentralized and permission less, which can lead to major disruptions in the financial sector, especially in payment clearing. Goldman Sachs, J.P. Morgan, UBS, and other banking giants have all established their own blockchain laboratories, working in close collaboration with blockchain platforms, and published a series of studies on this topic. Goldman Sachs even filed a patent for transaction settlement based on blockchain technology. Additionally, various national stock exchanges, such as the Nasdaq Stock Market and the New York Stock Exchange have also conducted in-depth research on blockchain technology.
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Recently, the banking industry in Indonesia is facing the impact of economic transformation, internet development, and financial innovations. Hence, the banking industry requires urgent transformation and is seeking new growth avenues. As such, blockchains could revolutionize
the underlying technology of the payment clearing and credit information systems in banks, thus upgrading and transforming them. Blockchain can establish a credit mechanism in a situation where there is a lack of mutual trust among parties, thereby resolving the high costs caused by the non-
technical aspects of centralization. The processes of financial services are fraught with problems, such as efficiency bottlenecks, transaction lag, fraud, and operational risks. It is believed that the majority of these problems can be resolved as a result of applying blockchain technology.
Comparison of traditional banking businesses, Internet finance businesses, and blockchain + banking businesses
Customer experience
Efficiency
Cost
Safety
Blockchain + Banking businesses
Traditional banking businesses Uniform scenarios
Internet finance businesses Rich scenarios
Rich scenarios
Homogenous service
Personalized service
Personalized service
Poor customer experience
Good customer experience
Good customer experience
Many intermediate links
Many intermediate links
Point-to-point transmission, disintermediation
Complex clearing process
Complex clearing process
Distributed ledger, transaction=clearing
Low efficiency
Low efficiency
High efficiency
Large amount of manual inspection
Small amount of manual inspection
Completely automated
Many intermediate links
Many intermediate links
High costs
High costs
Centralized data storage
Centralized data storage
Distributed data storage
Can be tampered
Can be tampered
Cannot be tampered
Easy to leak users’ personal information
Easy to leak users’ personal information
Use of asymmetric encryption
Poor safety
Poor safety
Good safety
Disintermediation Low costs
Users’ personal information is more secure
Source: Guo and Liang, Financial Innovation (2016)
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The development of blockchain in Indonesia is still in its early stages compared to the US, China, Japan and South Korea. However, people in Indonesia already have a deep understanding of the blockchain project and strong demand to participate in this market. According to the Director of ICT Infrastructure at the Indonesian Creative Economy Agency (Bekraf) Muhammad Neil El Himam, Indonesia is actively embracing the digital economy and the sophisticated technology represented by the blockchain is an important source of digital economic transformation. In addition, several companies engaged in developing and the function of the blockchain. They formed the Indonesian Blockchain Association (A-B-I) as a forum for industry players who share the same vision to innovate, advance and shape Indonesia’s blockchain technology ecosystem. Oscar Darmawan as General Chairperson of A-B-I stated that blockchain technology has enormous potential, and Indonesia has strong talent. Therefore, A-B-I wants to take this momentum to be able to
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take maximum benefit for Indonesia. Furthermore, Indonesian Chamber of Commerce and Industry (KADIN), Indonesian Blockchain Association, Bekraf, and HARA also formalized the Indonesia Blockchain Hub as a forum to accommodate blockchain activists to share and learn experiences and to support the acceleration of the growth of blockchain technology in Indonesia. As blockchain technology is still in the development stage in Indonesia, how should blockchains be regulated? Currently, there are 63 p2p lending companies have registered in OJK with a total distribution of IDR 7.64 trillion funding by June 2018. It has been distributed to 1.09 million borrowers. The Chair of the A-B-I Supervisory Board, Yos Ginting, stated that the enthusiasm of the A-B-I industry players needs to be supported by accommodative regulations and that can maximize the benefits of blockchain technology. For this reason, he added that a balanced approach is needed between aspects of caution and aspects of achieving potential economic benefits. Therefore, the Indonesia government need a cautious attitude toward this technology.
The regulatory sandbox originates from the UK, which intends to give a more flexible space for innovations. The sandbox delineates a restricted scope with simplified market access standards and procedures. Given that consumers’ rights are safeguarded, FinTech innovation enterprises or businesses are permitted to rapidly implement operations and are allowed to expand within the testing conditions of the regulatory sandbox. On August, 2018, Financial Services Authority (OJK) announces the operation of digital financial innovation center or it called “OJK Infinity” as a place where discussion with industries, regulators, government, academics, and innovation hub. The Head of financial services authority (OJK), Wimboh Santoso, stated that through OJK Infinity, the fintech industry is expected to be capable in bringing a financial service which is innovative, effective, efficient, and prioritize the consumer protection. OJK Infinity has three main functions. First, providing regulatory sandbox facility as a fintech incubator to balance innovation with consumer protection. Then, as an innovation hub, for digital financial industry (IKD) development as well as a whole IKD’s ecosystem development.
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In addition to the fintech center, OJK also releases the latest rules on digital financial innovation which will be the legal base to cover all innovations in the scope of the digital financial sector. POJK (OJK’s regulations) was made due to the need of a legal base for innovation in the existing financial sector, therefore, it can benefit and protect public affair. Moreover, the governments of Indonesia and Singapore stepped up the next step in the partnership for regulating financial technology services (fintech). The Financial Services Authority (OJK) and the Monetary Authority of Singapore (MAS) have signed cooperation for the development of the fintech industry in both countries.
The Chairman of the OJK Board of Commissioners, Wimboh Santoso, explained this cooperation was a follow-up to the previous meeting between two authorities that discussed efforts to increase innovation and financial services in their respective countries. OJK and MAS formed a special work unit to handle innovation and financial services. Some of the points that have become the focus of OJK and MAS cooperation include the mechanism of referral of fintech institutions between the two countries, potential projections of joint innovation, collaboration of the fintech industry and information exchange regarding trends and developments in the fintech market, and most recently regarding regulatory sandbox regulations and developments.
“This cooperation partnership is expected to be able to create a framework that can help fintech companies from both countries to be able to understand the rules and opportunities in every jurisdiction and can reduce “barriers of entry” for fintech companies that want to enter one of the markets.”
References: Marsya Nabila, August 21, 2018. “OJK Launches “OJK Infinity”, Digital Financial Innovation Center”. www.dailysocial.id Sakina Rakhma Diah Setiawan, October 12, 2018.”Indonesia Disebut Pasar Potensial Blockchain”. www.kompas.com Ramadhan Triwijanarko, March 21, 2018. “Diwadahi Asosiasi, Ini Wajah Blockchain di Indonesia”. www.marketeers. com Prayogo Ryza, October 15, 2018. “Regulator Indonesia dan Singapura Kolaborasi Kembangkan Industri Fintech”. www. dailysocial.id Ye Guo, Chen Liang, December 09, 2016. “Blockchain application and outlook in the banking industry”. www.link. springer.com
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Business Trends in 2019 “New Year, new me� doesn’t always just apply to individuals, but also to businesses. Businesses are always looking at opportunities for new and innovative ideas to build themselves. Businesses are all ears for trends that create buzz and improve decisionmaking in terms of marketing technological investments they will use up their money for.
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2019 is a year where most business trends will revolve around the abundance of new technology that changes how business is conducted today and in the future. A large theme in these trends will be improving service quality through data collection and analytics.
Moreover, accounting for the needs and preferences of the customer affects all sectors in a different way, the common denominator being data. Data collection and analytics are large how businesses are able to account for customer preferences and needs.
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Retail 2018 was a good year for the retail industry, with the industry reporting growth every month. This is cited by Jia Wertz of Forbes to be due to advancements in digital channels. In an ever-evolving market, retailers but adapt to new shifts in demographics, attitudes and consumer preferences.
• Faster Shipping in E-Commerce As e-commerce is becoming the most popular means of shopping because of its convenience. The sector expanded by 11.84% in September alone. Most brands now have an online shopping presence. With more and more brands joining the e-commerce market, a product can be easily be substituted from one brand to another. One major decision maker
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for the customer is fast shipping. A study by Marketing Charts found that for free shipping, a customer was willing to wait 5.5 days for their product to arrive at their doorstep – this is even shorter for paid shipping. Now, a customer is willing to only wait a full day less of 4.5 days. Fast shipping is predicted to be how e-commerce websites remain competitive.
• Shopping as an Experience Previously, retail was mainly focused on selling the product. Now, they also have to sell their customer’s an experience; they want a more engaging and interesting experience when shopping.
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Sephora has taken the concept of a “retail experience” into account. They combine traditional retail marketing elements with mobile applications that are unrelated to the customer’s purchase. Similarly, Samsung had a pop-up shop that featured its products but didn’t have any for sale. Customers now want a more unique experience and value it not more, then just as much as the product they are purchasing.
• Subscription “Boxes” Not only do customers want a unique experience when shopping, but they also want their product to be tailormade them individually. The catch is, they want this literally wrapped up and on their doorstep. These tailor-made subscription services witnessed huge expansion since 2010. Sales from 2010 were $7 million and grew to $2.6 billion by 2016. This trend is predicted to gain momentum hand in hand with giving their shoppers an innovative experience.
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Technology Within technology, we talk about digital transformation specifically. Digital transformation trends refer to not only technological shifts in businesses but also where technology, business, and society join together. Although these following business trends will encompass new technology, but also the customer and culture at the heart. Daniel Newman writing for Forbes gives us some of his predictions for 2019.
• 5G everywhere Indonesia is still in an LTE or 4G zone with talks of trying out 5G and even at a larger push, 6G. But, let’s talk about 5G. Newman predicts that in 2019, we will start seeing 5G zones worldwide. Big tech companies such as Qualcomm, Intel, Nokia, Ericcson, Samsung, and Huawei are big players in the push of trying to make 5G available all over the world. Mimosa Networks, an American gigabit wireless hardware company, is making an effort to roll out the 5G connection in urban and rural locations and paving the way for mobile providers to offer its services to its customers.
Natural language processing advancements are predicted to change services that can be provided without humans – predictions are that 40% of large businesses will adopt chatbots or artificial intelligence in some form to provide more services. Unfortunately, this may have negative impacts on the workforce and lead to a temporary increase of structural unemployment.
• Connected Clouds Cloud storage is when data is stored on a remote server to be accessed on the internet, or ‘cloud’. Companies have been adopting the cloud as a means to store their data. They’re still figuring out whether they need a private cloud, public cloud or data center.
Newman thinks a business trend this year is the use of a hybrid of these clouds or a connected cloud will help meet a company’s changing needs. ‘Multicloud’ is predicted to be the new buzzword when it comes to the topic of storing data on the cloud to represent a seamless, secure and streamlined cloud.
• Data Analytics, Machine Learning, AI Data is the whole basis of the technological business trends, and with the buzz of Industry 4.0, data analytics, machine learning, and artificial intelligence will enhance the quality of businesses’ decision making. Improved processing power with leading companies such as Microsoft, SAP, SAS, and Salesforce is helping to promote data being used to improve data collection and business analytics.
• Chatbots improving significantly Chatbots are an artificial intelligence program that engages in conversations using chat text, usually used for customer service purposes. It’s predicted that chatbots will improve in making their language more natural language processing and sentiment analytics
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Banking An amazing question is how is the ever-evolving world of technology going to impact where businesses are storing their cash. New competition from FinTech and non-financial firms and growing customer expectations are huge drivers for these banking trends. Amith C, Amit Kumar and Avinash Saxena of Capegemini give us some insight on what banking trends to expect in 2019.
• Accelerated adoption of the Cloud Along with the collection with big data is the question of where to store it. More banks are now going to adopt the cloud for their data storage. This allows banks to allow flexible workplace management and manageable IT infrastructure while cutting costs.
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This will lead to a larger trust of cloud services with constant upkeep needed. As banks create more analytics and artificial intelligence use cases, data storage in the cloud will be making these cases more efficient.
• Voice Assistants In the digital era, banks are trying to explore different ways to digitally interact with their customers. Voice assistants are being adopted into homes through products like the Amazon Echo, Google Home and Siri on Apple products. Because of this, banks will try to integrate into this technology into customer acquisition, retention, marketing, and sales.
This will help banks be able to target the rights customers using their profile data and cater to what products they might need – this goes back into getting tailor-made products for the customers. They imply that banks must come up with a comprehensive strategy on the boundaries and concerns there will be with voice assistants.
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The Hype of “Everything” 4.0 We live in a world today where technology is advancing at a rapid rate – for most, it’s hard to keep up with. Noticeably to consumers, smartphone screens are getting larger with the phone itself getting thinner. For businesses, supply chain logistics and general practices have changed due to digitalization of business correspondences and data. These advancements can be categorized into technology periods and Industry 4.0 is the period we are currently in. Industry 4.0 seems to be a buzzword we hear in the business and technology world -- it’s a concept that doesn’t click in our heads when we first hear it. So, what is it? According to Deloitte, the simplest answer is that it’s the promise of a new industrial revolution. We’ve all heard of the industrial revolution and associate it with the very first one, where agricultural societies became more industrialized and urban in the 18th to early 19th century. Industry 4.0 is the fourth iteration of the industrial revolution in our time. To better understand industrial revolutions, let’s talk about its history. The first Industrial Revolution was when machinery for production was first invented with increasing the use of steam power – the most wellknown invention coming out of it being the cotton jenny for the textile industry and the steam engine.
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The second Industrial Revolution, or the Technological Revolution, was in the late 19th century up until before World War II. This was when preexisting industries were expanded upon and mass production was introduced to manufactures. The third industrial revolution, or the Digital Revolution, is when manufacturing became digital. Starting in the 1980s, it’s signified by the beginning of computerization and automation. This is when technology such as robots and various machines started to replace humans on assembly lines. As each new industrial revolution builds on the last, Industry 4.0 builds on the third industrial revolution. Forbes says that building onto the computerization that occurred in Industry 3.0, computers will be able to communicate with each other in real-time and make decisions without the aid of humans.
This means, in terms of manufacturing, a huge outcome of Industry 4.0 - artificial intelligence is predicted to be the smart factory. This relies on collection of a data to make smart machines smarter as new data is added. As a result, the world’s manufacturing process will become more efficient and less wasteful. “[Industry 4.0] represents the ways in which smart, connected technology would become embedded within organizations, people, and assets, and is marked by the emergence of capabilities such as robotics, analytics, artificial intelligence, and cognitive technologies, nanotechnology, quantum computing, wearables, the Internet of Things, additive manufacturing, and advanced materials,” writes Mark Cotteleer and Brenna Sniderman of Deloitte.
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Olivier Scalabre from Boston Consulting Group gives the nine technology trends that are the building blocks of Industry 4.0: 1. Big Data and Analytics The collection and comprehensive evaluation of data from many different sources (eg. Production equipment and systems as well as an enterprise- and customermanagement systems) will become standard to support real-time decision making 2. Autonomous Robots Robots (that will be more soft effective and have more capabilities than those used at present) will interact with humans and learn from them.
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3. Simulation Simulations will be used more in plant operations to take real-time data and accurately imitate the physical world in a virtual model. This allows operators to test and adjust the machine in this simulation before installing it in the physical world which decreases machine set up time and increasing its quality
4. Horizontal and Vertical System Integration In industry 4.0 businesses will internally become most cohesive as crosscompany data- integration networks evolve and enable truly automated value chains 5. The Industrial Internet of Things More devices (including unfinished products) will be enriched with embedded computing. This will decentralize analytics and enable real-time responses
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6. Cybersecurity Because of the increased digitization of data, there is a significant demand for protection from cybersecurity threats. This means more reliable and secure communications within.
8. Additive Manufacturing An example of additive manufacturing is 3-D printing, which helps prototype and producing parts. These will be used to produce small batches of customized products
9. Augmented Reality 7. The Cloud Data that is productionrelated will be shared and synchronized through a cloud across sire and companies. This results in a quicker and more datadriven service for production systems
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Augmented reality will help workers receive real-time information to improve decision making and work procedures. It will help in services such as selecting parts in a warehouse and sending repair instructions over mobile devices
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Our beloved country of Indonesia is planning to make some moves in to include ourselves in Industry 4.0. President Joko Widodo wants to prepare Indonesia in rapid and wide transformations. He hopes with their participation in Industry 4.0, more jobs will be created for the never-ending supply of job seekers in the country and to enter the top ten largest global economies by 2030. Widodo calls this new innovation “Making Indonesia 4.0.” According to Indonesia Investments, the “Making Indonesia 4.0” roadmap names five key sectors as their priority. These sectors are food and drinks, automotive, textile, electronics, and chemicals. The Industry Ministry, which constructed this roadmap, believes that these sectors can
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push Indonesia in the world economy in terms of GDP and make Indonesia a leading player in these sectors on a global scale. Ardo Dwitanto, the head of IPMI’s Investment Gallery, says it’s realistic that Indonesia could be one of the world’s top ten economies. “Industry 4.0 is a hot topic right now and President Joko Widodo is very excited about it,” says Dwitanto, “it is realistic that Indonesia will enter the top ten global economies because the Indonesian market is very large. We are the fourth largest population in the world. Dwitanto continues, “On the other hand, we need to address the infrastructure problem and gap in workforce skills of the population to execute the ‘Making Indonesia 4.0’ roadmap. We at least have to improve the
education level and teach the workforce the skills needed. Also, since we are an archipelago with many islands, we need to improve infrastructure to have good supply chains.” Industry Minister, Airlangga Hartono, predicts that with the implementation of the “Making Indonesia 4.0” roadmap--which includes development and integration of connectivity, technology, information, and communication--will lead to quick results in the economy. If it is successful, Indonesia’s real economy will have a boost of 1 to 2 percent and GDP growth rate will be 6 to 7 percent per annum from 2018 to 2030. Even with these numbers, we can’t clearly see how Industry 4.0 will affect Indonesia and the rest of the world - only time will tell.
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31 January 2018 Power Talk “Prospek Ekonomi Global dan Domestik: Peluang dan Tantangan Bagi Dunia Usaha” with Dr. Aviliani, S.E., M.Si (INDEF Economist)
31 January 2018 Public Lecture “Doing and Undoing Gender” By Dr. Diane Wright (Head of International at Manchester Metropolitan University Business School)
2 March 2018 Bitcoin Talk “Membaca Arah Nasib Bitcoin di Indonesia” Featuring Oscar Darmawan CEO of INDODAX (Indonesia Digital Asset Exchange) and Indonesian Finance Regulator representatives. 24
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13 March 2018 One Brick One Hope Fundraising activity to rebuild schools in Indonesia impacted by natural disasters. Inspiring Talk with Petra Nemcova, the supermodel survivor of the 2004 tsunami in Thailand and founder of Happy Hearts Fund.
28 March 2018 IPMI Australian Culture Month Featuring Mr. Allaster Cox, Chargè d’Affaires, from the Australian Embassy in Indonesia.
24 April 2018 Power Talk Women Empowerment “Women in Business” Featuring: Puji Nur Handayani (President Commissioner of PT Gapura Angkasa, Commissioner of PT GMF AeroAsia Tbk), Greta Bunawan (Co-founder of PopBox Asia), and Lyra Puspa (President & Master Coach of Vanaya Coaching International) IPMI BUSINESS REVIEW
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14 May 2018 Harvard Business School Field Global Immersion Visitation from Harvard Business School MBA students to IPMI Campus.
31 May 2018 Public Lecture “Ecosystems and Strategic Innovation Within Industry 4.0” By Prof. Dr. Paul Matthyssens, Dean of Antwerp Management School.
9-10 July 2018 Microeconomics of Competitiveness Conference MOC Conference “Comparative Cluster Initiative in Asia”
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30 July 2018 Power Talk “Branding and Marketing Strategy in Today’s World” With Mary Ellen Muckerman, Vice President (Brand Strategy and Services) at Mozilla 17 October 2018 Discussion Series : Industry 4.0 – Senior Executive MBA Melbourne Business School Visitation of Senior Executive MBA Melbourne Business School students to IPMI Campus.
23 October 2018 Guest Lecture “Strategic Management” by H.E. Eko Putro Sandjojo, BSEE., MBA (Minister of Villages, Disadvantaged Regions and Transmigration of Republic Indonesia)
2-6 Desember 2018 Youth Global Forum, Paris, France IPMI MBA Students (Nazneen Judge and Faruqi Ismail) compete in 2018 Youth Global Forum and won the Social Media award. IPMI International Business School participated as Academic partner in this forum and delivered scholarship to the winner and our Faculty member, Ardo Dwitanto, as one of the expert speaker. IPMI BUSINESS REVIEW
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10 Desember 2018 Microeconomic of Competitiveness (MOC) Faculty Workshop at Harvard Business School, Boston, USA IPMI International Business School represented by Jimmy Gani, MPA (Executive Director & CEO) attended MOC Faculty Workshop, hosted by Institute for Strategy and Competitiveness under Prof. Michael Porter. In this special opportunity, Mr. Jimmy Gani, MPA transferred of the leadership of the MOC – Asian Chapter to Dr. Alvin Ang from Ateneo De Manila University, Phillipines.
18 Desember 2018 Loka Karya Nasional APTISI Wilayah III Loka Karya Nasional Asosiasi Perguruan Tinggi Swasta Indonesia Wilayah III. 20 Desember 2018 BBA Class 2016 visit World Bank Office The BBA students met Samuel Clark (Task Team Leader - Program Inovasi Desa) and Lestari Boediono (Senior Communications Officer).
July – November 2018 Lomba Simulasi Investasi Saham 2018 Series of event “Lomba Simulasi Investasi Saham 2018.” Kicked off on July 2018 until November 2018, the participants are high school students who compete to win scholarships and cash prizes. 28
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A Practical Approach of Service Excellence in Higher Education As a response to high quality labour and technological advancements, developing countries such as Indonesia now encounter a free education market. Because of the increase of demand in quality and well-educated labour, higher education providers need to keep up with demand. This leads opportunities and challenges to institutions in providing their education to students. These higher education institutions in the country vary in quality and uniqueness, which leads to fierce competition among themselves. The scope of competition is even larger as there is an excess supply of institutions According to Hina Khan and Harry Matlay in Education+ Training (2009), the service excellence is an indicator that many universities use to accomplish sustainable competitive advantage. The ability of universities to fulfill their consumers’ desires exceeds expectations will lead to satisfaction, positive image, word of mouth and loyalty. The advantages of these services are as an integral part of very diverse educational services including employees and other stakeholders who are directly responsible for providing services to their students.
Dr. Leonnard Ong
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In an effort to meet consumer’s expectation, practical approach of service excellence in higher education is required that aims to motivate and to construct a high commitment to the stakeholders.
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The objectives of this practical approach are: to explain the concept of service quality and its relationship with customer satisfaction and loyalty as well as the level of organizational profit based on the service-value chain model; to explain how service quality is applied effectively to higher education; to explain the six levels of service quality, and to explain; and to identify customer touch point To solve these problems, the activity of the practical approach of service excellence is required for university lecturers and staff.
The service quality was proposed by James L. Heskett, Thomas O. Jones and others in Harvard Business Review (1994), based on a service-value chain. This service-value chain explains the basic marketing principles in the service sector, including educational services. This model specifically outlines a causal relationship that indicates how employee satisfaction and internal management contribute to service quality and customer satisfaction and how they can influence profit and growth of the organization. The relationship of this model is indicated in the figure 1.
Service concept: results for customers
Workplace design Job design Employee selection and development Employee rewards and recognition
This figure describes the relationship between profits, internal employee as well as customer satisfaction and loyalty, and productivities. The relationships can be explained as follows: 1. Profit and growth of the organization are influenced by consumer loyalty. 2. Loyalty is a result of customer satisfaction. Satisfied consumers are the result of their perceived service quality 3. Consumer satisfaction is influenced by the value of services provided 4. The value of services provided to consumers will depend on the level of satisfaction, loyalty and productivity of employees who work for the institutions 5. Employee satisfaction is the result of all forms of policies and company supports for their employees in providing services.
Retention Repeat business Referral
Service designed and delivered to meet targeted customer’s needs
Tools for serving customers
Figure 1. Relationship on the service-value chain model Source: Heskett, Jones, Loveman, Sasser, & Schlesinger (1994)
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E.L. Melnic in Economic Sciences (2016) stated the six levels of service quality have to identify, which are, from lowest to the highest level: criminal, basic, expected, desired, surprising, and unbelievable. In higher education, the minimum expectation is at the expected level, which is to provide services to consumers as expected. Consumers who receive expected service quality will usually make a repeat purchase if there are no better alternatives. Customer touch points are presented which tie into the service-value
chain model. These are the touching points which shape consumers’ perceptions of service quality given by universities, of which, institutions need to choose which points are important to the consumer. The three ways to evaluate consumer touch points are 1) through information, 2) through attractive value, and 3) through transaction values. The expected goal of identifying touch points is to achieve the unbelievable perception of service quality. The service-value chain model explains the relationship between
internal consumers, external consumers and the ultimate goal of the organization’s profit level. In the case of universities, it is time for institutions to pay special attention to service quality both internally and externally and to not only focus on quantitative and administrative indicators. Internal service quality will guarantee external service quality that will create student satisfaction and loyalty. These states will ensure universities have competitive advantages in the long run.
About Dr. Leonnard Ong As Practitioner and Academician for almost 25 years, Leonnard Ong is Board Advisor of IPMI International Business School (IPMI IBS) and a Lecturer for MBA and BBA Program. His major area of teaching includes Sales and Marketing topics, Strategic Global Entrepreneurship, Innovation and Entrepreneurship. Currently, he is Director of Business for Frontliner Services since 2010, a leading Management Consultant Firm in Indonesia.
Dr. Ong’s current research are primarily in the areas of Sales Management, Services Interface, e Service/ e Satisfaction/ e Loyalty Model, Consumer Behavior and Life Style. Dr. Ong has published over 14 articles in Marketing, Loyalty, e Loyalty and has appeared in International Journal of Instruction, ERIES Journal, Marketing Science Journal and others.
REFERENCES Heskett, J. L., Jones, T. O., Loveman, G. W., Sasser, W. E., & Schlesinger, L. A. (1994). Putting the service-profit chain to work. Harvard business review, 72(2), 164-174. Khan, H., & Matlay, H. (2009). Implementing service excellence in higher education. Education+ Training, 51(8/9), 769-780. Melnic, E. L. (2016). Techniques for measuring customers’ satisfaction in Banks. Bulletin of the Transilvania University of Brasov. Economic Sciences. Series V, 9(1), 23. 32
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Thank you for supporting
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Jakarta, 23 January 2019
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OUR CLIENTS IN 2018
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Risa Bhinekawati:
Three Legacies For Life 36
If you think you’re ambitious, have you met Ibu Risa? Ibu Risa Bhinekawati is a lecturer here at IPMI International Business School. In her words, she teaches “anything that relates to soft skills and development.” The list of classes she teaches is seemingly endless – she lectures for classes such as International Human Resources, Organisational Behaviour, Corporate Strategy, Sustainability and Global Outlook.
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While teaching here, she also researches Social Entrepreneurship and relates to corporate social responsibility and human capital development. She even wrote a book about these topics, mainly sourced from her PhD dissertation. One of her books, titled Corporate Social Responsibility and Sustainable Development: Social Capital and Corporate Development in Developing Economies, her book was published by Routledge Publishing based out of the UK. Aside from this textbook, Ibu Risa has been published in multiple academic journals. She has also contributed to Neng Koala, a book of stories by Indonesian women about their experiences when living abroad in Australia.
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Let’s jump back a bit - Ibu Risa was born in Pontianak but grew up in Jakarta. She received her Bachelor’s degree from University of Indonesia in Economics while working as to support herself. “While getting my Bachelor’s degree I worked in the morning and studied in the afternoon.” Ibu Risa says. Including this degree, she has four degrees in total. These include a Masters of Business Administration from Australian National University, a Masters of International Public Policy in International Policy and a PhD in Management from Australian National University. As you can tell, she’s definitely a world traveller.
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Ibu Risa has always aspired to become an academic “I’ve always aspired to become a lecturer, but in my career journey I did many other things before I reached my goal,” she says. Although she is finally in her dream field of academia, she took quite the journey to get here through many jobs in the public and private sector. She started out working at the American Embassy in Indonesia. “Professionally, I started my career in American Embassy as a consular assistant and was a commercial specialist at the embassy when I finished my degree.” She eventually started working as a chairperson at the Indonesian Telecommunications Society where she helped lead the reformulation of Indonesian telecommunications law in 1997. “Now the Indonesian telecommunications is flourishing,” she says, “I’m happy to say I had a little part in helping it do so.”
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In between studying her postgraduate degrees abroad – all paid for by scholarship, by the way and she consistently at the top of her class – she continued to work at her professional career. She was the Secretary General at Indonesian Synthetic Fiber Makers Association, to Ericsson Indonesia’s first female board member as the Vice President of Human Resources & Organization. Here, she became part of Ericsson Global’s knowledge management team and frequently travelled between Stockholm and Jakarta. Later, she became COO at Partnership for Indonesian Governance Reform under the United Nations Development Programme. She then decided to move back into the private sector and became the Head of Corporate Affairs at Unilever Indonesia.
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Following the completion of her second postgraduate degree in America, Ibu Risa became a Chairperson and Executive Director at Danamon Peduli Foundation where she continued to make huge contributions to society. “I started the community development programme in 2007, and in 2009 our community development programme where we convert market waste into high quality compost won the BBC world challenge as a runner up.” Realising that she was approaching the maximum age of a scholarship she’d been eyeing, she applied “to go back to [her] real passion of academia.” She received the scholarship to received her PhD from ANU in Canberra. Upon completing her PhD, she finally got her dream job as a lecturer at Podomoro University. Wanting a change of location and a university that offered beyond a Bachelor’s degree, she was recommended to teach at IPMI. And now, here she is at our university!
Currently while teaching at IPMI, she is also working on her passion project. As founder and owner of PT Bhineka Belitung Lestari, she developed a social enterprise in a Belitung reserve for indigenous plant called the Ceylon hill gooseberry, or karamunting. Ibu Risa was inspired by the berry’s boom in Vietnam and its versatility to be produced into a plethora of products. Ibu Risa is proud that she was able to get this project into motion as she wants it to be a part of her legacy. “The three things you leave on earth when you die are your children that pray for you,” she begins, “then, your knowledge that you share, which is why I wanted to become an academic, and your fortune that can be used by many people.” With a glimmer in her eye, she finishes with, “My dream is that the agroforestry that I contributed to will be managed by the communities surrounding the forest so they can benefit from it and earn their income.”
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IPMI AND INDONESIA MENGAJAR : Bringing Leadership to Indonesia’s Remote Villages
It will be nearly twenty years since I have been involved in Indonesia Mengajar (IM), a collective effort in fulfilling Indonesia founding fathers’ promise in declaring nation independence through spreading out quality education to all over the country. By Rifa Zahirsjah IPMI Director of Admission and Student Affairs
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As an IPMI International Business School faculty member who is also responsible for the Student Affairs Department, I am proud to be part of this movement which is in alignment with IPMI’s vision to develop transformative leaders. What better way to develop future leaders than by having Indonesia’s best graduates deployed to various remote areas of Indonesia to teach for one year in elementary schools. After all, a leader is someone who creates another leader.
Since it was founded in 2009, Indonesia Mengajar has been recruiting and training Indonesia’s best graduates to be deployed to various remote areas of Indonesia to teach for one year in elementary schools. Some of these young people, if not many, are graduates from the best schools in the country such as Universitas Gajah Mada (Jogjakarta) and Universitas Indonesia (Jakarta), and there are those which are graduates from reputed overseas universities such as Nanyang Technological University (Singapore). source : kompas.com
The tightly selected individuals who are chosen by Indonesia Mengajar are called Pengajar Muda (PM) or Young Teacher. The number of applicants to become a PM can reach 10,000 but only a maximum of 50 will be selected. The maximum age to be a PM is 26 years old. For one year they will live in a remote area where the culture is a far cry from the cultural practices of the PM candidates who are mostly from the big cities of Indonesia. PM is not just expected to teach but also to influence the local people on the importance of education. Many of these remote areas are often not known to us or even not identified in the map such as Torosubang, a little village in the coastal area of Botang Lomang Island, South Halmahera, North Maluku. As such, preparing and training the PM candidates to be ready for their role is no small task. The training is intensive and takes a period of two months. 40
The PM candidates are taught pedagogical teaching methods and leadership, hence, my role was to share knowledge of leadership skills and to have the PM candidates ready to interact with the local people. After my session, the PM candidates was to acquire a good sense of self-awareness and the ability to influence and coach others. Even after many years of being involved in the development of Pengajar Muda, I never cease to be amazed by these 22 to 26 years old smart, energetic, idealistic, and honest people willing to leave the comfort of their current lifestyle and enter into a one year of very (sometimes extreme) modest living in a remote village. Sharing my knowledge with these true leaders raises my pride and provides an optimistic feeling to the fact that Indonesia’s future is bright and in good hands.
The writer is a Lecturer and Director of Admission and Student Affairs at IPMI International Business School. She teaches Leadership, Thought Leadership, Business Communication, and Global Outlook. She is also a volunteer assessor and trainer for the Indonesia Mengajar movement.
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IPMI’s Faculty supporting the 17 SDGs (Sustainable Development Goals) of the United Nation.
The 17 sustainable development goals (SDGs) to transform our world:
March 2018. Sustainable Development Goals (SDGs) are the Global Issues addressed by Business Leaders around the world. IPMI vision is to become a leading worldclass business school producing transformative leaders by the year 2020, hence IPMI is committed to support the SDGs. Pioneered by Amelia Naim Indrajaya (far left) the Center for Sustainability Mindset and Social Responsibility (CSMSR) was established to support IPMI International Business School’s commitment toward SDGs. Faculties of IPMI are committed to enhance competitive advantage through research collaboration supporting the 17 Sustainable Development Goals of the United Nation. Currently IPMI is working together with the Ministry of Village, Disadvantage Regions and Transmigration and other institutions in realizing the collaboration of the quadruple of ABCG Academics, Business, Communities and Government in improving the welfare of the indigenous people.
The 17 SDGs: 1. No Poverty, 2. Zero Hunger, 3. Good Health and well-being, 4. Quality Education, 5. Gender Equality, 6. Clean Water and Sanitation, 7. Affodable and Clean Energy, 8. Decent Work and Economic Growth, 9. Industry, Innovation and Infrastructure, 10. Reduced Inequality, 11. Sustainable Cities and Communities, 12. Responsbile Consumption and Production, 13. Climate Action, 14. Life Below Water, 15. Life on Land, 16. Peace and Justice Strong Institutions, 17. Partnership to achive the goals
GOAL 1: No Poverty GOAL 2: Zero Hunger GOAL 3: Good Health and Well-being GOAL 4: Quality Education GOAL 5: Gender Equality GOAL 6: Clean Water and Sanitation GOAL 7: Affordable and Clean Energy GOAL 8: Decent Work and Economic Growth GOAL 9: Industry, Innovation and Infrastructure GOAL 10: Reduced Inequality GOAL 11: Sustainable Cities and Communities GOAL 12: Responsible Consumption and Production GOAL 13: Climate Action GOAL 14: Life Below Water GOAL 15: Life on Land GOAL 16: Peace and Justice Strong Institutions GOAL 17: Partnerships to achieve the Goal
QUALITATIVE RESEARCH METHOD WORKSHOP 09 May 2018 Facilitator: Amalia E. Maulana, Ph.D., Brand Consultant & Ethnographer (IPMI alumni and Qualitative Research Expert) Qualitative Research plays a significant role in most studies. In order to refresh and to enhance the research capability of all researchers in general and IPMI faculty members in particular, LPPM conducted a Qualitative Research Method Workshop. The workshop was attended by researchers from various universities, companies and IPMI faculty members. IPMI BUSINESS REVIEW
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IPMI International Business School collaborated with Tarumanegara University, acting as Co-Host organized The Seventh International Conference on E ntrepreneurship and Business Management (ICEBM) entitled “The Role of Entrepreneurs in Promoting Tourism and Hospitality Industry� on 8-9 November 2018, in Hotel Conrad, Bali
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