Organizational Capabilities for Successful Industrial Digitalization: A Framework for Transformation in Indonesia

The rise of digital technologies is reshaping industries worldwide, requiring organizations to develop key capabilities for successful transformation. In Indonesia, the Making Indonesia 4.0 initiative highlights the urgency of industrial digitalization. However, organizations face challenges such as digital skills gaps, infrastructure limitations, regulatory barriers, and resistance to change. While previous studies explore digital transformation and dynamic capabilities, research specific to Indonesia remains limited. This study conducts a systematic literature review to identify essential organizational capabilities for industrial digitalization in Indonesia. Key capabilities include leadership, innovation, agility, digital talent management, and strategic decision-making. By integrating global best practices, this research develops a framework to assess and enhance digital readiness. The findings provide actionable insights for policymakers and business leaders. The proposed framework helps organizations strengthen their digital capabilities, improving their ability to adopt and implement emerging technologies. Additionally, this study underscores the need for targeted policies to address infrastructure gaps, enhance digital literacy, and cultivate an adaptive organizational culture. Strengthening these capabilities will support Indonesia’s industries in achieving sustainable competitiveness in the Industry 4.0 era.