Industrialization has transformed humans' perspectives and morality. At the same time, government policies have urged students to become innovators. This study argues that these policies have caused demoralization among Indonesian students in the Revolution 4.0 era. It applies a descriptive qualitative approach, using observation, interviews, and reviews of formal and informal policies available online. It objectively illustrates how universities have transformed in response to government policy. As shown in previous studies, higher education processes have ignored morality as they have industrialized and strived for innovation. Educational institutions are unable to act autonomously, being limited by state interests. At the same time, they have failed to dynamically articulate the meaning of Industry 4.0, focusing solely on products and the workplace. Critique and reflection are necessary to imbue students with civility and integrity. Such a constructive response is necessary to curb the demoralization process that has occurred in the Industry 4.0 era.