Industry
From The Report: Indonesia 2019
View in Online Reader

With the largest land mass, population and economy in South-east Asia, Indonesia is set on becoming the region’s industrial powerhouse. A historical reliance on natural resources has left its industry lagging behind that of regional peers Thailand, Malaysia and Vietnam in terms of exports, even as the country continues to clock robust GDP growth. Excessive bureaucracy and protectionist policies have further hindered the development of manufacturing exports, contributing to the double-digit decline in foreign direct investment in the third quarter of 2018, as well as the country’s persisting trade deficit. However, reforms are taking hold and Indonesia enjoyed GDP growth of 5.1% in 2018, with gains in both light and heavy manufacturing. Estimates put manufacturing’s contribution to GDP at 20.5%, not far below levels in most industrialised economies. This chapter also contains interviews with Airlangga Hartarto, Minister of Industry, and Rosan Roeslani, Chairman, Indonesian Chamber of Commerce and Industry.

Articles from this Chapter

Overview

Powering production: New policy and incentives encourage technological innovation and local manufacturing
OBG
plus

With the largest land mass, population and economy in South-east Asia, Indonesia is set on becoming the region’s industrial powerhouse. A historical reliance on natural resources has left its industry lagging behind that of regional peers Thailand, Malaysia and Vietnam in terms of exports, even as the country continues to clock robust GDP growth. Excessive bureaucracy and protectionist policies have further hindered the development of manufacturing exports, in part leading to the double-digit…

Interview

Search for knowledge: Airlangga Hartarto, Minister of Industry, on the shift to a knowledge-based economy
OBG
plus

Interview:Airlangga Hartarto Are Indonesian export-oriented companies sufficiently prepared to compete on a regional scale? AIRLANGGA HARTARTO: The Making Indonesia 4.0 roadmap was launched by President Joko Widodo in April 2018 and aims to make Indonesia one of the world’s 10 largest economies by 2030. The roadmap also aims to double Indonesia’s economic productivity. In order to achieve this, Indonesia will adapt revolutionary technologies and digitalisation under the umbrella of Industry…

Analysis

Technology comes to the four: Making Indonesia 4.0 seeks to strengthen the digital economy and attract foreign investment
OBG
plus

In 2007 Indonesia was riding the wave of the commodities boom: prices of copper, coal and gold were elevated, and with some of the world’s richest natural resources, it seemed just a matter of time before Indonesia became one of the world’s largest economies. When the global financial crisis of 2007-08 sent precious metals and commodities prices tumbling, however, Indonesia had a rude awakening. It became apparent that policymakers had wedded the economy to the extractive industries instead…

Interview

Global vision: Rosan Roeslani, Chairman, Indonesian Chamber of Commerce and Industry, on how local manufacturing is becoming internationally competitive
OBG
plus

Interview:Rosan Roeslani How must small and medium-sized enterprises (SMEs) be reinforced to improve e-marketplaces and reduce the reliance on online imports? ROSAN ROESLANI: Currently, only 6-7% of SMEs sell products on e-commerce sites, which is due to a variety of challenges. A lack of internet access in remote areas, low product quality, high logistics costs and the lack of marketing skills are hindering local businesses from using online platforms. Thus, online marketplace firms and…

Overview

Into high gear: Economies around the world are preparing for the opportunities and challenges brought about by the next industrial revolution
OBG
plus

The global economy is entering the Fourth Industrial Revolution (4IR), or Industry 4.0, based on the application of new digital and automated technologies in production processes and service delivery. These changes are bringing emerging markets improved productivity, as well as risks – namely, reshoring and the displacement of human labour by automation. Wealthier emerging markets, such as the Gulf states, which have the resources to invest in new technologies, and those with more established manufacturing sectors, such as countries in South-east Asia, appear best placed to reap the benefits of the 4IR. Many of these economies are creating…

Overview

Into high gear: Economies around the world are preparing for the opportunities and challenges brought about by the next industrial revolution
OBG
plus

The global economy is entering the Fourth Industrial Revolution (4IR), or Industry 4.0, based on the application of new digital and automated technologies in production processes and service delivery. These changes are bringing emerging markets improved productivity, as well as risks – namely, reshoring and the displacement of human labour by automation. Wealthier emerging markets, such as the Gulf states, which have the resources to invest in new technologies, and those with more established manufacturing sectors, such as countries in South-east Asia, appear best placed to reap the benefits of the 4IR. Many of these economies are creating…