Sector

Industry
Indonesia's industrial sector encompasses diverse subsectors that play a significant role in the country’s gross domestic product (GDP). Notably, manufacturing contributed 16.30 percent of Indonesia’s total GDP in the second quarter of 2023, with key activities including the manufacturing of textiles, automotive, electronics, and food processing. During the same period, other subsectors also experienced growth, led by the metal, computer, electronic devices, optical, and electronic appliances industry, which grew by 17.32 percent. This was followed by growth in the basic metal industry by 11.49 percent, the transportation industry by 9.66 percent, the food and beverage (F&B) industry by 4.62 percent, and the paper and recording media industry by 4.50 percent.
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Industry
Indonesia's industrial sector encompasses diverse subsectors that play a significant role in the country’s gross domestic product (GDP). Notably, manufacturing contributed 16.30 percent of Indonesia’s total GDP in the second quarter of 2023, with key activities including the manufacturing of textiles, automotive, electronics, and food processing. During the same period, other subsectors also experienced growth, led by the metal, computer, electronic devices, optical, and electronic appliances industry, which grew by 17.32 percent. This was followed by growth in the basic metal industry by 11.49 percent, the transportation industry by 9.66 percent, the food and beverage (F&B) industry by 4.62 percent, and the paper and recording media industry by 4.50 percent.
Notably, the F&B industry stands out as the only non-mineral industry to have made the largest contribution to the national GDP at 38.61 percent in the first quarter of 2023, having generated US$1.1 billion from 2,226 projects through foreign direct investment (FDI) and Rp 26.72 trillion from 5,416 projects through domestic investment sources.
Indonesia’s massive industrial development has enabled the industrial sector to provide extensive employment opportunities, with over 19 million people employed in the sector, making it the largest workforce in Indonesia as of 2019. By 2024, the government aims to further increase employment in the sector to more than 20 million people.
Among all the subsectors, the non-oil and gas manufacturing industry has emerged as one of the most important in terms of employment, providing work opportunities for approximately 14.13 percent of the Indonesian labor force in 2022. Companies within this subsector are mostly concentrated on the island of Java. Additionally, the Riau Islands are known to have the highest average net wage for manufacturing workers in the country, with around Rp 5.55 million per month as of February 2023.
Furthermore, Indonesia's industrial sector presents promising opportunities for growth and development across various fronts, including Industry 4.0 transformation, adoption of sustainable practices, regional integration with Southeast Asia and Pacific actors, downstream manufacturing, and empowerment of small and medium enterprises (SMEs). Particularly concerning Industry 4.0 transformation, the government administers the integration of advanced technologies into the production process to improve efficiency and product quality. Additionally, efforts are underway to reduce production costs by placing cement, refined petroleum, automotive, and F&B at the forefront of entering Industry 4.0.
Moreover, the incoming administration has promised to bolster the downstream agenda, especially in the mining sector, with plans for 20 new smelters set to become operational between 2024 and 2025. The shift towards downstream mining products, such as bauxite, copper, and tin has the potential to increase their value, with added values reaching up to three to 180 times along the value chain.
Latest News
East Nusa Tenggara Governor Melki Laka Lena and East Sumba Deputy Regent Yonathan Hani signed a strategic cooperation agreement on behalf of East Nusa Tenggara and East Sumba Regency, East Nusa Tenggara, respectively, with Jakarta Special Capital Region (DKI) Governor Pramono Anung in a closed meeting held on Mar. 22, 2025.
The cooperation aims to strengthen relations between the regions in various sectors, from the overall economy to the empowerment of micro enterprises. Several important points agreed upon in the meeting include:
- Opening Up for Investment: The DKI Jakarta Government is committed to opening investment opportunities in NTT to support economic growth and regional development;
- Collaboration in Agriculture and Plantations: Increasing the productivity of East Nusa Tenggara's agricultural and plantation sectors through the use of modern technology, farmer training, and support for market access from DKI Jakarta;
- Development of Micro, Small, and Medium Enterprises: DKI Jakarta is ready to support the development of MSMEs in East Nusa Tenggara by providing capital assistance, marketing access, and increasing the capacity of business actors in East Nusa Tenggara;
- Delivery of Superior Commodities: The delivery of beef, salt, and seaweed from East Nusa Tenggara to Jakarta, which is expected to expand the market for East Nusa Tenggara livestock breeders and farmers while meeting DKI Jakarta's need for food commodities;
- Capital Participation in PT Bank Pembangunan Daerah Nusa Tenggara Timur (Bank NTT): The DKI Jakarta Government plans to provide capital participation in Bank NTT to strengthen access of East Nusa Tenggara's local communities to financing and to support the province's banking industry.
Emotional relationships also strengthen this collaboration on top of mutual economic interests. Pramono's wife Endang Nugrahani is known to actively support woven cloth craftsmen in Sikka Regency, East Nusa Tenggara, which further strengthens cultural ties between the two regions.
"We are optimistic that this collaboration will have a positive impact and open up new opportunities for the people of East Nusa Tenggara," said Yonathan.