(Source: supplychainindonesia.com)

The Center of Economic and Law Studies (Celios) has identified six industrial sectors in Indonesia with significant growth potential in 2025. These sectors include high-tech industries for renewable energy components, semiconductors, textiles, automotive spare parts, iron and steel, as well as downstream processing in the fisheries and agriculture sectors. Bhima Yudhistira Adhinegara, Director of Celios, explained that high-tech industries supporting renewable energy components have strong growth prospects, given President Prabowo Subianto’s commitment to developing 75 gigawatts (GW) of clean electrification by 2040. “There are opportunities in high-tech industries such as energy storage batteries, as well as components for solar panels, wind turbines, and hydropower plants,” he stated, as reported by Antara on Thursday (January 2, 2025). He emphasized that the faster the government aims to achieve clean electrification, the more it must align with the preparedness of domestic supply chains. This, in turn, could drive investment in various new derivative industries. Bhima also noted that the semiconductor, textile and garment, automotive spare parts, and iron-steel industries are likely to expand due to the ongoing trade war between the United States and China. As geopolitical tensions persist, Indonesia has the opportunity to strengthen its role as a key player in the global supply chain, particularly in semiconductor manufacturing and textile exports. The government has been working to attract foreign investments to boost domestic semiconductor production, which is essential for industries such as consumer electronics, automotive, and telecommunications.

In the textile sector, Indonesia benefits from a competitive workforce and access to raw materials, positioning it as a major supplier to international markets. The global demand for sustainable textiles and eco-friendly fashion is also driving innovation within the industry. Many manufacturers are investing in green technology and sustainable production practices to meet the environmental standards set by international buyers. The automotive spare parts industry is another sector with strong growth potential, particularly as Indonesia continues to develop its electric vehicle (EV) ecosystem. The government’s initiatives to promote EV adoption, including tax incentives and infrastructure development, are encouraging domestic manufacturers to produce high-quality components for electric and hybrid vehicles. This development aligns with the broader strategy of reducing dependence on fossil fuels and transitioning towards sustainable mobility solutions. Meanwhile, the iron and steel industry is expected to benefit from increased infrastructure projects and the demand for high-quality steel products. The government’s ambitious infrastructure development plans, including the construction of new roads, bridges, and urban facilities, are driving the demand for steel. Additionally, Indonesia’s commitment to downstream processing and value-added production in the mining sector is leading to the establishment of more smelting facilities and steel production plants. Another key area of industrial growth is the downstream processing in the fisheries and agriculture sectors. As Indonesia is one of the world’s largest producers of seafood and agricultural products, there is a strong push to enhance value-added processing rather than relying solely on raw exports. The government has been encouraging investments in food processing technologies, packaging innovations, and cold storage facilities to improve product quality and shelf life. This initiative is expected to boost export revenues and create new job opportunities in rural areas. The rapid growth of these six industrial sectors reflects Indonesia’s broader economic transformation, where the country is shifting towards high-value manufacturing and technological innovation. However, several challenges must be addressed to ensure sustainable growth. These include improving infrastructure, enhancing workforce skills through vocational training and education, and creating policies that attract long-term foreign investments. Additionally, Indonesia must strengthen its regulatory framework to support industrial development while ensuring environmental sustainability. Striking a balance between economic growth and ecological responsibility is crucial, particularly in energy-intensive sectors such as steel production and semiconductor manufacturing. Overall, the potential growth of these industries presents a promising outlook for Indonesia’s economic future. With the right policies and strategic investments, the country can solidify its position as a leading industrial hub in Southeast Asia and beyond. The success of these sectors will not only drive economic expansion but also improve job creation, technological advancements, and global competitiveness in the years to come.