Kiki Verico, an economist from the Institute for Economic and Social Research at the University of Indonesia (LPEM UI), has highlighted several steps to stimulate the growth of the manufacturing industry in the country. One key approach is the enhancement of the quality of the manufacturing workforce, emphasizing the need to uplift the skills of the workforce. Currently, a significant proportion, around 90%, of Indonesia's manufacturing human resources are categorized as unskilled. Kiki stressed the importance of investing in skill development and even suggested that investment should precede skill enhancement.
Another focal point for driving industrial growth, according to Kiki, is to transform Indonesia into a green production base. This entails adopting an eco-friendly approach and aligning with the global trend of green and environmentally conscious production. Kiki emphasized that products now need to be environmentally friendly to effectively enter global markets. To this end, the orientation towards green production and sustainable practices should be inherent in efforts to promote manufacturing.
Kiki also highlighted the necessity of inclusive economic policies that support both large investments and small-scale creative entrepreneurial endeavors, such as digitally-based manufacturing ventures. He pointed out that identifying close production partners and high-value products should be a priority. From his analysis, countries like Vietnam, the Philippines, and Pakistan could serve as production networks for Indonesia, while South Korea and Australia could be potential investment partners. Kiki emphasized the significance of strong collaboration with Vietnam, particularly in industries such as battery manufacturing for electric vehicles (EVs), indicating the potential for future growth. Indonesia is targeting a growth rate of 6.4% for the non-oil and gas manufacturing sector and aims for manufacturing to contribute around 19.2% to the GDP by 2025.
