By: Salsa Nadya Sintya
Industrial downstreaming is now a national strategy to strengthen Indonesia’s economic foundations while creating quality and sustainable jobs. This program not only adds value to domestic products but also ensures an integrated industrial value chain, from upstream to downstream, thus creating an ecosystem that supports long-term economic growth. This commitment is clearly evident in President Prabowo Subianto’s directive, which places downstreaming as a national priority, including through 18 strategic projects managed by the strategic investment management agency, Danantara.
The Indonesian Industrial Estate Association (HKI) considers this step a crucial foundation for national industrial development. HKI Chairman Akhmad Ma’ruf Maulana emphasized that the involvement of universities in supporting downstream projects is crucial for ensuring the availability of a skilled, creative, and innovative workforce. Therefore, downstream projects should not only focus on macroeconomic growth but also strengthen the human resources that will form the backbone of future industries. According to Ma’ruf, the success of downstream projects will create a mutually reinforcing cycle of growth; as investment grows, the economy grows, and jobs are created, the national industrial ecosystem becomes more competitive.
Furthermore, labor-intensive industries such as textiles and garments play a strategic role in job creation. The Indonesian Garment and Textile Association (AGTI) appreciates the government’s attention to this sector, as it is a key pillar of the national economy and maintains social stability in various regions. AGTI Chairwoman Anne Patricia Sutanto emphasized that strengthening the downstream sector will increase the added value of domestic products while expanding formal employment opportunities. This is crucial considering that the textile sector employs thousands of workers and is one of the pillars of labor-intensive industries in Indonesia.
Strengthening the supply chain is a key factor in ensuring maximum benefits for downstream processing. The long industrial supply chain structure requires integrated policies, from upstream to downstream, to enable the national industry to increase its competitiveness and reduce dependence on imported products. While raw material imports are still necessary to maintain smooth production, AGTI emphasizes that this process must be efficient and compliant with regulations to maintain industrial competitiveness. Furthermore, mastering technology and developing the domestic machinery industry are also crucial steps to encourage the implementation of Industry 4.0, increase productivity, and improve the quality of the workforce.
Industrial estates serve as execution hubs, ensuring the effective implementation of downstream projects. Land readiness, adequate utilities, service assurance, and an integrated industrial ecosystem are key factors in accelerating investment realization. Ma’ruf explained that the synergy between Danantara and industrial estates is complementary; Danantara strengthens the financing and strategic project portfolio, while industrial estates ensure site readiness and a business ecosystem. This provides investors with greater certainty, and the economic impact on communities can be felt tangibly.
Downstreaming also encourages integration between industry and higher education. HKI has signed a memorandum of understanding with the Ministry of Higher Education, Science, and Technology and the Ministry of Investment and Downstreaming/BKPM, enabling industrial estates to become real laboratories for applied research and talent development. This step is believed to be able to bridge industry needs by providing a skilled workforce, while also providing practical experience for university graduates so they are ready to enter the workforce with relevant competencies.
Successful downstreaming will strengthen the national industrial structure, increase strategic investment, and create quality formal jobs. Labor-intensive industries such as textiles and garments are driving forces for the local economy, maintaining social stability, and promoting equitable development. With integrated policy support from the central and regional governments, facilitation of licensing, energy availability, and targeted financing, the downstreaming agenda will be a key driver towards an Advanced Indonesia.
Downstreaming is not just an economic strategy, but also an answer to the challenges of modern employment. With growing investment, adopted technology, and skilled human resources, Indonesia is ready to face global competition while providing tangible benefits to society. Synergy between the government, project management agencies, the business community, and higher education is key to Indonesia’s ability to create quality jobs, increase the competitiveness of the national industry, and make downstreaming a long-term solution for sustainable economic growth.
With a consistent focus, downstreaming will transform Indonesia from a raw material producer to a global player offering high-value products, absorbing a large workforce, and strengthening economic stability. This program demonstrates that sustainable industrial development not only boosts economic growth but also addresses employment challenges and equitable distribution of social welfare. Therefore, downstreaming is the right strategy for creating a more advanced, independent, and prosperous Indonesia for all its people.
*The author is a researcher at the Indonesia Sentris Institute
