Downstreaming, MSMEs, and National Strategic Projects Become the Locomotives of Job Creation
By: Rizky Adi Pratama *)
Job creation remains a central issue on the national development agenda, particularly amidst global challenges that demand stronger and more sustainable economic competitiveness. The government under President Prabowo Subianto has demonstrated a consistent policy direction by positioning industrial downstreaming, strengthening MSMEs, and accelerating National Strategic Projects (PSN) as the three main pillars of expanding employment opportunities. These three pillars are not mutually reinforcing, but rather mutually reinforcing, building the foundation of a productive and inclusive economy.
This direction is reflected in the President’s emphasis on the crucial role of higher education in supporting strategic investment and national downstreaming. The Indonesian Industrial Estates Association (HKI) views this policy as a crucial step to ensure that downstreaming projects not only generate added economic value but also create widespread and sustainable employment. HKI Chairman Akhmad Ma’ruf Maulana views the support of universities for 18 strategic downstreaming projects managed by Danantara as a signal that future industrial development will be increasingly structured and based on human resource readiness.
According to HKI, these downstream projects have significant potential for absorbing labor, both during the construction phase and once the industry begins operating. Furthermore, downstreaming encourages the creation of a deeper industrial ecosystem, encompassing applied research, technological innovation, and local talent development. With this approach, investment goes beyond physical development and continues toward strengthening national capacity, which can support long-term growth.
Danantara’s presence as a strategic investment management body is seen as accelerating the realization of downstream projects through more targeted financing support. Within the framework of job creation, industrial estates play a key role, ensuring projects can proceed quickly through land preparation, utilities, and service assurance. Akhmad Ma’ruf Maulana emphasized that the relationship between Danantara and industrial estates is complementary, where financing and a strategic project portfolio meet site readiness and an integrated business ecosystem. This synergy accelerates inward investment and creates large-scale job opportunities.
At the same time, the government has not ignored the role of MSMEs as the backbone of national job creation. Strengthening MSMEs, particularly those led by women, is seen as a strategy to ensure inclusive economic growth. International cooperation with the Government of Canada is a concrete example of how the national agenda is strengthened through global collaboration. Funding support of over 22 million Canadian dollars for five MSME strengthening initiatives in Indonesia is aimed at increasing business capacity, competitiveness, and the ability to absorb labor.
The Indonesian government views this collaboration as part of strengthening the MSME ecosystem as a whole, from access to financing and skills development to the use of sustainability-oriented technology. During a visit to Jakarta, Canadian Junior Minister for International Development Randeep Sarai stated that the support is aimed at strengthening the economic partnership between the two countries. For Indonesia, this collaboration aligns with the national agenda of encouraging MSMEs to upgrade, expand export markets, and ultimately create new jobs, particularly in the processed food sector.
Programs such as Climate Resilient Agri-Food Trade Promotion Support (CRAFTS) and Economic Linkages for Enhanced Value, Trade, and Exports (ELEVaTE) demonstrate how strengthening the capacity of MSMEs directly contributes to employment. As MSMEs become more productive and connected to global markets, increased production becomes inevitable, and the need for labor grows. This approach emphasizes that job creation does not always have to rely on large industries but can also arise from systematically strengthened small businesses.
In addition to downstreaming and MSMEs, the government has also demonstrated a strong commitment to job creation by accelerating the National Strategic Project (PSN). The development of Integrated Energy Infrastructure at the Balikpapan Refinery is a concrete example of how a national project has a direct impact on employment and the regional economy. During the construction phase, the project, run by PT Pertamina (Persero), has employed tens of thousands of workers, mostly from within the country, while simultaneously stimulating economic activity in the surrounding community.
The benefits of the National Project (PSN) extend beyond job creation. The presence of thousands of workers has boosted the growth of local businesses, particularly MSMEs, around the project. The stories of small business owners in Balikpapan demonstrate that national projects can create a multiplier effect directly felt by the community. Pertamina’s Vice President of Corporate Communications, Muhammad Baron, emphasized that the Balikpapan Refinery PSN is designed to provide broad economic benefits, not only during construction but also during the operational phase, which is projected to directly involve thousands of workers.
The government’s policies to encourage downstreaming, strengthen MSMEs, and accelerate the National Strategic Project (PSN) demonstrate a comprehensive development approach to job creation. The synergy between strategic investment, human resource preparedness, and local economic strengthening creates a sustainable growth cycle. With consistent policy direction and cross-sector collaboration, the job creation agenda is not merely a short-term target but a solid foundation for future national economic resilience.
*) Public Policy Observer
