Insight

Indonesia's Labor-Intensive Industries Are Struggling

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Algo Research Team

Economics | Mar 07, 2025 | Views: 375

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Key Summary:

  • Labor-intensive and manufacturing sectors in need of stimulus
  • Since 2019, policy focus has shifted towards capital-intensive industries
  • But, they do not absorb many employment compared to labor-intensive

Reports of mass layoffs and factory closures in Indonesia have recently dominated the news, highlighting growing concerns, especially in the country’s labor-intensive industries.


Context: Indonesia’s economy used to rely on labor-intensive industries as one of the main sources of growth and employment, especially within the manufacturing sector.

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