Investment Growth: What Are Indonesia’s Biggest Investment Industries?
When thinking about the future, investing is something to consider as a backup plan if financial plans do not work out. Many countries have successful economies, but it is Indonesia that has an abundance of successful industries with high levels of investment because it has one of the highest levels of economic growth in South Asia.
Indonesia’s investment potential extends beyond its economic growth, its population of over 275 million means it has a large regional market to invest in, and it has natural resources, including palm oil and minerals which can be very lucrative, as Indonesia can sell them to other countries or offer companies the chance to invest in these markets.
Apart from Indonesia’s natural resources, the country has been developing its digital market with the ongoing growth of financial service companies, telecommunication companies, and Indonesian tech start-ups. The growth of Indonesia’s investment expands past digital services and into digital entertainment, thanks to people continuing to use smartphones and having an obsession with the internet.
As Indonesia continues to grow its digital markets, digital markets worldwide reflect similar trends and changes. Digital entertainment has grown spectacularly and the expansion has created the rise of digital platforms in online gambling.
The rise of online poker platforms like Ignition Online Poker is part of a broader trend in the digitalization of traditional card games. Poker, a game with a rich history dating back to the 19th century, has found new life in the digital age across the globe. Online poker rooms offer players the convenience of enjoying the game from the comfort of their homes, with options ranging from casual play to high-stakes tournaments. These platforms typically provide various poker variants such as Texas Hold'em, Omaha, and Seven-Card Stud, catering to different player preferences.
The popularity of online poker has been driven by several factors, including increased accessibility, the ability to play multiple tables simultaneously, and the option to participate in games with players from around the world. And while the iGaming sector is thriving with digital card games, Indonesia’s primary industry investments focus on other areas, some that may be obvious and some that might surprise you.
1. Mining
Indonesia’s mining industry is booming because of its natural resources. Many mineral deposits exist in Indonesia and the country exports millions of natural materials like copper every year. Primarily, investment in Indonesia's mining industry is foreign, as they export a lot of natural resources to countries across the world, and in 2022, mining contributed about 9 percent to Indonesia’s GDP.
Investments in mining natural resources are driven by the demand to use natural resources to create energy. Indonesia is lucky because it is in a prime location between two oceans, which opens it up to a world of possibilities when trading resources with other Asian countries.
2. Manufacturing
The manufacturing industry in Indonesia makes a substantial amount of money. Indonesia loves to be on top of manufacturing, as it manufactures everything from textiles, food, and beverages, to electronics. The Japanese and the Indonesians have had a working relationship for years in trade and investment, allowing the growth of some of Indonesia’s industries.
The Japanese have dominated Indonesia's automotive industry. The Japanese have exported their cars to Indonesia and have been able to take over the market by manufacturing there. Indonesia in return makes money from the Japanese car exports to other countries because in Indonesia they are cheap to manufacture and are sold for profit.
3. Agriculture
The agricultural business is responsible for a lot of the employment of Indonesia’s workforce as exports from Indonesia, like coffee and rice are so in demand. Because of this, investment in Indonesia's agricultural industry is constant to keep up with supply and demand.
There is no doubt Indonesia makes a lot from exporting its food and its agriculture. The biggest reason there is so much investment in the agricultural industry is because of worries around food production. Indonesia needs investment in agriculture to make sure enough food is mass-produced for Indonesia’s huge population. Sustainable farming practices have been encouraged by some companies via investment in schemes and initiatives.
4. E-commerce
E-commerce in Indonesia has grown because of more people using the Internet. E-commerce platforms in Indonesia have been developed, the biggest platform being worth over $1 billion. The name of the e-commerce company and Indonesia's biggest e-commerce platform is Tokopedia. Tokopedia did recently have one huge investor, TikTok, who invested a staggering $1.5 billion into the company when TikTok Shop shut down in Indonesia.
The appeal of investing in e-commerce platforms in Indonesia is that they have so many users and are not likely to lose business soon. However, the record number of smartphone and internet users has driven the need for e-commerce products and services, which have a greater impact on investment than anything else.
5. Tourism
Indonesia’s tourism industry was revitalized by a renewed interest in some of its destinations. Investment in Indonesia’s tourism industry has increased because places like Bali and Jakarta appear attractive to tourists.
Bali arguably has saved Indonesia’s tourism industry because of how it’s been popularized by travel bloggers on social media praising it for its beauty and low prices. They want to invest in the tourism industry for one reason - to create a new Bali. Investment in luxury resorts is already happening in Indonesia. If the right tourism destination is picked by development companies when building in Indonesia, it might attract more foreign investors.
Future of Investment in Indonesia
The future of investment in Indonesia will depend on whether economic growth stays steady. Agriculture could have a downturn if there is a drought, and tourism investment could decrease in the case of inflation or a recession, but with the way the economy is now in Indonesia, that is highly unlikely. Having the largest economy in Southeast Asia is hopeful when it comes to the future pf investment and the growth of industry.
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