Top Business Sectors in Indonesia in 2024
As we embark on the promising journey of 2024, Indonesia stands as a beacon of economic opportunity in Southeast Asia. The nation’s dynamic and evolving business landscape tells a compelling story of growth and innovation. Indonesia’s economy exhibited robust growth, expanding by 5.04% in the year ending September 2023, showcasing its resilience and attractiveness for both local and international investors.
In this detailed exploration, MAM Corporate Solutions delves into the top business sectors anticipated to shape Indonesia’s economic trajectory in 2024.
Fintech & Ecommerce: Pioneering the Digital Frontier
In the digital age, Fintech and Ecommerce have become integral components of Indonesia’s economic ecosystem. A burgeoning middle class, coupled with increasing internet penetration, positions this sector for remarkable growth placing fintech as one of the top business sectors in Indonesia in 2024.
The number of fintech players in Indonesia increased six-fold over the last decade, rising from just 51 active players in 2011 to 334 in 2022. Customer engagement with fintech offerings continues to surge, with the payment segment boasting over 60 million active users and expected to grow at a rate of 26% annually between 2020 and 2025.
The fintech journey in Indonesia began with a focus on facilitating online payments responding to the rise of online transactions and tech companies. As part of the evolution to digitize cash transactions, several players started offering e-money in e-wallets, including GoTo’s GoPay, OVO, and other players. This digital transformation not only enhances convenience for consumers but also provides new avenues for businesses to reach and serve their customers.
The growth of Ecommerce has been equally remarkable and it is also one of the top business sectors in Indonesia in 2024. The increasing preference for online shopping and the convenience it offers have fueled the expansion of Ecommerce platforms. Major players such as Tokopedia, Shopee, and Bukalapak have become household names, providing a wide array of products and services.
The sector’s contribution to Indonesia’s GDP is expected to see significant growth, aligning with the global trend of increased reliance on digital platforms for commerce.
Tourism: Indonesia's Cultural Tapestry Unveiled
Indonesia’s breathtaking landscapes and rich cultural heritage make it a premier tourist destination. As global travel rebounds, projections indicate increase in tourist arrivals, translating into substantial economic contributions.
Minister of Tourism and Creative Economy, Sandiaga Uno, is optimistic about the future of Indonesia’s tourism sector, anticipating a positive outlook for 2024 with a target of welcoming 14 million foreign tourists making it yet another one of top business sectors in Indonesia in 2024.
The tourism sector extends beyond traditional attractions. The Indonesian government has been investing in the development of diverse tourism offerings, including eco-tourism initiatives, cultural experiences, and sustainable practices.
This strategic approach aims not only to attract a higher number of tourists but also to encourage longer stays and increased spending, thereby maximizing the economic impact of tourism on local communities.
One of the main objectives of attracting tourist is also to boost the foreign investment in Indonesia. Many tourists decide to establish Foreign Investment Company (PT PMA) in Indonesia specifically in cities like Bali, Jakarta, and Surabaya. This tourism also has direct impact on the Partnerships between the public and private sectors are crucial in achieving sustainable growth in the tourism industry.
Collaborative efforts can lead to the development of infrastructure, preservation of cultural heritage, and implementation of responsible tourism practices. Indonesia’s commitment to fostering a positive and memorable experience for tourists aligns with global trends emphasizing sustainable and responsible travel.
Transportation: Navigating Growth with Connectivity
Efficient transportation networks are the lifelines of any thriving economy. Indonesia recognizes this importance, and in 2024, the transportation sector is positioned to flourish. Investments in infrastructure are set to increase ensuring the development of modern transportation systems. Enhanced connectivity through road, rail, and maritime networks not only facilitates domestic trade but also strengthens Indonesia’s position as a key player in the global supply chain.
The development of transportation infrastructure is a multi-faceted initiative that involves upgrading existing facilities and creating new modes of transport. Improvements in road networks facilitate the movement of goods and people, contributing to economic growth and regional development. Rail projects, such as high-speed rail initiatives, enhance connectivity between major cities, fostering efficient and rapid transit.
Maritime connectivity is equally crucial for an archipelagic nation like Indonesia. Ports play a pivotal role in facilitating international trade, and strategic investments in port infrastructure ensure that Indonesia remains a key player in the global shipping industry. The transportation sector’s growth not only enhances economic activities but also contributes to job creation and improved quality of life for citizens.
Renewable Energy: Powering Sustainable Futures
In alignment with global efforts towards sustainability, Indonesia is placing a significant emphasis on renewable energy. To meet the growing energy demand, the government has set ambitious sustainability targets and pledged to meet net zero emissions by 2060 or earlier.
The shift toward renewable energy sources is a response to the environmental challenges posed by traditional energy sources. Indonesia’s commitment to clean energy aligns with global efforts to combat climate change and reduce dependence on fossil fuels. Investments in solar, wind, and hydroelectric power projects not only contribute to environmental conservation but also enhance energy security by diversifying the energy mix.
The renewable energy sector presents significant opportunities for innovation, research, and development. Collaboration between the government, private sector, and international partners can drive advancements in renewable energy technologies and contribute to the establishment of a sustainable energy ecosystem. Indonesia’s commitment to a green and sustainable future position the country as a leader in the global transition to clean energy and this sector as another one of top business sectors in Indonesia in 2024.
Education and Healthcare: Building Human Capital and Well-being
Investments in education and healthcare are fundamental indicators of a nation’s commitment to its citizens’ well-being. In 2024, Indonesia’s focus on these critical sectors is anticipated to foster societal development and contribute to a healthier and more educated population. The government plans to allocate a health budget of Rp 186.4 trillion or 5.6 percent of the State Revenue and Expenditure Budget in 2024. This amount is an increase of 8.1 percent compared to the budget in 2023. The use of the health budget is encouraged to be fairer.
The education sector is undergoing transformative changes with advancements in technology and innovative learning approaches. The integration of digital tools and online platforms enhances access to education, especially in remote areas. The emphasis on quality education prepares the workforce for the challenges of the future, fostering a culture of continuous learning and skill development.
In the healthcare sector, Indonesia faces opportunities and challenges. While the government has allocated a substantial budget to strengthen the healthcare system, there is a significant difference in healthcare spending compared to neighbouring nations. According to Indonesia’s Minister of Health Budi Gunadi Sadikin, this discrepancy amounts to an enormous US$81 billion investment opportunity set to unfold over the next five years in Indonesia’s healthcare sector.
The healthcare investment opportunity extends beyond infrastructure development to include advancements in medical research, technology, and healthcare services. Collaboration between public and private entities can bridge the gap in healthcare spending, ensuring that Indonesians receive quality healthcare services comparable to global standards.
How MAM Corporate Solutions can assist
As market-entry and business consulting firm based in Jakarta with significant experience in assisting overseas clients from countries like USA, Singapore, China, Malaysia, India and other European countries, MAM Corporate Solutions understands the intricacies of setting up business in Indonesia. MAM Corporate Solutions is poised to be your trusted partner in navigating the intricate landscape of the Indonesian market. With expertise in Employer-of-Record (EOR), Accounting, Tax, Payroll, Immigration and Company Incorporation services, and comprehensive business consulting, we offer tailored solutions to foreign businesses.
Take the Next Step!
As you now know the top business sectors in Indonesia in 2024, explore the opportunities Indonesia has to offer and let MAM Corporate Solutions guide you on your journey to success in the vibrant Indonesian market. Click here to contact us or fill the form below to reach out to us. Whether you are looking to establish a new venture or expand your existing business, our team is ready to assist you at every step.