Indonesia’s industrial ambitions are entering a new phase. After years of expanding downstream processing, the next challenge is developing the technology, expertise, and production capabilities needed to create higher-value products domestically. Technology Investment in Indonesia is becoming increasingly relevant to this shift, as the government seeks to connect global capital and technological innovation with the practical needs of local industries. For foreign investors and international companies, this direction creates opportunities across manufacturing, energy, digital infrastructure, advanced materials, and other strategic sectors.
The direction was highlighted by Rosan Perkasa Roeslani, Chief Executive Officer of Indonesia’s sovereign investment management agency Danantara and Minister of Investment and Downstreaming, during the Danantara Technology Innovation Investment Forum (DTIIF) 2026 in Jakarta. Held from October 26 to 28, the forum brought together more than 1,500 participants, including global innovators, technology executives, research institutions, investors, scientists, and representatives of state-owned enterprises.
The central challenge discussed at the forum concerns the relationship between technology, capital, and industrial demand. Innovative technology needs a viable market, investors need projects that can be financed, and manufacturers need solutions that address actual production challenges. Bringing these elements together can help promising innovations progress from research and testing to commercial use.
This direction matters because Indonesia already has a substantial investment base. According to the Ministry of Investment and Downstreaming, national investment realization reached approximately IDR 1,539.2 trillion between January and September 2026, equivalent to 75.4% of the annual target. Downstream investment accounted for IDR 480 trillion, or around 31.2% of the total.
Those figures provide an important starting point for understanding Indonesia’s industrial development. However, overall investment and downstream investment should not be confused with technology investment itself. The figures cover broader economic activity, while the push for technology-led industrial growth reflects the next stage of development: increasing the ability to design, manufacture, improve, and commercialize higher-value products within Indonesia.
For foreign businesses evaluating the market, the opportunity lies in understanding how this industrial direction aligns with specific business activities. Establishing a manufacturing operation, supplying industrial technology, developing digital infrastructure, or partnering with a local business can involve different investment structures and regulatory requirements. Identifying those requirements early helps turn a promising market outlook into a more concrete expansion plan.
Technology Investment in Indonesia Is Moving Beyond Raw Material Processing
Downstreaming has become an important part of Indonesia’s investment strategy. The objective is to process resources domestically and capture greater economic value before products reach international markets. The next stage places greater emphasis on the technological capabilities required to move from processing raw materials to manufacturing more sophisticated products.
During DTIIF 2026, Rosan described this transition as a shift toward designing, manufacturing, and improving products for future markets. The distinction is important because a larger processing industry does not automatically translate into a stronger technological base. Long-term industrial capability also depends on research, engineering expertise, production systems, equipment, skilled workers, and the ability to improve products as market demands change.
Investment figures illustrate the scale of the underlying industrial expansion. Rosan reported that downstream investment between 2020 and September 2024 had reached approximately US$69 billion. In 2025, downstream investment exceeded US$32 billion, representing around 30% of total investment for that year. The Ministry of Investment and Downstreaming subsequently reported that downstream investment reached IDR 480 trillion during January to September 2026, accounting for approximately 31.2% of national investment realization.
The composition of downstream investment is also changing. According to the figures presented by Rosan, less than one-quarter of downstream investment was based on nickel, with the remainder spread across sectors such as bauxite, steel, plantations, forestry, and fisheries. This diversification indicates that downstreaming extends beyond a single mineral commodity and encompasses a wider range of industrial activities.
Each sector presents different opportunities for technology adoption. Mineral processing may require more efficient extraction, refining, and production systems. Agricultural and plantation industries can benefit from processing technologies that improve consistency and product quality. Fisheries businesses may need better preservation, processing, and distribution capabilities. Steel and advanced materials producers face different requirements related to manufacturing processes, material performance, and industrial efficiency.
For investors, this broader industrial base creates several possible entry points. Technology businesses can explore partnerships with manufacturers seeking solutions to specific operational problems. Equipment suppliers may find potential customers among companies expanding production capacity. Foreign manufacturers can assess whether local production or a partnership with an Indonesian company aligns with their regional strategy. Investors with expertise in industrial automation, energy management, advanced materials, or production technology may also find opportunities worth examining.
Nevertheless, the presence of a large industrial sector does not guarantee that a particular technology will be adopted successfully. Companies must establish that the technology solves a genuine operational problem, offers a commercially reasonable return, and can be integrated into existing production systems. Local technical support, spare parts, maintenance capabilities, workforce training, and reliable supply chains can influence the long-term viability of an investment as much as the initial purchase or implementation cost.
This is where the direction of Indonesian industrial policy becomes particularly relevant. A project focused solely on building capacity may generate production volume, while a project that also develops technological expertise can potentially contribute to more sophisticated industrial activities. The two approaches can complement each other, but the latter generally requires sustained cooperation between businesses, research institutions, technology providers, and investors.
Rosan identified several considerations for evaluating technology investments, including their ability to solve real industrial problems, their potential to scale in Indonesia, their contribution to domestic skills and capabilities, and their capacity to create sustainable long-term value. These criteria provide a practical framework for examining opportunities beyond headline investment figures.
For international businesses, the implication is clear. The most relevant opportunities may emerge where technological expertise meets an identifiable industrial need. A company that understands the operational challenges of its target sector can develop a more focused investment proposal, identify suitable partners, and assess the resources required to establish a lasting presence in Indonesia.
Technology Investment in Indonesia Is Expanding Across Strategic Sectors and Regions
Indonesia’s technology investment agenda covers a broader range of industries than mineral processing alone. At DTIIF 2026, Danantara identified six strategic areas for future development: energy; agriculture, food, and healthcare; advanced materials and semiconductors; transportation and infrastructure; finance and banking; and artificial intelligence, digital infrastructure, and telecommunications.
The range of these priorities reflects the different roles technology can play in the economy. Energy projects may involve clean energy systems, grid improvements, or more efficient industrial power consumption. Agriculture and food businesses may require modern processing facilities, traceability systems, and cold-chain capabilities. Healthcare can involve medical technology and supporting infrastructure, while advanced materials and semiconductors require specialized knowledge, equipment, and production ecosystems.
Digital infrastructure and artificial intelligence present another set of opportunities. Businesses in this field need to assess infrastructure availability, technical capabilities, access to customers, and the resources required to deploy solutions at scale. Financial technology and telecommunications companies face their own operational and regulatory considerations. The potential of each sector therefore depends on the specific solution, target market, investment structure, and conditions in which the technology will operate.
One important feature of Danantara’s approach is the emphasis on practical collaboration. State-owned enterprises can communicate industrial challenges and operational needs, while investors, technology companies, researchers, and innovators can propose solutions. The intended outcome is to connect innovation with real projects rather than leave promising concepts at the discussion or research stage.
This approach could create opportunities for foreign companies possessing technology that has already been developed or proven in other markets. However, successful deployment in Indonesia may require adaptation to local infrastructure, operating conditions, industry standards, and workforce capabilities. A solution that performs well elsewhere may still need technical adjustments, local testing, or a different commercial arrangement before it becomes viable in the Indonesian market.
Regional distribution is another relevant consideration. Rosan reported that 78% of downstream investment was located outside Java, highlighting the geographic dimension of Indonesia’s industrial development. This was a figure specifically associated with downstream investment in the forum’s presentation, rather than a measure of all technology investment across the country.
Investment beyond Java can create reasons to evaluate manufacturing locations, resource-processing centers, industrial estates, and regional supply chains outside the country’s largest commercial hubs. Yet location decisions require careful assessment. Transport connections, power availability, industrial land, supplier access, workforce skills, and proximity to customers can differ substantially between regions.
For a technology company, the ideal location may depend on the nature of the business. An equipment manufacturer may prioritize access to industrial customers and logistics networks. A resource-processing project may need to be close to its raw materials and supporting infrastructure. A digital infrastructure company may place greater emphasis on connectivity, electricity reliability, and proximity to users. A regional office supporting industrial clients may require a different footprint from a production facility.
Consequently, national investment growth should be treated as a signal for further market assessment, rather than evidence that every sector or location offers the same potential. Investors need to compare specific business opportunities, estimate costs, assess demand, and understand the infrastructure available before committing significant resources.
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The same approach applies to partnerships. Access to local customers, technical expertise, distribution networks, and industrial facilities can influence the success of a project. Foreign businesses may need to determine whether independent establishment, a joint venture, a supply agreement, or another commercial arrangement is suitable for the intended activities. The appropriate structure depends on commercial objectives and the regulatory conditions governing the proposed business.
A more technology-oriented industrial economy ultimately requires cooperation across the value chain. Research and innovation need access to production and commercial markets, while manufacturers need reliable solutions and investors need a credible route toward returns. Companies able to identify where these needs intersect may be better positioned to evaluate opportunities emerging from Indonesia’s industrial transformation.
Technology Investment in Indonesia Requires Regulatory Readiness and a Strong Business Foundation
Technology and capital can attract attention, but the practical work of establishing and operating a business remains an essential part of investment planning. Company structure, business classification, licensing, taxation, workforce arrangements, and operational requirements must align with the activities a company intends to carry out in Indonesia.
The government has signaled an intention to reduce unnecessary administrative obstacles for credible technology projects. During DTIIF 2026, Minister of Higher Education, Science, and Technology Brian Yuliarto said President Prabowo Subianto had instructed the cabinet to simplify procedures and remove unnecessary bureaucratic barriers so innovators could concentrate on developing technology and building businesses.
The policy direction is relevant to investors because administrative uncertainty can affect project preparation, coordination, and implementation. Technology projects may involve several parties, including international technology providers, investors, research institutions, manufacturers, and government bodies. Clearer processes and more effective coordination can help these parties move from initial proposals toward practical execution.
However, the stated intention to simplify bureaucracy should not be interpreted as a blanket exemption from licensing or compliance requirements. Companies still need to determine which regulations apply to their activities and obtain the relevant approvals. The exact requirements may vary according to the business classification, risk level, sector, location, ownership structure, and other circumstances.
For foreign investors, the initial question is often whether the proposed activity can be undertaken through the intended company structure. A foreign-owned limited liability company, commonly known as a PT PMA, may be an appropriate route for eligible investment activities. The relevant foreign investment conditions, business classifications, ownership restrictions where applicable, and licensing requirements should be evaluated before the investment structure is finalized.
Choosing the right Indonesian Standard Business Field Classification, known as KBLI, is another important step. The selected classification should accurately reflect the company’s intended activities. A company that develops industrial software, manufactures equipment, imports machinery, or operates a production facility may face different registration and licensing requirements, even when all activities support the same broader technology project.
This distinction becomes particularly important when a company plans to expand its business activities. An entity initially established for trading or distribution may later seek to manufacture products or provide additional services. Such changes can introduce new licensing, tax, operational, and reporting considerations. Reviewing the proposed business model before establishment can help reduce the need for corrective changes later.
The role of taxation and financial administration also becomes more significant once investment moves into the operational stage. Companies need to establish appropriate accounting practices, record transactions, manage applicable tax obligations, and prepare required reporting. Projects involving related companies across borders may also need to assess transfer pricing considerations and other relevant tax requirements, depending on their transactions and structure.
Technology investments frequently involve imported machinery, specialized equipment, components, or other materials. In such cases, import procedures, customs requirements, product documentation, and the allocation of responsibilities between suppliers and local entities should be considered during project preparation. Import arrangements need to correspond with the actual transaction and the parties involved.
Workforce requirements deserve similar attention. A project may need engineers, technical specialists, researchers, production personnel, or management staff with particular expertise. Recruitment planning needs to reflect the skills available locally, the timing of the project, and the training required for implementation. Where foreign professionals are assigned to Indonesia, visa and stay permit requirements must match the purpose and activities of their presence.
These considerations demonstrate why investment preparation needs to cover more than incorporation alone. The company must be structured to carry out its planned activities, obtain the relevant permissions, manage its financial obligations, and organize the workforce and supply arrangements required for operations. Each element affects the project’s ability to proceed according to its commercial plan.
Bizindo supports foreign and local businesses with several of these requirements. Company Establishment services can assist eligible investors with establishing a suitable business entity, including a PT PMA where appropriate. Business Licensing and KBLI consultation can help companies identify the relevant business classifications and licensing considerations for their intended activities.
For companies moving toward operational activities, Accounting and Tax Reporting services can support financial administration and applicable tax compliance. Importer of Record services may also be relevant for businesses that need support with importing equipment, products, or other goods into Indonesia, depending on the transaction and applicable requirements.
Recruitment and Employer of Record services can support businesses developing their workforce and employee administration arrangements. Immigration Services can assist with relevant visa and stay permit requirements for foreign professionals, while Expat Relocation services can support the practical arrangements associated with moving personnel to Indonesia.
The appropriate combination of services depends on the nature of the investment. A technology startup, a manufacturing company, an industrial equipment supplier, and a large-scale downstream project will not necessarily require the same support. The objective is to align the relevant business services with the activities, structure, and obligations of the company.
For investors exploring Technology Investment in Indonesia, the direction of industrial policy offers a reason to examine the market carefully. Downstream investment is expanding, the government is emphasizing technology adoption and domestic industrial capabilities, and Danantara is seeking to connect innovators with projects that address real industry needs. Translating these developments into a viable investment still requires commercial analysis, appropriate partners, realistic financial planning, and preparation for the applicable regulations.
Bizindo can help businesses prepare the administrative foundations behind their investment plans, from company establishment and business licensing to accounting, tax reporting, import support, recruitment, and immigration services. For companies considering an entry into Indonesia or planning to expand existing operations, identifying the relevant requirements early can make the transition from investment planning to business implementation more structured.
Contact Bizindo to discuss the business setup and operational support relevant to a planned technology or industrial investment in Indonesia. With the right business structure, clear licensing requirements, and well-organized administration, investors can prepare more effectively to pursue opportunities in Indonesia’s evolving industrial landscape.
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