Indonesia's Ministry of Industry is strengthening the national startup ecosystem as part of its strategy to accelerate the digital transformation of the manufacturing sector through technology and innovation.

The initiative aims to provide digital solutions that improve productivity, efficiency, and the competitiveness of Indonesia's industries in the global market. (06/08)

Through the Directorate General of Small, Medium, and Miscellaneous Industries (IKMA), the ministry has continued to support startups through the Startup For Industry (SFI) program since 2018.

The SFI ecosystem currently includes 2,577 startup profiles, with 1,740 startups, or 67.5%, based on technology, including 640 startups focused on hardware-adjacent technologies such as IoT, robotics, artificial intelligence (AI), and 3D printing.

Ministry of Industry Highlights the Strategic Role of Industrial Startups

Minister of Industry Agus Gumiwang Kartasasmita said the development of industrial startups is an important part of implementing the National Industrialization Grand Strategy (SBIN).

The strategy is intended to strengthen Indonesia's industrial structure, accelerate digital transformation, and increase national economic value.

"Indonesia not only needs more startups, but startups that can solve real problems in the industrial sector. Startups must become strategic partners for national industries in improving productivity, efficiency, and competitiveness so they can generate quality economic growth," Agus said during the official launch of the Indo Startup Expo and Forum 2026 in Jakarta.

According to Agus, Indonesia has significant potential to become a startup growth center in the region.

Based on Startup Ranking, Indonesia is currently ranked sixth globally with more than 3,100 active startups, making it the country with the largest number of startups in Southeast Asia.

However, he said the quality of Indonesia's startup ecosystem still needs to be strengthened.

Based on the Global Startup Ecosystem Index 2026, Indonesia ranks 45th globally in startup ecosystem quality.

"Our potential is enormous, but our task is to improve the quality of startups so they can survive, grow, obtain funding, and become part of national and global industrial supply chains," he said.

Manufacturing Growth Supports Technology-Based Innovation

Agus said the current growth of Indonesia's manufacturing industry should be used to accelerate technology-based innovation.

In the second quarter of 2026, the non-oil and gas manufacturing industry grew 5.32% year-on-year, exceeding Indonesia's overall economic growth while remaining the country's largest contributor to the economy.

The manufacturing sector also accounted for 39.7% of Indonesia's total investment realization, employed more than 20 million workers, and contributed around 82% of total national exports, valued at USD115.5 billion, during the first half of 2026.

According to Agus, this performance should be accompanied by stronger innovation to support sustainable industrial growth.

"Industrial growth must be accompanied by increased productivity and innovation. This is where startups have a strategic role as providers of technology solutions that meet industrial needs from upstream to downstream," he said.

Government Encourages Stronger Startup Quality and Industry Collaboration

Agus also highlighted funding challenges facing Indonesian startups. The Indonesia Startup Report 2026 recorded startup funding of around USD355 million throughout 2025, a decline compared with the previous year, while global startup funding continued to increase.

According to Agus, the situation shows that the main challenge is not limited global capital, but the need to improve startup quality so they are better prepared to attract investment.

"Global capital is not scarce. What is needed are startups that can demonstrate strong business models, provide solutions required by industry, and offer clear growth prospects," he said.

He added that Indonesia also has a large domestic market.

Data from Statistics Indonesia (BPS) shows there are around 4.43 million small and medium industries (IKM) that could become users of technology solutions developed by startups.

"For technology startups, these millions of small and medium industries represent a very large market opportunity. The government's task is to connect industrial needs with solutions developed by startups to create an ecosystem that strengthens both sides," Agus said.

Indo Startup Expo 2026 and Global Technology Partnership

To strengthen the startup ecosystem, the Ministry of Industry, together with ministries, government agencies, associations, industry players, investors, and startup communities, will hold the Indo Startup Expo and Forum 2026 on November 5–7, 2026, at the Indonesia Convention Exhibition (ICE) BSD in Tangerang.

The event will feature investment forums, business matching, a startup leaders forum, seminars, awards, demo days, and collaboration programs that bring together startups, industry, investors, regulators, and the market.

"I hope the Indo Startup Expo and Forum will become not only an exhibition, but also a platform for business transactions, investment collaboration, technology transfer, and sustainable partnerships between startups and national industries," Agus said.

During the event, the Directorate General of IKMA signed a cooperation agreement with Infineon Technologies Asia Pacific to support the development of technology-based startups and strengthen Indonesia's national semiconductor ecosystem.

Acting Director General of IKMA Adie Rochmanto Pandiangan said the partnership is expected to accelerate technology transfer, improve human resource capabilities, and expand Indonesian startups' access to global supply chains.

In addition, the Directorate General of IKMA and PT Dayakrea Mega Pradana will continue strengthening the implementation of the Indo Startup Expo and Forum as a collaboration platform for stakeholders, including strengthening the Startup for Industry Indonesia Association (Starfindo), which has partnered with the government in developing industrial startups.

"We want to build a stronger industrial startup ecosystem so Indonesia becomes not only a technology market, but also a place where innovation and technology solutions are created to strengthen national industry and compete globally," Agus concluded.

PHOTO: MINISTRY OF INDUSTRY

This article was created with AI assistance.

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