Industrial Policy Lab Indonesia was founded to advocate for Indonesia’s reindustrialization. Since the start of the millennium, the country’s industrial base has steadily thinned, weakening the economy’s ability to generate decent jobs and durable sources of growth. In its place, Indonesia has leaned more heavily on commodities as a driver of growth. While this growth model can deliver windfalls in boom years, it is becoming less reliable in a world increasingly shaped by decarbonization imperatives and geopolitical competition.

Reindustrialization is therefore central to the three strategic challenges that Indonesia now faces: 1) raising broad-based prosperity through decent jobs at scale, 2) accelerating decarbonization by building the capabilities required for a low-carbon economy, and 3) navigating a more volatile global environment in which supply chains and strategic industries are increasingly contested. Rebuilding industrial capacity is how Indonesia secures its place in the global economy and strengthens the resilience needed to withstand shocks in an uncertain world. In our view, a prosperous, green, and sovereign Indonesia is made possible only by the development of industrial Indonesia.

To address these challenges, we believe that the strategic, prudent, and judicious use of industrial policy is essential. The state has a legitimate role in shaping the structure of the economy, and without which Indonesia risks remaining locked in a low-productivity, commodity-dependent trajectory. Building capabilities in sectors that generate productive jobs, innovation, and sustainable supply chains will be imperative. And across advanced and emerging economies, industrial policy has returned to the mainstream, driven by the energy transition, supply-chain security, and intensified geopolitical competition. The terms of the debate have shifted: from whether industrial policy should be used to how to do it well with disciplined implementation and accountability.

Industrial Policy Lab Indonesia aims to help Indonesia make that shift. We work to mainstream a strategic and evidence-based approach to industrial policy in policymaking, public debate, and academic discourse. We believe policy choices should be guided by analysis rather than ideology, and judged by measurable outcomes rather than expedient narratives. We conduct rigorous and policy-relevant research on industrialization. In pursuing our research agenda, we focus, among others, on how capabilities are built, how coordination failures are solved, how finance is mobilized, and how firms learn and upgrade. We are also interested in the problem of how societies redistribute gains while managing the frictions of structural transformation. We treat empirical evidence as an explicit operating principle: approaching key research questions with transparent assumptions, testable claims, and a willingness to revise views when facts change.

We operate at both the macro and sectoral levels by linking economy-wide institutions and outcomes to capability-building in specific industries, technologies, and value chains. We focus on the design details that determine whether policy works. We identify which sectors and technologies matter, diagnose where Indonesia sits in each value chain, and specify what must change—rules, incentives, institutions, and delivery capacity—for execution to be credible. In practice, this means sectoral diagnostics with actionable recommendations. Our diagnostics covers, among others, binding constraints, cost structures, firm capabilities, input bottlenecks, infrastructure and logistics needs, financing frictions, and export pathways. Our in-depth focus is built upon the strong belief that industrial policy should be actionable rather than aspirational.

We are also multidisciplinary by necessity. Industrialization is simultaneously a technological challenge, an investment and financing problem, and an institutional and political economy task. No single lens is sufficient. We integrate engineering and the sciences with economics, finance, political economy, sociology, and law to reflect how capabilities are built in practice, across firms, supply chains, and regulatory systems.

Ultimately, Industrial Policy Lab Indonesia seeks to support Indonesia’s reindustrialization not as an end in itself, but rather what reindustrialization makes possible: productive jobs and rising real incomes, a green transition compatible with climate constraints, and an Indonesia resilient enough to chart its own course in an uncertain world.