Agglomeration and Manufacturing Activities in Indonesia

The importance of the agglomeration process in facilitating growth and productivity increases in Indonesia's manufacturing sector cannot be ignored. The agglomeration process is associated with improved productivity as firms enjoy external benefits from either urbanization or from the sharing of inputs available in certain locations. Evidence suggests that Java remains the main corridor for manufacturing activities, with large cities attracting manufacturers that are looking for externalities from urbanization. However, there are signs that some firms are shifting to new locations in other cities and forming new agglomerations in areas that these firms find more favorable. With regional autonomy, issues relating to local governance, infrastructure, and uncertainties in local regulations are increasingly important and can undermine the process of agglomeration. Some programs promoting certain locations as special economic zones (SEZs) are experiencing difficulties in attracting manufacturing investors. Understanding these challenges should help policymakers to strengthen the underlying factors that facilitate manufacturing agglomeration.

Bibliographic Details

Main Authors:	Rahardja, Sjamsu, Kuncoro, Ari, Fitriani, Fitria, Varela, Gonzalo, Dipo, Mohammad Adhi
Format:	Policy Note biblioteca
Language:	English en_US
Published:	World Bank, Jakarta 2012-09
Subjects:	ACCESS TO SERVICES, ACCESSIBILITY, ACCOUNTABILITY, ACTION PLANS, ARTERIES, AUTONOMY, AVERAGE PRODUCTIVITY, BANKS, BOTTLENECKS, BUSINESS ACTIVITIES, BUSINESS ENVIRONMENT, BUSINESS LICENSES, BUSINESS REGISTRATION, BUSINESS REGISTRATIONS, BUSINESSES, CAPITALS, COMMODITY, COMPANY, COMPETITIVENESS, CONGESTION COSTS, CONNECTIVITY, COPYRIGHT, CUSTOMS, DECENTRALIZATION, DECONCENTRATION, DISTRICT GOVERNMENTS, DIVERSIFICATION, DRIVERS, DRIVING, ECONOMIC ACTIVITIES, ECONOMIC DEVELOPMENT, ECONOMIC REFORM, ECONOMICS, ECONOMIES OF SCALE, ELECTRICITY, ELECTRONICS INDUSTRY, EMPIRICAL EVIDENCE, EMPLOYMENT, ENTERPRISE SURVEY, ENTERPRISE SURVEYS, ENVIRONMENTAL, ENVIRONMENTAL PROTECTION, ENVIRONMENTS, EQUIPMENT, EXPANSION, EXTERNALITIES, FINANCIAL INSTITUTIONS, FIRMS, FIXED COSTS, FOREIGN COMPANIES, FOREIGN DIRECT INVESTMENT, GAS SECTOR, GENERAL POPULATION, GEOGRAPHICAL ADVANTAGES, GLOBAL MARKETS, GOVERNMENT CONTRACT, GOVERNMENT POLICIES, GOVERNMENT POLICY, GOVERNMENT REGULATIONS, HOUSING, HUMAN CAPITAL, INDUSTRIAL DEVELOPMENT, INFRASTRUCTURE ACCESS, INNOVATION, INSTALLATION, INTERMEDIATE INPUTS, INVENTORY, LABOR COSTS, LABOR PRODUCTIVITY, LAND USE, LARGE CITIES, LICENSE, LICENSES, LICENSING, LOCAL GOVERNMENT, LOCAL GOVERNMENTS, LOCAL INDUSTRIES, LOCALIZATION, MANUFACTURERS, MANUFACTURING, MANUFACTURING INDUSTRIES, MARKET VALUE, MARKETING, MATERIAL, METROPOLITAN AREAS, MOBILITY, NATURAL RESOURCES, NEGATIVE EXTERNALITIES, NEW ENTRANTS, OIL, ONE-STOP SERVICES, ONE-STOP SHOP, POLICE, POLICY FRAMEWORK, POLLUTION, POSITIVE EXTERNALITIES, POTENTIAL INVESTORS, PRIVATE FIRMS, PRIVATE INVESTMENT, PRIVATE INVESTORS, PRIVATE SECTOR, PRODUCTION COSTS, PRODUCTION PROCESSES, PUBLIC INFRASTRUCTURE, PUBLIC POLICY, PUBLIC SAFETY, PUBLIC SERVICES, PUBLIC TRANSPORT, PUBLIC TRANSPORT SYSTEMS, QUALITY STANDARDS, RAIL, REGULATORY ENVIRONMENT, REGULATORY ENVIRONMENTS, REGULATORY FRAMEWORK, RESULT, RESULTS, RETURNS TO SCALE, ROAD, ROAD INFRASTRUCTURE, SEARCH, SERVICE PROVIDERS, SITES, SUPERVISION, SUPPLIERS, SUPPLY CHAINS, TAX, TAX ADMINISTRATION, TAX RATES, TECHNICAL TRAINING, TELEPHONE, TELEPHONE CONNECTION, TRADE FACILITATION, TRADE OUTCOMES, TRADITIONAL TECHNOLOGY, TRAFFIC, TRAFFIC CONGESTION, TRAFFIC VOLUMES, TRANSMISSION, TRANSPORT, TRANSPORT SYSTEMS, TRANSPORTATION, TRAVEL COSTS, URBANIZATION, USER, WAGES, WATER CONNECTION,
Online Access:	http://documents.worldbank.org/curated/en/183211468267347449/Agglomeration-and-manufacturing-activities-in-Indonesia https://hdl.handle.net/10986/26714
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