The Dynamics of Sectoral Roles and Total Factor Productivity (TFP) in Indonesia

Sahara (1) , Tony Irawan (1) , Wildan Nur Arrasyiid Sane Pratinda (2)
(1) Department of Economics, FEM IPB, Indonesia,
(2) Institut Pertanian Bogor, Indonesia

Abstract

Visi Indonesia Emas 2045 sets a target for Indonesia to transform into a developed country with high income. To achieve this vision, an understanding of the interaction of economic sectors in producing efficient output and added value is essential. This study aims to analyze the dynamics of economic structure and sectoral productivity performance in Indonesia through the Total Factor Productivity (TFP) approach using Input-Output (IO) Table analysis for the period 1990 to 2020. The analytical tools used include linkage analysis, multiplier analysis, and TFP growth to measure the efficiency of the use of intermediate and primary inputs. The results show that the Indonesian economy is experiencing symptoms of early deindustrialization characterized by declining efficiency and negative TFP values ​​in the manufacturing sector. Although this sector still has strong linkages and high multipliers, its strength is increasingly weakening. In contrast, the service and mining sectors demonstrate TFP growth, as well as an increasing role in the Indonesian economy when viewed from their linkages and multipliers. Meanwhile, the agricultural sector shows declining efficiency and negative TFP values ​​in most sectors as well as still weak linkages and multipliers in the economy. This study shows that the Indonesian economy is shifting from the dominance of the primary and secondary sectors to the dominance of the tertiary sector.

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Authors

Sahara
Tony Irawan
Wildan Nur Arrasyiid Sane Pratinda
Wildanarrasyiid@apps.ipb.ac.id (Primary Contact)
The Dynamics of Sectoral Roles and Total Factor Productivity (TFP) in Indonesia. (2026). Jurnal Ekonomi Dan Kebijakan Pembangunan, 15(1), 62-83. https://doi.org/10.29244/jekp.15.1.2026.%p

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The Dynamics of Sectoral Roles and Total Factor Productivity (TFP) in Indonesia. (2026). Jurnal Ekonomi Dan Kebijakan Pembangunan, 15(1), 62-83. https://doi.org/10.29244/jekp.15.1.2026.%p

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