Competitiveness of the Indonesian Construction Industry

Indonesia’s construction industry is important to the national economy. However, its competitiveness is considered low due to the lack of success of its development strategy and policy. A new approach known as the cluster approach is being used to make strategy and policy in order to develop a stronger, and more competitive industry. This paper discusses the layout of the Indonesian construction cluster and its competitiveness. The archival analysis research approach was used to identify the construction cluster. The analysis was based on the input-output (I/O) tables of the years 1995 and 2000, which were published by the Indonesian Central Bureau of Statistics. The results suggest that the Indonesian construction cluster consists of the industries directly involved in construction as the core, with the other related and supporting industries as the balance. The anatomy of the Indonesian construction cluster permits structural changes to happen within it. These changes depend on policies that regulate the cluster’s constituents.