An industry with resilient investment opportunities
The medical device industry in Indonesia provides various investment opportunities for local and global players. A growing population, increasing health awareness, and improving industrial infrastructure are some of the factors sustaining the industry’s growth in the country. The annual revenue of Indonesia’s medical device industry is expected to expand to over 2.1 billion U.S. dollars by 2028 from around 1.8 billion U.S. dollars in 2022. The implementation of the government’s national health insurance scheme, known as Jaminan Kesehatan Indonesia- Kartu Indonesia Sehat (JKN-KIS), has also been key to the development and robustness of Indonesia’s medical device industry. Since its rollout in early 2014, JKN-KIS has made healthcare more accessible for most Indonesians, leading to increasing demand for medical facilities, including medical devices. JKN-KIS is one of the largest national insurance schemes in the world, aiming to cover the whole Indonesian population. As of 2022, JKN-KIS has covered around 90 percent of the Indonesian population.The medical device industry in Indonesia has been focusing on downstream operations as the country still heavily relies on imports of sophisticated medical technology. As of 2021, around 2.63 billion U.S. dollars’ worth of imported medical equipment circulated in Indonesia. This figure far surpassed the country’s medical equipment exports, valued at around 1.4 million U.S. dollars in the same year.
A priority sector to sustain economic growth
Due to increasing demand, the Indonesian government has included the medical device industry as one of the focus industries in its Making Indonesia 4.0 roadmap. This initiative is part of Indonesia’s 4th Industrial Revolution strategies aiming to boost its manufacturing sector to improve economic activities, exports, and employment. The government encourages medical device industry players to utilize technology-based digital transformation from production to distribution to improve industry performance.Furthermore, with a long-term goal of being less dependent on imported medical devices to meet domestic demand, Indonesia strives to refocus its local production on manufacturing more advanced medical devices. Domestic production of medical devices in Indonesia is currently centered on the manufacture of low-tech items such as surgical masks, gloves, and hospital beds. As of 2021, the country’s local production value of medical equipment was at 2.3 billion U.S. dollars. To accelerate the development and utilization of domestically produced medical devices, the government has prioritized the bidding of local players in tenders.
