INDONESIA INDUSTRIAL TRANSFORMATION .1.

It is now possible to obtain a fairly complete picture of Indonesian industrial development, based on the 1986 Economic Census and subsequent updates, the incorporation of the huge oil and gas sector, and the earlier industrial data base. The picture is one of dramatic growth and transformation since the late 1960s when Indonesia was one of the least industrialised countries for its size. In this paper we examine the pattern and changing structure of industry, focusing on industry composition, regional industrialisation, ownership, scale and wages. Indonesia's industrial transformation is evident not only in rapid output and employment growth, but also in the transition to more capital and skill-intensive industries, a narrowing in the earlier very large (almost ‘dualistic’) productivity differentials, strong productivity and wage growth, a broadening of the industrial base outside Java, and a probable reduction in concentration levels (at least by establishment). © 1990, Taylor & Francis Group, LLC. All rights reserved.