REVIVING THE MANUFACTURING INDUSTRY THROUGH SERVICIFICATION STRATEGY: EVIDENCE FROM INDONESIAN MICRODATA

Mha Ridhwan, Nurul Pratiwi, Sulistiyo K. Ardiyono and Amelia A. Hidayat
Additional contact information
Mha Ridhwan: Bank Indonesia
Nurul Pratiwi: Bank Indonesia
Sulistiyo K. Ardiyono: Bank Indonesia
Amelia A. Hidayat: Bank Indonesia

No WP/03/2024, Working Papers from Bank Indonesia

Abstract: This study investigates the role of servicification within Indonesia’s manufacturing sector, focusing on its impact on productivity, global value chain (GVC) participation, and regional diversity in servicification practices. Empirical results indicate that servicification is positively correlated with firm productivity, with a 10% increase in service intensity linked to approximately a 1% productivity boost. The study further explores the differential impact of servicification across regions, technological classifications, and firm sizes. It reveals that in regions such as Java and Sumatra, high-value-added sectors benefit more from service integration, while the Eastern of Indonesia (EoI)’s reliance on primary manufacturing highlights challenges due to skill gaps and resource constraints. Also, based on regional survey data, they reveal how the integration of services—such as logistics, R&D, and customer support—into manufacturing operations can drive productivity and increase the sector’s competitiveness. This analysis provides policy recommendations to optimize servicification, enhance GVC participation, and support the transition to a service-oriented manufacturing landscape.

Keywords: Servicification; Manufacturing Sector; Productivity; Global Value Chains; Digitalization (search for similar items in EconPapers)
JEL-codes: L25 L60 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://publication-bi.org/repec/idn/wpaper/WP032024.pdf First version, 2024 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:idn:wpaper:wp032024

Access Statistics for this paper

More papers in Working Papers from Bank Indonesia Contact information at EDIRC.
Bibliographic data for series maintained by Lutzardo Tobing ( this e-mail address is bad, please contact ) and Jimmy Kathon ().