Growth of 10 to 15 percent in the next two to five years is cited for Indonesia’s security industry.
Indonesia is one of the largest economies in the world. Growth in the country’s security industry is expected to continue, driven by strong demand from the public and private sectors. This report takes a closer look at Indonesia’s security industry and market dynamics that propel its growth.
Indonesia has achieved impressive economic growth in recent years, with GDP growing 5.31 and 5.05 percent for 2022 and 2023, respectively. This is conducive to the country’s security industry, where growth is expected.
“This year, Indonesia has become the 7th largest economy in the world, which gives a sense of stability in an uncertain global economy. With this strong economic position, we expect to see continued growth in the security industry, driven by both new technology and the rising need for comprehensive security solutions across different industries,” said Alfredo Endon, Business Development Manager at PT. Indostar Security.
“To be honest, the security market will definitely face some challenges, especially considering the current global market conditions,” Endon continued. “However, despite these challenges, we're still optimistic about growth. We expect the security market in Indonesia to grow by around 5 to 8 percent this year. While there will be obstacles along the way, the ongoing demand for security in key sectors, especially industrials and resources, gives us confidence that the market will continue to expand.”
“The Indonesian security market is growing steadily as it recovers from Covid-19,” said Sean Conti, Sales Manager for Indonesia at Apollo Security. “A lot of projects got postponed during Covid-19, and government budget allocations were more focused on recovering the economy from the impact of Covid-19. But when Covid-19 subsided back in 2023 and with the announcement of the new capital, new projects are blooming and business is growing. I expect the security system industry to grow 10 to 15 percent in the next two to five years.”
Demand from public, private sectors
Indonesia's security industry is fueled by strong demand from the public and private sectors. The Indonesia government, for example, is committed to rolling out more smart city and smart transportation projects.
"The government of Indonesia is pushing the idea of smart city, not only for the new capital but also to be implemented in some of major cities throughout Indonesia. The Indonesian police have been actively implementing the use of Electronic Traffic Law Enforcement (ETLE), a system using smart cameras to identify traffic violations and vehicle registrations automatically. Recently Soekarno Hatta and Bali Ngurah Rai Airports have also been utilizing the latest security technology in the market such as auto-gate systems and advanced biometrics to assist with immigration processing,” Conti said.
One thing worth mentioning is Indonesia’s plan to relocate its capital from Jakarta to Nusantara, a move that is expected to propel the country’s security growth even further.
"Government project, particularly the RPJPN – National Long-Term Development Plan 2025 to 2045 – focused on large-scale infrastructure projects which include highways, industrial zones, smart cities as well as the new capital, Nusantara,” said Carl Malmqvist, Regional Director for South Asia Pacific at Axis Communications. “Indonesia’s new capital, Nusantara will require significant investments in the physical and digital security to ensure management of crime as well as cybersecurity."
The Indonesia security industry is also driven by demand from the private sector where foreign direct investment is growing. “The continuous growth of foreign direct investment in Indonesia is driving an increasing demand for security across various private sectors. This includes the expansion of the electric vehicle (EV) industry and its ecosystem, with companies such as BYD, CATL, Hyundai, LG, Wuling, and VinFast establishing manufacturing facilities in the country. Additionally, the downstream industries in mining, oil, and gas, as well as advancements in the technology sector — including telecommunications and data centers — are experiencing significant development. Major players like Sinarmas-LG CNS, Microsoft, Google, Amazon, and Alibaba are actively investing in Indonesia’s digital infrastructure,” said Hatmadita Ramuny, Co-Founder of Aetherica.
Users in Indonesia’s private sector are increasingly drawn to new technologies such as AI. "The integration of AI into business operations is becoming increasingly attractive to private sectors looking for efficient systems that can also enhance security. Technologies like object recognition, while still evolving, are in high demand across various industries for their ability to improve security and operational efficiency. Additionally, centralized systems that allow for streamlined monitoring from one location are becoming more popular, offering significant operational benefits,” Endon said.
Product Adopted:Other