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1、 BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDONESIA 2023 A REPORT FROM TEAM SWEDEN IN INDONESIA TABLE OF CONTENTS FOREWORD.4 EXECUTIVE SUMMARY.5 ABOUT THE SURVEY.6 ECONOMIC OUTLOOK.7 THE MARKET.10 HOW SWEDISH COMPANIES SUCCEED IN INDONESIA.15 ACTING SUSTAINABLY.18 THE PUSH FOR MANUFACTURING

2、LOCALISATION.21 SWEDEN INDONESIA SUSTAINABILITY PARTNERSHIP.23 KEY CONTRIBUTORS TO THIS REPORT Business Sweden in Indonesia Erik Odar Julian Rustani Nicole Skoglund copyright 2023 Business Sweden +1,400 respondents 22 markets Current business climate Industry turnover Future investments Positive vie

3、w on the current global business climate is on the rise 74%of Swedish companies expect their industry turnover to increase 50%of Swedish companies plan to increase their investments slightly or significantly in the next 12 months Globally valued success factors Brand Sweden 1.Sales competence 2.Cost

4、 efficiency 3.Partnerships and local relationships 62%of Swedish companies abroad consider the Swedish brand to be beneficial for business Local conditions with high satisfaction Local conditions with least satisfaction 1.Personal safety 2.Infrastructure 3.Service providers 1.Labour market regulatio

5、ns 2.Corporate tax 3.Licenses and permits Environmental considerations Corruption Human rights violation and labour rights abuse 36%of respondents believe the environment is a considerable factor in their customers purchasing decisions Moderate to high risk in emerging markets and South Korea Low ri

6、sk in advanced economies Moderate risk in emerging markets Low risk in advanced economies FOREWORD BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDONESIA 2023|4 FOREWORD Indonesias economy has continued to enjoy a strong recovery after it was severely hit during the Covid-19 pandemic of 2020 and

7、 2021.In 2022,it managed to obtain a respectable growth rate of 5,2 per cent,higher than several other regional powerhouses such as China and Thailand.Furthermore,this year Indonesia has managed to regain the upper-middle income country status from the World Bank.These indicators can be considered a

8、s positive signs for the countrys future economic outlook.The economic recovery is also reflected in commercial relationships between Sweden and Indonesia.Bilateral trade between both countries reached USD 873 million USD in 2022,up nine per cent from USD 802 million in 2021.The Swedish and Indonesi

9、an governments are actively working to further develop their economic relationships.Since 2020,a collaboration programme called the Sweden-Indonesia Sustainability Partnership(SISP)launched as a platform for collaboration to allow for more sustainable approaches to develop within various economic se

10、ctors.Through the SISP programme,Team Sweden is working with the government and industries to offer funding support,capacity building and innovative technology introductions.This year,several projects and programs are active in areas such as EV transformation,Industry 4.0,hospital development,green

11、energy transition and sustainable mining.Swedish companies play a very important role in these initiatives as they provide new technologies and solutions to Indonesian businesses and government institutions.Therefore,understanding Swedish firms perspectives on the state of the Indonesian business en

12、vironment is crucial for the success of the programme and for continuing to strengthen the positive economic relationships between the two countries.The 2023 Business Climate Survey is intended to capture these Swedish companies insights and experiences into one coherent report,which we hope will be

13、 beneficial for Swedish companies that are planning to enter the Indonesian market or are already present and active.We would like to thank all companies that have committed their time to providing their perspectives through the survey.These insights have been very valuable for us in preparing this

14、report.Erik Odar Trade Commissioner of Sweden to Indonesia EXECUTIVE SUMMARY BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDONESIA 2023|5 EXECUTIVE SUMMARY Report coverage Economic outlook Market Key success factors Sustainability Push for local manufacturing 31(44%)out of 70 companies invited

15、participated in the survey 68%of the respondents are industrial companies globally Indonesias economy grew by 5,2 per cent in 2022 74%of the respondents report a stable profitability 55%of the respondents plan to increase investments in the coming 12 months 74%of the respondents value the Indonesian

16、 business climate positively Distributors,personal safety,and suppliers are considered top three aspects the respondents found most favourable in Indonesia Partnerships,cost efficiency and sales competence are considered top three key success factors for the respondents operations in Indonesia 78%sa

17、y that“the Swedish brand”boosts their business 45%of the respondents believe their customers consider the sustainability aspect when deciding which product to purchase,a signifcant increase compared to the previous year 39%of respondents that currently do not have a manufacturing function in Indones

18、ia plan to start one 75%of respondents with existing manufacturing capacity in Indonesia have plans to expand it ABOUT THE SURVEY BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDONESIA 2023|6 ABOUT THE SURVEY Documenting Swedish companies insights on the Indonesian market The Business Climate Su

19、rvey is a global initiative undertaken by Team Sweden across 22 markets all over the world.This tool enables Swedish companies to provide their important insights on their view of each markets business climate as well as corresponding opportunities and challenges throughout the respective markets.Th

20、is survey is the fourth edition of the initiative in Indonesia.The data collection was conducted from March to April 2023 through online questionnaires,which were distributed to 70 Swedish companies that are doing business in Indonesia.A total of 31 companies responded to the survey,which represents

21、 a response rate of 44 per cent.Companies participating in the survey are Swedish companies which conduct business in Indonesia ranging from limited sales and sourcing activities to full-scale manufacturing operations.Not all have a physical presence in Indonesia,as some of them manage their Indones

22、ian operations from regional hubs,usually Singapore.A significant majority(77 per cent)of these companies are large businesses which employ more than 1000 employees globally,while medium-scale businesses(250 1000 employees)and small-scale businesses(less than 250 employees)account for 10 per cent an

23、d 13 per cent,respectively.Industrial companies are the predominate industry(68 per cent),followed by professional services(24 per cent)and consumer companies(eight per cent).Approximately half of the companies are mature firms,which have been present in Indonesia for 20 years or more,while 32 per c

24、ent of the companies are considered experienced.Only 18 per cent of the respondents are considered newcomers.In order to ensure strategic insights were obtained from the survey,the online questionnaires were sent to senior management personnel within the companies;president directors,country manager

25、s,or other high-ranking positions based in Indonesia.However,for companies which do not possess a residential office in Indonesia,equivalent positions based in regional hubs(for example Area Sales Manager for Asia-Pacific based in Singapore)were contacted.This report is divided into six different se

26、ctions.The first section documents the respondents view regarding their financial performances and their expectation regarding their business turnover and investment this year.This is followed by a section describing their perspective on Indonesian business climate and factors that influence it.The

27、third section discusses key factors that drive their success in the Indonesian market,while the fourth section elaborates how the companies perceive sustainability,corruption prevention and human rights issues in Indonesia.It is immediately followed by the fifth section,which provides a snapshot reg

28、arding how the respondents react to the Indonesian governments push for foreign companies to localise manufacturing in Indonesia.Lastly,the sixth section elaborates the Sweden Indonesia Sustainability Partnership(SISP)initiative undertaken by Team Sweden in Indonesia to help Indonesia in its sustain

29、ability journey as well as promoting Swedish solutions NOTE:Global Employees.Large(L)1000.Medium(M)250-1000.Small(S)0-249 NOTE:Industrial 68%Professional services 24%Consumer 8%C SIZE OF COMPANIES MAIN INDUSTRY SIZE OF COMPANIES NOTE:Mature(-2001)Experienced(2002-2016)Newcomer(2017-)BUSINESS CLIMATE

30、 SURVEY FOR SWEDISH COMPANIES IN INDONESIA 2023|7 ECONOMIC OUTLOOK Indonesia is expected to continue the path of economic growth after the Covid-19 pandemic Indonesia has managed to return to a path of healthy economic growth after being hit hardly by the Covid-19 pandemic.In 2022,the economy grew 5

31、,2 per cent,a significant improvement from 2021s growth of 3,7 per cent.The substantial growth was driven by the uptick in global commodity prices,such as coal and palm oil,caused by the Russian invasion of Ukraine.Indonesia is considered among the top exporter of thermal coal and crude palm oil(CPO

32、)in the world.In 2023,the Organisation for Economic Co-operation and Development(OECD)predicts that the economic growth will slow down to 4,7 per cent,and in 2024,it is predicted to increase again to 5,1 per cent.The predicted growth decline in 2023 is driven by the fall in commodity prices which ha

33、ve driven up the economic growth in 2022.For example,the price of CPO has declined to USD 816 per metric tonne in June 2023,a steep decline from the March 2022 price of USD 1,780.The price of coal also experienced a massive fall,from USD 431 per tonne in September 2022 to USD 139 per tonne in June 2

34、023.These significant price drops result in reduced value of Indonesian economic output and export.In addition,Indonesia will hold a general election in February 2024.Based on previous experience,economic growth normally slows down two quarters prior to the election being held,as businesses keep a c

35、areful attitude on massive investment and other strategic decisions due to uncertainties in in changes to policies and regulations with a new administration.Similarly,government agencies also tend to reduce disbursement,as a new government may change political priorities.The Indonesian government co

36、ntinues to invest significantly in infrastructure development,including the Nusantara new capital project in East Kalimantan and various major toll road projects across the archipelago,such as the Trans Sumatra toll road.These massive investments are expected to generate significant economic benefit

37、s and contribute to the long-term GDP growth.ACTUAL AND PROJECTED GDP GROWTH IN INDONESIA,2021-25 NOTE:Constant prices.”f”s after year numbers denote forecast.SOURCE:IMF,OECD ECONOMIC OUTLOOK BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDONESIA 2023|8 Increasing number of respondents report pr

38、ofitability in their Indonesian operations Majority of companies(74 per cent)participating in our survey indicate that they are currently operating at a profit.This represents a significant increase from last years result of 58 per cent and 2021s result of 50 per cent.On the opposite side,the per ce

39、ntage of companies reporting loss in their operation have declined significantly over the past two years,from 29 per cent in 2021 to mere six per cent in 2023.HOW WOULD YOU DESCRIBE YOUR COMPANYS FINANCIAL PERFORMANCE IN INDONESIA IN 2023?NOTE:The number of respondents for this question was 31.“Dont

40、 know/Not applicable”responses are included but not shown in figure.SOURCE:Business Climate Survey for Swedish Companies in Indonesia 2023.COMPARED TO THE DEVELOPMENT IN THE PAST 12 MONTHS,WHAT ARE YOUR EXPECTATIONS FOR THE COMING 12 MONTHS FOR YOUR INDUSTRY IN INDONESIA REGARDING TURNOVER?Compared

41、to the previous year,the percentage of respondents expecting an increase in turnover over the next 12 months after the survey period(March to April 2023)has risen significantly.81 per cent of respondents expect a rise in turnover,as opposed to 53 per cent in 2022.This significant increase is an indi

42、cation of trust given by Swedish companies in the recovery of the Indonesian economy in a post-Covid-19 era.ECONOMIC OUTLOOK BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDONESIA 2023|9 NOTE:The number of respondents for this question was 31.“Dont know/Not applicable”responses are included but

43、not shown in figure.SOURCE:Business Climate Survey for Swedish Companies in Indonesia 2023.Majority of the respondents are still bullish on investing in Indonesia Similar to the survey result from last two years,majority of respondents express a positive sentiment on investing more in the country fo

44、r the coming 12 months after the survey period(March to April 2023).In fact,the result shows a very small change over the years,with 55 per cent of respondents indicating their plan to increase investment,compared to 53 per cent in 2022 and 54 per cent in 2021.The intention of respondents to increas

45、e investment in the country is a good indication of optimism expressed by Swedish companies in the Indonesian economy.WHAT ARE YOUR COMPANYS INVESTMENT PLANS FOR THE COMING 12 MONTHS IN INDONESIA,COMPARED TO THE PAST 12 MONTHS?NOTE:The number of respondents for this question was 31.“Dont know/Not ap

46、plicable”responses are included but not shown in figure.SOURCE:Business Climate Survey for Swedish Companies in Indonesia 2023.THE MARKET BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDONESIA 2023|10 THE MARKET Swedish commercial relationships with Indonesia continue to develop in a positive wa

47、y Commercial relationships between Indonesia and Sweden continue to develop in a positive direction.Bilateral trade between the two countries have continued to increase as both economies recover from the effect of Covid-19 pandemic.The total trade relationship between Indonesia and Sweden reached US

48、D 873 million in 2022,which represented a nine per cent increase from the 2021 value of USD 802 million.From the 2022 value of USD 873 million,approximately 71 per cent(USD 620 million)come from the Indonesian import from Sweden.This import value represents an 11 per cent increase from 2021s import

49、value of USD 560 million.According to the data from Statistics Sweden,Swedish export to Indonesia is dominated by road vehicles,industrial machinery,as well as pulp and paper products.The increasing value of Indonesian import from Sweden provides an indication of significant demand from Indonesian c

50、ompanies on Swedish solutions,particularly high value industrial products such as road vehicles and industrial machines.This is a positive sign for Swedish companies in this sector which currently do not have a physical presence in Indonesia to invest in the Indonesian market.On the Indonesian side,

51、the government continues to court foreign investment in Indonesia through initiatives such as Omnibus Law,a set of law designed to attract investment and create jobs by streamlining business regulations,which was enacted in October 2020.The government also designates 20 Special Economic Zones(SEZ)ac

52、ross the country,which are designed to attract overseas-based companies through various fiscal and non-fiscal incentives.In addition,government megaprojects such as the Nusantara new capital city and various toll road,seaport,and airport projects are also open for investment from abroad.There is an

53、indication that these policies have attracted the interests of Swedish companies to invest in Indonesia.In 2022,the value of incoming Swedish investment to Indonesia reached USD 59,3 million,more than five times the 2021 investment value of USD 9,2 million.This is a very positive sign for the commer

54、cial relationship between Sweden and Indonesia.WHAT IS YOUR COMPANYS MAIN INDUSTRY IN INDONESIA?NOTE:The number of respondents for this question was 31.“Dont know/Not applicable”responses are included but not shown in figure.SOURCE:Business Climate Survey for Swedish Companies in Indonesia 2023.THE

55、MARKET BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDONESIA 2023|11 There is a high level of diversity in terms of industrial sector focus of Swedish companies on our survey.The most common sectors identified are industrial equipment(19 per cent)and automotive(13 per cent).This information is

56、consistent with the trade balance data which mentions that industrial equipment and road vehicle products are the largest Swedish export to Indonesia in terms of value and reflects the strength of Swedish world-class industrial equipment and transportation solutions in the market.IN WHAT YEAR DID YO

57、UR COMPANY ESTABLISH OPERATIONS IN INDONESIA?NOTE:The number of respondents for this question was 31.“Dont know/Not applicable”responses are included but not shown in figure.SOURCE:Business Climate Survey for Swedish Companies in Indonesia 2023.Majority(61 per cent)of Swedish firms responding to our

58、 survey this year have been operating in Indonesia more than ten years.This indicates that Swedish businesses in general have a strong intention to operate in the country for a long time.However,there are also some(21 per cent)newcomer companies in the market.SWEDISH FIRMS LOCAL NUMBER OF EMPLOYEES

59、IN INDONESIA IN 2023 NOTE:The number of respondents for this question was 31.“Dont know/Not applicable”responses are included but not shown in figure.SOURCE:Business Climate Survey for Swedish Companies in Indonesia 2023.THE MARKET BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDONESIA 2023|12 A

60、 vast majority(80 per cent)of Swedish companies in the survey are relatively small with less than 249 employees.Companies with 250 employees or more are firms with manufacturing facilities,which are not common in Indonesia.Respondents perceive the current business climate in Indonesia positively Maj

61、ority(61 per cent)of Swedish companies responding to the 2023 survey perceive the current Indonesian business climate in a positive manner.This provides a significant contrast to the result of 2021 and 2022 surveys,in which less than 50 per cent of respondents perceived the business climate of those

62、 years as positive.The decline of negative perception is also noticeable,from 27 per cent in 2021 to mere three per cent in 2023.The remarkable positive change in Swedish companies perception of the Indonesian business climate might be driven by the recovery of the Indonesian economy from the Covid-

63、19 pandemic and its corresponding restrictions to business activities.From early to mid-2021,Indonesia implemented a cordon sanitaire policy called PPKM(Pemberlakuan Pembatasan Kegiatan Masyarakat,in English:Community Activities Restriction Measures)to handle the spread of the Covid-19 pandemic.The

64、measures loosened after that,however,the economy recovered slowly as supply chains needed some time to recuperate due to temporary/permanent suspension of many businesses during the pandemic.As Indonesian and global companies at last returned to full capacity this year,business climate in the countr

65、y improved dramatically.Furthermore,this change in attitude can also be perceived as a positive indicator from the foreign business community regarding the continuing implementation of the Omnibus Law,which was enacted at the end of October 2020.“Indonesia is so far one of the few markets in the reg

66、ion.that still has a high level of activity,in many other markets business is declining somewhat compared to last year.”Managing Director An automotive company HOW DO YOU PERCEIVE THE CURRENT BUSINESS CLIMATE IN INDONESIA?NOTE:The number of respondents for this question was 31.“Dont know/Not applica

67、ble”responses are included but not shown in figure.SOURCE:Business Climate Survey for Swedish Companies in Indonesia 2023.“THE MARKET BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDONESIA 2023|13 Indonesian distributors,suppliers,and service providers are highly rated by the respondents,includi

68、ng within the field of personal safety In general,Swedish companies participating in our survey tend to express a relatively neutral opinion on conditions influencing their business in Indonesia.However,they highlighted above average performance of services given by distributors,suppliers,and servic

69、e providers in Indonesia to their businesses.Similar to last year,personal safety is also positively rated by the survey respondents.Overall,this scoring represented a marked increase from the result of last years survey.While last year identified several factors(8 out of 16)with below“neutral”thres

70、hold of five,this year all 15 factors evaluated attained score above five.Furthermore,there are significant score increases in the top four factors.Last year the score range for top four factors was between 5,6 to 6,1,while this year it ranged between 6,6 to 6,7.This provides indication that the bus

71、iness supporting ecosystem in Indonesia has improved compared to last year.Similar to the significant improvement in Swedish companies perception on overall Indonesian business climate,these improvements might be driven by the continuing recovery of the national economy together with all its stakeho

72、lders from Covid-19 pandemic,which allows stakeholders of the economy to restart their normal business operations.HOW WELL DO THE FOLLOWING CONDITIONS MEET THE NEEDS OF YOUR COMPANY IN INDONESIA?NOTE:The number of respondents for this question was 31.SOURCE:Business Climate Survey for Swedish Compan

73、ies in Indonesia 2023.THE MARKET BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDONESIA 2023|14 Customs procedures and local content requirements are trade barriers with most adverse impact according to the respondents Complicated customs procedures,increasingly stringent local content requireme

74、nts,and cumbersome regulations are identified as main factors that impede the respondents operations in Indonesia.These three factors were also identified as the main barriers during the last years survey.Nevertheless,there is a noticeable decrease in the per centage of respondents indicating the pr

75、esence of trade barriers.Last year,the top three barriers identified were customs procedures(56 per cent),regulations(50 per cent),and local requirements(44 per cent).However,this year the top three barriers have much lower per centages:customs procedures(30 per cent),local requirement(27 per cent),

76、and regulations(20 per cent).There are some concerns identified among Swedish businesses with regard to difficulties in acquiring steel products,particularly for companies which do not engage in manufacturing activities in the country.These restrictions are driven by the Indonesian governments inten

77、tion to limit wholesale import of products which have been made domestically,in order to encourage the growth of domestic manufacturing and reduce the burden on national trade balance.HAS YOUR COMPANY IN THE PAST YEAR ENCOUNTERED TRADE BARRIERS IN INDONESIA WITH A NOTICEABLY NEGATIVE IMPACT ON OPERA

78、TIONS,IN ANY OF THE FOLLOWING AREAS?NOTE:The number of respondents for this question was 30.SOURCE:Business Climate Survey for Swedish Companies in Indonesia 2023.HOW SWEDISH COMPANIES SUCCEED IN INDONESIA BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDONESIA 2023|15 HOW SWEDISH COMPANIES SUCCE

79、ED IN INDONESIA Marketing and aftersales activities still become the main focus of Swedish companies Similar to last years survey,the most common business activities undertaken by the respondents are marketing and sales(81 per cent)and aftersales support(61 per cent).Marketing and aftersales service

80、s are the most common operational functions conducted by international firms,as companies need to reach out effectively to sell products to their potential customers and provide support in case of any question or complaint after sale.The per centage of respondents which engage in manufacturing activ

81、ities is increasing from 21 per cent last year to 26 per cent.This is aligned with the continuing push from the Indonesian government for foreign companies to acquire manufacturing capabilities and increase the local content of products sold in Indonesia.OPERATIONS OF SWEDISH FIRMS IN THE MARKET NOT

82、E:The number of respondents for this question was 31.“Dont know/Not applicable”responses are included but not shown in figure.SOURCE:Business Climate Survey for Swedish Companies in Indonesia 2023.Relationships with customers are a key factor in maintaining competitiveness in the market This survey

83、also identifies various factors that are deemed important for the respondents in maintaining their business competitiveness in Indonesia.Last year,the top three factors selected were customer feedback,brand awareness,and sales competence.However,this year respondents selected partnerships/relationsh

84、ips and cost efficiency as the top two factors instead,while sales competence remained in the third position.HOW SWEDISH COMPANIES SUCCEED IN INDONESIA BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDONESIA 2023|16 TO DATE,WHICH OF THE FOLLOWING AREAS HAVE BEEN IMPORTANT IN MAINTAINING COMPETITI

85、VENESS IN INDONESIA?NOTE:The number of respondents for this question was 31.“Dont know/Not applicable”responses are included but not shown in figure.SOURCE:Business Climate Survey for Swedish Companies in Indonesia 2023.Swedens positive reputation helps the companies gain respect from the Indonesian

86、 customers A vast majority(78 per cent)of Swedish companies surveyed indicate that they have enjoyed various benefits from the positive image of Sweden in Indonesia.This is consistent with last years result,in which 79 per cent of firms answered similarly.In this country,Sweden is renowned for its i

87、mage as a highly developed Scandinavian country.Swedish consumer goods brands are well regarded among the middle class,partly due to this association in Sweden.For industrial products,Swedish industrial equipment is usually considered high quality products which incentivise premium prices.However,th

88、ere is a concern that the recent burnings of the Quran in Sweden can influence Swedens image in Indonesia adversely,as a vast majority(approximately 85 per cent)of Indonesians are Muslims.In the aftermath of the Quran burning by a right-wing politician Rasmus Paludan in January 2023,around 1 000 peo

89、ple participated in a demonstration in front of the Swedish Embassy in Jakarta condemning the action and the government,which in their opinion did not do enough to stop the burnings.Although the response in Indonesia is relatively muted compared to other Muslim countries,it is not impossible for suc

90、h events to adversely impact the perspective of Sweden in the eyes of Indonesians.HOW SWEDISH COMPANIES SUCCEED IN INDONESIA BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDONESIA 2023|17 TO WHAT EXTENT WOULD YOU ESTIMATE THAT THE“SWEDISH BRAND”CONTRIBUTES TO YOUR BUSINESS IN INDONESIA?NOTE:The

91、number of respondents for this question was 31.“Dont know/Not applicable”responses are included but not shown in figure.SOURCE:Business Climate Survey for Swedish Companies in Indonesia 2023.ACTING SUSTAINABLY BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDONESIA 2023|18 ACTING SUSTAINABLY Indo

92、nesian customers pay little attention to the environmental aspects when deciding to purchase something,although it is changing In general,Indonesian consumers do not pay strong attention to environmental or sustainability aspects.Majority(55 per cent)of Swedish corporate respondents believe that the

93、ir customers do not consider these factors as important when deciding which product to purchase.Even so,the per centage of companies answering this way has been declining over the last two years,with 71 per cent and 58 per cent of participating companies in 2021 and 2022,respectively,selecting eithe

94、r“very little”or“little”responses with regard to customers consideration towards environmental aspects of a product or service.On the other side,respondents selecting“partially”,“much”,or“very much”have been growing,from 25 per cent in 2021 to 45 per cent this year.This provides an indication of inc

95、reasing awareness among Indonesian customers,at least among those which purchase the products from Swedish companies,regarding the importance of acquiring sustainable products.TO WHAT EXTENT DO CUSTOMERS IN INDONESIA CONSIDER ENVIRONMENTAL ASPECTS OF A PRODUCT OR SERVICE IN THEIR PURCHASING DECISION

96、?NOTE:The number of respondents for this question was 31.SOURCE:Business Climate Survey for Swedish Companies in Indonesia 2023.Respondents reported having very limited exposure to corruption during their operations this year Indonesia is not performing very well in terms of corruption prevention.In

97、 2022,it only managed to attain the 110th rank out of 180 countries with the index score of 34 on 2022 Corruption Perceptions Index,which measures how experts and members of the public perceives the level of corruption in the country.This represents a substantial decline from 2021s achievement,where

98、 the country managed to attain the 96th rank with the index score of 38.In terms of index score,this is the largest decline since 1995.ACTING SUSTAINABLY BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDONESIA 2023|19 However,only a very small percentage of the survey respondents have reported at

99、tempts of bribery or fraud when doing business in Indonesia.A mere three per cent of the respondents were exposed to corruption when dealing with public bodies,while another three per cent experienced it when dealing with private counterparts.The limited exposure to corruption experienced by respond

100、ents might have been caused by the reputation of Swedish companies as having a zero-tolerance policy on corruption and strong internal control,which dissuade unscrupulous parties to try to engage in fraudulent activities with these firms.CORRUPTION PERCEPTION INDEX,INDONESIA(2018-2022)SOURCE:Transpa

101、rency International.HAS YOUR COMPANY IN INDONESIA BEEN EXPOSED TO CORRUPTION SUCH AS,BUT NOT LIMITED TO,ATTEMPTS OF BRIBERY OR FRAUD IN CONTACTS WITH ANY OF THE FOLLOWING AREAS?NOTE:The number of respondents for this question was 28.SOURCE:Business Climate Survey for Swedish Companies in Indonesia 2

102、023.ACTING SUSTAINABLY BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDONESIA 2023|20 No exposure to human rights or labour rights violation found during the respondents operations in Indonesia Respondents also indicate no exposure to human rights or labour rights violations in their interaction

103、 with their suppliers,customers,or partners in Indonesia.Strong global policies on human rights and labour rights which also bind parties partnering with the company are deemed important in encouraging the Indonesian local partners to behave ethically by respecting human rights and labour rights in

104、their operations.HAS YOUR COMPANY IN INDONESIA ENCOUNTERED ANY FORM OF HUMAN RIGHTS VIOLATIONS AND/OR LABOUR RIGHTS OR ABUSE IN ANY OF THE FOLLOWING AREAS?NOTE:The number of respondents for this question was 28.SOURCE:Business Climate Survey for Swedish Companies in Indonesia 2023 BUSINESS CLIMATE S

105、URVEY FOR SWEDISH COMPANIES IN INDONESIA 2023|21 THE PUSH FOR MANUFACTURING LOCALISATION The Indonesian government continues to push for manufacturing localisation,which drive Swedish firms to manufacture products locally As discussed previously in this report,the Indonesian government is imposing v

106、arious mechanisms to discourage foreign companies to import particular types of finished goods from abroad to Indonesia,for example,finished steel products,which have resulted in significant difficulties for Swedish companies whose businesses are dependent on these kinds of products.In addition to t

107、hese import restrictions,the Indonesian government also mandates all government agencies and institutions to prioritise domestically manufactured products over imported ones.If there are products with a sufficiently in high local content(in Indonesian Tingkat Komponen Dalam Negeri/TKDN)according to

108、the regulations and quality specifications from user expectations,the government agencies are required to use the domestic products.These policies can put Swedish companies operating in Indonesia at a disadvantage,as many Swedish firms do not manufacture their products in the country.Therefore,if th

109、ere is a sufficient product demand in the country,then acquiring manufacturing capabilities either through direct investment or through collaboration with other parties can be beneficial.There is an indication that the Swedish respondents of this survey move into this direction.39 per cent of compan

110、ies which have not established local manufacturing capabilities have stated they are interested in manufacturing their products in Indonesia.Out of these firms,66 per cent prefer to do this through a contract manufacturing agreement with an Indonesian partner.Entering a JV agreement and direct acqui

111、sition of an Indonesian company were less preferred alternatives,with only 23 per cent and 10 per cent of respondents selecting these options,respectively.No respondent indicates their interest in investing directly to build a facility in Indonesia.Conducting a manufacturing agreement with a local c

112、ompany is seen as a more favourable option for many companies,particularly those which are still at an early stage of business in Indonesia or have relatively limited financial resources,as there is no large upfront investment involved.If the contract manufacturer does not perform well,the Swedish c

113、ompanies can easily switch to other firms which can fulfil the contract according to the predetermined specification.THE PUSH FOR MANUFACTURING LOCALISATION BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN INDONESIA 2023|22 DO YOU HAVE ANY PLAN TO ESTABLISH LOCAL MANUFACTURING AND/OR ASSEMBLY CAPABI

114、LITIES AS A RESPONSE TO THE INDONESIAN LOCAL CONTENT REQUIREMENTS(TINGKAT KOMPONEN DALAM NEGERI/TKDN)?NOTE:The number of respondents for this question was 23.“Dont know/Not applicable”responses are included but not shown in figure.SOURCE:Business Climate Survey for Swedish Companies in Indonesia 202

115、3.Swedish respondents with existing manufacturing facilities in Indonesia are still interested in expanding their capacity further Some Swedish companies,particularly the ones with a significant number of customers in the country,have established manufacturing/assembly operations in Indonesia,which

116、immensely helps them in public sector tenders.However,with significant domestic demand growth,existing production capacity might not be sufficient.Among eight respondents which state that they already have an adequate manufacturing capacity in Indonesia,75 per cent have said that they have a plan to

117、 expand their production scale in the country.Out of these companies,33 per cent have stated that they are planning to expand their manufacturing capacity in short term(within the next two years),while the rest 67 per cent are looking at a longer timeframe(more than two years)in their plan for expan

118、sion.NOTE:The number of respondents for this question was 8.“Dont know/Not applicable”responses are included but not shown in figure.SOURCE:Business Climate Survey for Swedish Companies in Indonesia 2023 SWEDEN INDONESIA SUSTAINABILITY PARTNERSHIP BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN IND

119、ONESIA 2023|23 SWEDEN INDONESIA SUSTAINABILITY PARTNERSHIP In 2020,Team Sweden in Indonesia,with the support of the Indonesian Ministry for Foreign Affairs,launched the Sweden-Indonesia Sustainability Partnership(SISP).SISP is a platform to develop collaborations between Sweden and Indonesia,where t

120、he countries jointly work to fulfil the United Nations Sustainable Development Goals(SDG)2030 commitments in various fields.This programme aims to foster cooperation between Swedish and Indonesian companies and institutions,which also allows for Swedish solution providers to introduce their solution

121、s to Indonesian stakeholders.SISP Week 2022 By the end of every year of SISP,a conference is organised to sum up the achievements and activities in the program and have a joint dialogue to define the priorities and program for the upcoming year.In the conference,representatives from both countries g

122、overnments join hands with leading industry stakeholders to assess the program results,sign off on new collaborations and set the direction for the upcoming year.In 2022,the event was held on December 5-6 at the Langham Hotel Jakarta.It was attended by hundreds of people representing various Swedish

123、 and Indonesian companies,government institutions,and industry associations.The program was divided into four main sessions:Industry This session focused on exploring issues and solutions in the manufacturing industries,particularly related to how Swedish innovations can help the Indonesian manufact

124、uring sector in increasing its international competitiveness and drive a green transition Sustainable Transport This session focused on the plans for implementing green urban transport solutions in Indonesian cities and how Sweden can help Indonesia in electrifying and enhancing public transport sys

125、tems in its major cities Healthcare This session discussed trends in the Indonesian healthcare industry and how Sweden can support its development with public,private and academic partnerships.Energy This session explored initiatives that can support Indonesia in achieving its 23%renewable energy ta

126、rget.Areas like green energy(renewable energy in general),blue energy(ocean-based renewable energy),energy efficiency,heat efficiency,and smart grid were explored and a program was developed to manage Swedish support in these areas.Industry Session:Panel Discussion“Unlocking Innovation for Sustainab

127、le Economic Growth”Sustainable Transport Session:Panel Discussion“Collaboration in Building Resilient Electromobility System Throughout Indonesia”Energy Session:Focus Group Discussion(FGD)on Energy Efficiency SWEDEN INDONESIA SUSTAINABILITY PARTNERSHIP BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES I

128、N INDONESIA 2023|24 SISP 2023 In 2023,SISP has four active programs that were outlined and planned during the SISP conference.SISP Industry 4.0 Alliance To support the national Making Indonesia 4.0 program,team Sweden is building an alliance of Swedish solution providers that can offer technologies

129、to further strengthen the capabilities of manufacturers in Indonesia.Guided by the Indonesian Ministry of Industry,the alliance is meeting with C-level executives at key manufacturers in the country,discussing their needs and matching them with Swedish technologies and solutions.SISP Renewable Energ

130、y Alliance Similar to the Industry 4.0 program,the SISP Renewable Energy Alliance is a gathering of Swedish companies that have technologies and solutions to help drive the green energy transition of Indonesia,improve its power grid and strengthen energy efficiency.The alliance is working together w

131、ith Team Sweden,the Indonesian Ministry of Energy,PLN and various local project owners to identify areas where their solutions can be of best use to Indonesia.SISP Transportation Program The SISP Transportation program is established to support the development of sustainable public transport in Indo

132、nesia,particularly by exploring how Sweden can support the electric vehicle(EV)transformation in Jakarta.Swedfund is funding a study on charging infrastructure for buses and working with the government and Swedish companies to build a long-term partnership on national EV development.SISP Healthcare

133、Program The SISP Healthcare program is focused on exploring how Swedish expertise and technical innovations can support Indonesias plans for developing new and modernized hospitals.This program includes a business delegation to Indonesian major hospitals and a project to support the continued development of healthcare application and management systems.Similar to last year,these initiatives will culminate in SISP Week 2023,which will be organised in December 2023.CONTACT US BUSINESS SWEDEN IN INDONESIA jakartabusiness-sweden.se erik.odarbusiness-sweden.se