Indonesia鈥檚 per-capita income continues to grow from year to year and so do its population. Meanwhile, the environmental threats from climate change loom and sustainable and ecological-friendly property and infrastructure are increasingly in demand. Amidst all this, technological sufficiency and human resources capacity hamper Indonesia鈥檚 construction industry.
According to the Indonesian Statistics Agency (BPS), the GDP per capita of Indonesia's population in 2022 increased 14% compared to 2021. The surge in GDP per capita occurs in line with the rise of the national nominal GDP at current prices from Rp 16,976 trillion (about US$1.19 trillion) in 2021 to Rp 19,588 trillion in 2022. At the same time, Indonesia鈥檚 population has gained notable growth. According also to the BPS, the population in Indonesia was 255.58 million people by mid-2015. Seven years later (mid-2022), the population was 275.77 million.
The combination of both in the population and income affects construction industries in Indonesia, particularly the housing sector. Data from the BPS shows that Indonesia saw steady development in the percentage of households with Home Ownership Status. In 2020, only 80.10% of Indonesian families were able to own houses. In the year after, the percentage increased to 81.08%. In 2022, it went up again to 83.99%.
Considering the rate at which the country鈥檚 economy is growing, home ownership will inevitably increase, thus also increasing the pressure towards construction industries in meeting society鈥檚 demand for properties and infrastructure. The failure to meet this demand will result in a great deal of issues, particularly if the relevant stakeholders fail to provide environmentally friendly constructions amid the surging effects of climate change.
The UN noted that hotter temperatures, more severe storms, increased drought, a warming and rising ocean, more health risks, poverty and displacement are among the dangerous effects of climate change. Under this circumstance, providing a house that are environmentally friendly, cozy with unheated temperature, stable and rock-solid, have good water management, located in non-flooded area, and, most importantly, affordable to low- and middle-income members of society that dominates Indonesia鈥檚 population, will be the utmost important task for Indonesian constructors.
Unfortunately, among the restraints Indonesian contractors face in the construction industry is its limitations in the expertise and technology required for green construction projects.
Since most Indonesian contractors are small businesses, they lack the expertise in managing and carrying out green projects. Global Business Guide Indonesia, a Jakarta-based consultancy firm, notes that, with only a small portion of Indonesian engineers possessing the required ASEAN Chartered Professional Engineer certificate, qualified human resources are in short supply.
This is not to mention the issue concerning technology mastery and the procurement of such technologies, particularly those related to the establishment of green, ecologically-friendly cities.
According to a report jointly prepared by the Ministry of Energy and Mineral Resources and the Danish Energy Agency, advanced technological and digital solutions have been a constant barrier for the development of cities, buildings and other structures in achieving the country鈥檚 sustainability goals.
The report stated that standards and technical guidelines for the design and construction of energy saving projects in response to climate change and natural disasters are lacking as there are no specific and clear criteria for green urban areas or ecological cities. The problem also extends to energy management and energy labelling for construction works, as well as the assessment and certification of green buildings, green cities, and ecological cities, among other issues.
To discuss more about the topic of construction technologies to achieve carbon neutrality, 糖心 Indonesia (EKONID), supported by the German Federal Ministry of Economic and Climate Change (BMWK) and the German Mechanical Engineering Industry Association (VDMA), will hold a Conference and B2B Meeting on 鈥淐onstruction machinery and building material plants made in Germany鈥�.
Germany is Europe鈥檚 leading construction market and home to Europe鈥檚 largest building materials industry. Through this event, EKONID aims to support Indonesia in realizing its sustainability goals by connecting German know-how in the field of construction and building material plants with Indonesian companies and, potentially, achieve greater results through potential collaborations. To learn more, click here.