Indonesia’s Growing Economy Fuels Security Boost

Indonesia’s booming economy is making it a global player, and its security industry is riding that wave. With strong demand from both the government and private sector, the country’s security market is poised for continued growth.

Indonesia has seen impressive economic expansion, with GDP growth of 5.31 percent in 2022 and 5.05 percent in 2023. This robust economic performance is creating a favorable environment for the security industry to flourish.

“This year, Indonesia has become the 7th largest economy in the world, which gives a sense of stability in an uncertain global economy,” said Alfredo Endon, Business Development Manager at PT. Indostar Security. “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.”

While acknowledging potential challenges in the current global market, Endon remains optimistic. “We expect the security market in Indonesia to grow by around 5 to 8 percent this year. Despite obstacles, the ongoing demand for security in key sectors, especially industrials and resources, gives us confidence that the market will continue to expand.”

Sean Conti, Sales Manager for Indonesia at Apollo Security, echoes this sentiment. “The Indonesian security market is growing steadily as it recovers from Covid-19,” he said. “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

The demand for security solutions is coming from both the public and private sectors. The Indonesian government is investing heavily in 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,” Conti explained. “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.”

A major factor driving growth is Indonesia’s plan to relocate its capital from Jakarta to Nusantara. This ambitious project is expected to further boost the country’s security market.

“There are projects being done in the government sector on Indonesia’s new capital. In early 2025, the government approved a budget of approximately US$2.99 billion for the second phase of Nusantara’s development, covering the 2025-2029 period,” Conti said. “Once this phase is done which is primarily for the infrastructure, government buildings and many more essential buildings will be constructed, and I believe other industries will follow. And with more buildings, security systems will be needed which will further translate into a higher growth for the security market.”

The private sector is also contributing to the growth of the security industry, with a growing interest in new technologies like AI.

“The integration of AI into business operations is becoming increasingly attractive to private sectors looking for efficient systems that can also enhance security,” Endon noted. “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.”

“The private sector has been actively purchasing surveillance cameras as it became more and more affordable and easy to use with a broad variety of brands to choose. Housing, villa’s apartments and other residential places have been utilizing smart lock systems and other home automation systems as they are exciting and new, advanced, secure and convenient for the middle and higher income Indonesian citizens,” Conti said. “In general, Indonesian people are becoming aware of the trends and needs of security systems in particular CCTV, advanced door locks and home automation systems. But the same cannot be said of centralized access control, alarms, fire safety, perimeter and others which are still project-based.”