Lessons from China: Beyond Cheap Labor—Rebranding Indonesia for Global Success

Picture China today: a global technology leader, pacesetter in green energy, and home to some of the world’s fastest-growing consumer brands. Yet not long ago, it was relegated to producing low-cost goods for the mass market—a label Indonesia still struggles to shed. While catering to middle and lower-end “segment B and C” might address immediate local demand, an over reliance on cheap products undercuts Indonesia’s potential for international recognition. The time has come for a strategic pivot: Indonesia must modernize its brand, enhance product quality, and aim for international benchmarks.

Simultaneously, observe Singapore—a resource-scarce city-state that reinvented itself into a world-class healthcare, biotechnology, and technology hub, underpinned by a disciplined, highly educated workforce. If Singapore can elevate its standing, why can’t Indonesia—blessed with a far larger market, abundant natural resources, and youthful demographics?

Below are strategic insights on how Indonesian businesses and policymakers can pivot toward a quality- and innovation-driven economy—one that transcends local price sensitivity and earns global esteem.

1. Raise the Bar: From “Cheapest Option” to “Global Standard”

• Quality as an Asset Many Indonesian firms compete on low cost, believing it’s the only way to win over budget-conscious locals. Yet this model caps potential. By improving quality—investing in advanced materials, R&D, and design—businesses can escape the cycle of competing merely on price.
• Case in Point: High-End F&B and Retail Brands such as Janji Jiwa (coffee) or Greenfields (dairy) prove Indonesia’s capacity to deliver mid- to premium-level products. Imagine replicating this success across fashion, electronics, and beyond.

2. Learn from Singapore: Building a Regional Workforce Hub

• Qualified Human Capital Singapore’s success as a global hub for finance, biotech, and tech is grounded in its world-class workforce. The government invests heavily in education, upskilling, and continuous training to ensure employees can meet rapidly evolving industry demands. Indonesia can follow suit by significantly enhancing technical and vocational training, fostering multilingual capabilities, and bridging skill gaps preventing local talent from competing globally.
• Healthcare & Biotech Singapore became a healthcare leader through stringent quality standards and collaborative research deals with top global institutions. Indonesia, meanwhile, can elevate its medical profile and create local biotech clusters by partnering with universities, global companies, and local firms—upgrading hospitals, labs, and workforce skill sets.
• Attracting Global Talent By creating inviting regulatory and cultural environments, Singapore entices the best minds from around the world. Indonesia’s large population and diverse culture can be an even more powerful draw—if regulations and infrastructure are developed to accommodate foreign professionals and knowledge workers.

3. Invest in R&D and Branding: Going Beyond Basic Manufacturing

• Shift from Assembly to Creation Indonesia’s automotive sector—led by Astra International—evolved from simple vehicle assembly to more advanced manufacturing. However, a genuine innovation leap is possible: designing EVs or cutting-edge tech specifically for local conditions (and eventually for export markets).
• Leverage State-Owned Enterprises (BUMN)Telkom Indonesia?can position itself as a leading telecom innovator, focusing on 5G infrastructure and next-gen IoT solutions.MIND ID (Indonesia’s Mining Industry Holding)?can elevate commodities like nickel into high-value exports (e.g., EV batteries).IFG (Indonesia Financial Group)?has the potential to underwrite risk for large-scale innovation projects, making long-term R&D viable.

4. Adaptive Policymaking: Frequent Tweaks, Long-Term Vision

• Iterative Regulation China’s rapid policy changes—like reining in edtech or adjusting property rules—allow it to seize new opportunities or mitigate risks quickly. Indonesia can do likewise, regularly refining labor laws, foreign investment guidelines, or export policies to adapt to global market conditions.
• Nickel Export Ban: A Blueprint By restricting raw nickel exports, Indonesia nudged global battery makers to invest locally. Similar targeted policies could be used in other sectors—be it healthcare, biotech, or advanced manufacturing—to encourage exports of high-value, finished goods rather than low-margin raw commodities.

5. Rebrand the National Mindset—and the Global Image

• Cultural Shift Moving from “cheapest goods” to “exciting, world-class products” demands a deep shift at the societal and corporate levels. Frequent, high-profile collaborations with international brands can demonstrate Indonesia’s potential, showcasing new technologies or breakthrough design.
• Showcasing Success Stories Stories of local startups achieving biotech milestones or a fashion brand fusing Indonesian heritage with international standards help reshape perceptions of “Made in Indonesia” from a bargain-basement label to a premium marker.

6. Soft Power: Culture, Tourism, and More

• Cultural Exports Similar to how K-Pop boosted South Korea’s presence abroad, Indonesia’s music, films, culinary expertise, and digital content can carve out new markets. Facilitated by state-backed agencies (including?InJourney), creative entrepreneurs can present Indonesia’s cultural richness to the world.
• High-Quality Tourism By elevating infrastructure, refining service standards, and emphasizing sustainability, Indonesia can attract discerning tourists rather than chasing budget travelers alone. Resorts, medical tourism, and eco-tourism could become premium draws—cementing Indonesia’s reputation for high-quality experiences.

7. Playing to Win: Strategic Steps for Business Leaders and Government

1. Commit to R&D Dedicating 5–10% of revenues to research can accelerate breakthroughs, as Huawei’s example shows.
2. Reward Value, Not Just Volume Incentives or tax breaks for companies innovating in higher-value products encourage them to go beyond “segment C” consumers.
3. Create a Welcome Mat for Talent Like Singapore, ensure industry-specific regulations, infrastructure, and cultural openness to attract top foreign experts—while also upskilling local talent for advanced roles.
4. Develop a Global Brand Mindset Don’t shy away from international showcases or partnerships. Exporting refined goods and services with “Made in Indonesia” can redefine global perceptions.
5. Reform Education to Spur Innovation Streamline curricula at vocational schools, universities, and polytechnics for budding specialties like biotech, renewable energy, AI, and advanced manufacturing.

Conclusion: Embracing the Future, Elevating Our Standards

Indonesia has an immense opportunity to transcend the “cheap labor” stereotype and become a high-value player in global markets. Learning from China’s evolution—from mass-producer to world-changer—and from Singapore’s trajectory as a vibrant regional workforce hub, Indonesia can harness its vast population, natural bounty, and cultural diversity to forge a future focused on innovation and quality.

This isn’t merely about chasing export revenue; it’s about building a lasting reputation for excellence. If local industry remains stuck in the low-cost gear, foreign alternatives—especially from China—will dominate. By focusing on developing world-class skill sets, investing deeply in R&D, and amplifying homegrown success stories, Indonesia can transform itself into a modern economic powerhouse. The possibility is real, and the time to act is now.

Authored by Kwan Harsono , Founder and CEO at Bedrock Asia | Next-Gen Brand Consultancy . Drawing upon both personal experience in the USA and Southeast Asia and insights from Keyu Jin’s “The New China Playbook: Beyond Socialism and Capitalism.”