Endang Mulyani, Jakarta – Indonesia is entering a critical decade that will determine whether it can fully capitalize on its demographic bonus or risk aging before achieving broad prosperity. Marketing consultant and retail association Hippindo Board Expert Yongky Susilo described the next ten years as a "non-negotiable turning point" for the nation's economic trajectory.
"The risk is clear: if Indonesia fails to boost productivity, create jobs, and strengthen savings now, it could 'get old before it gets rich,'" Yongky said at the Indonesia Business Outlook: Mapping The Battleground 2026 event held at the Indonesia Convention Exhibition (ICE BSD) in Tangerang, Banten, on Friday.
At present, Indonesia's working-age population (ages 15-64) accounts for roughly 68.2% of the total population, or about 195 million people in 2025.
Challenges remain despite a drop in unemployment to 4.74% in November 2025. Young Indonesians are most affected, with 16.26% of those aged 15-24 unemployed, the highest among all age groups. Out of a labor force of 155.27 million, about 7.35 million remain unemployed, slightly down from August 2025.
Indonesia's total fertility rate (TFR) stands at 2.1 children per woman, near the replacement level that stabilizes population growth without migration. Life expectancy in Indonesia is about 71.6 years, meaning people are living longer and contributing to a growing elderly population. T
This trend, combined with slower fertility, will gradually narrow the demographic bonus. The country's total dependency ratio – the number of dependents aged 0-14 and 65+ per 100 working-age adults – is currently around 46.6%, according to data from populationpyramids.org. Projections suggest the ratio will remain favorable through 2028-2031 before climbing toward mid-century as the elderly population expands.
Comparisons with Japan and South Korea underscore the stakes: nations that successfully leveraged their demographic windows enjoyed decades of sustained growth, while missed opportunities made adjustments far costlier.
Businesses are already responding to the challenge. The manufacturing and service sectors face pressure from global supply chain shifts, rising costs, and technology-driven competition. Experts emphasize that innovation, market engagement, and brand development are essential to maintain competitiveness and unlock the potential of the country's large labor force.
Structural reforms are equally urgent. Yongky points to regulatory bottlenecks, such as the need for up to 91 permits to open a single store, which add costs and limit entrepreneurship. Streamlining licensing, reducing operational costs, and strengthening ease of doing business are key to turning demographic potential into tangible growth.
Source: https://jakartaglobe.id/business/indonesia-faces-decisive-10year-window-to-leverage-demographic-bonu