THE 2021 NATIONAL BUSINESS COMPETITION INDEX INCREASES.

Jakarta (22/11) – Research Team of CEDS-Universitas Padjadjaran (Padjadjaran University) announces that the 2021 business competition index in Indonesia has increased as compared to that of the previous year. This figure increased from 4.65 to 4.81 out of a maximum scale of 7. This shows that the level of business competition in Indonesia is improving, despite the Covid-19 pandemic. The said result was presented by Prof. Dr. Maman Setiawan, S.E.,M.T., a Professor of Padjadjaran University concurrently serving as the Head of the 2021 Business Competition Index Team at a virtual meeting with the media in Jakarta today. The meeting was also attended by Bhima Yudistira from the Center of Economic and Law Study (CELIOS) and Mulyawan Ranamenggala, Economic Director of ICC.

Business competition index constitutes an indicator of the level of business competition in the economy and has been included in the 2020-2024 National Medium-Term Development Plan (RPJMN) wherein the National target for Business Competition Perception Index is 5. The index developed by Indonesia Competition Commission (ICC) and CEDS-Padjadjaran University since 2018 constitutes an annual perception survey towards the government, business people, and the public conducted in 34 (thirty-four) provinces. The purposes of this survey are to pay attention to public perception of the level of business competition and to determine various matters that need to become the concern of the government and ICC in addressing business competition issues in the future. There are 7 (seven) dimensions in the survey, namely structure, behavior, performance, demand, supply, institutions, and regulations. The said various dimensions are in line with the concept of industrial economy for development index. The weighting is done using equal weight analysis and principal component analysis.

Based on the survey results, a conclusion is drawn that there has been an increase in the index value from 4.65 in 2020 to 4.81 in 2021. Almost all the dimensions show an increase. The biggest increase transpires in the institutional dimension. This means that business competition regulations and institutions have developed quite significantly as compared to last year. Accommodation, food, and beverage sector; wholesalers and retailers; as well as financial services and insurance remain the three sectors with high business competition intensity as in the previous year. Mining; water supply and waste management; as well as electricity and gas also still constitute the sectors with a low level of business competition.

The increased business competition index is valued positive for the economic development of Indonesia especially during the post-Covid-19 economic recovery period. The results of this business competition index will serve as a reference for the focus of supervision at ICC, both at central and regional levels. For that reason, ICC will continue deepening the said finding and tailor it to become a strategy within the competition authority. In addition to the above, it is also important for ICC in the future to analyze business competition index in the digital business sector given that the digital industry is one of the capital-intensive industries.