The Strategic Role of the Jamu Industry in the National Economy 2025

The study shows that Indonesia’s jamu industry has a strong cultural foundation and stable market demand but has not yet generated significant economic impact. Survey data from 138 jamu producers and interviews with stakeholders indicate that consumer loyalty toward traditional herbal products remains high, demonstrating that jamu continues to play an important role in everyday health practices. However, the industry faces structural stagnation. Most businesses operate on a small scale with limited technology and minimal innovation, which slows income growth and keeps productivity low. Labor conditions are also largely informal, offering limited welfare improvements and restricting long-term development of the sector. Economically, the value added produced by the jamu industry remains modest. Low productivity and limited industrial expansion mean its contribution to national GDP and tax revenue is still small. Production and market activity are concentrated in certain regions, while other areas with potential remain underdeveloped. The industry is also strongly influenced by gender dynamics, with many businesses run by women in household-scale operations. While this reflects traditional knowledge, it also reveals barriers such as limited access to capital, training, and networks. Overall, the main challenge lies in weak value chain integration, limited innovation, and insufficient policy support. Strengthening these areas could help transform jamu into a stronger national industry