Technological progress drives significant growth in Indonesian food manufacturing industry.
The study analyzed the productivity growth of the Indonesian food manufacturing industry from 2000 to 2006. They found that technological progress was the main driver of growth, with an average annual productivity growth of 1.25%. Technical change played a bigger role in productivity growth compared to technical efficiency change, with an average annual technical change of 6.65% and a negative technical efficiency change of 1.78% per year. This suggests that advancements in technology were more important for industry growth than improving efficiency.