Analysis of Subcontracting in the Construction Industry in Indonesia

Abstract

This paper presents an empirical analysis and justification on collaboration between small and large enterprises through strengthening partnership (subcontracting) in order to strengthen the contribution of the construction sector in the national economy. Some conclusions that can be taken that: (i) the construction of market share inequality can be balanced with application the partnership (subcontracting); (ii) Siding with non-small enterprises/large (mostly foreign entities) will push the capital outflows and reduce the competitiveness of the nation; (iii) Strengthening the supply chain through partnership scenario (subcontracting) on the entire flow of the chain will support the role of small business concerns in seizing the national construction market; (iv) weakness of collaboration patterns can be reduced by setting policies that favor (affirmative) the existence of a small body as part of the construction industry; (v) The construction market continues to increase is not offset by an increase in the construction market of small business entities resulting gap portion of the acquisition capitalization construction. (vi) Policy subcontracting by small business entities will potentially increase the absorption of the construction workforce (value added) and construction GDP in national GDP and consequently increase economic growth as an indicator of the competitiveness of nations.