Unlocking economic growth: Circular bioeconomy implementation and the role of forestry industry

¹ Research Center for Behavioral and Circular Economics, National Research and Innovation Agency, Jl. Jendral Gator Subroto No.10, Jakarta 12710, Indonesia.
² IPB University, Faculty of Forestry and Environment, Department of Forest Management, Jalan Ulin, Kampus IPB Dramaga, Bogor, West Java 16680, Indonesia.

Abstract

The circular bioeconomy is increasingly recognized as a strategy to tackle natural resource constraints and environmental degradation. This paper examines the prospects of applying circular bioeconomy principles to drive economic growth in Indonesia's forestry sector. Using both quantitative and qualitative data, the study analyzes the sector through upstream, midstream, and downstream value chains. The findings indicate that integrating these principles can boost economic growth by fostering industrial development, innovation, added value, and job creation. In the upstream chain, sustainable forest management, planting, and conservation activities ensure raw material availability and create employment opportunities. The midstream chain sees the growth of creative industries focused on waste processing and logistics, driving innovation, added value, and job absorption. Downstream activities, such as repair, maintenance, refurbishment, upcycling, and rental services, also contribute to economic growth. For further economic development, the study highlights the importance of exploring technology-based activities like biorefineries and innovative product development. This integration at various stages of the value chain demonstrates that a circular bioeconomy can significantly contribute to sustainable economic growth in the Indonesian forestry sector.