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This study discusses the structural transformation of the industrial sector in Indonesia, which has undergone significant changes in the past two decades. This transformation is characterized by a decline in employment in primary sectors such as agriculture, and an increase in secondary and tertiary sectors, such as manufacturing and trade. This study aims to analyze the impact of structural transformation in industry on employment, the influence of structural transformation in industry, and the role of government in industrial transformation. The research method involves secondary data analysis from various sources and case studies. The results show that government intervention, improvement of labor skills, collaboration between sectors, and strict environmental protection are the keys to successful sustainable industrial transformation. The implications of this research lead to more integrated and sustainable policy recommendations to support optimal structural transformation.

Regional economic development is closely related to changes and transformations of economic structures. There are four main aspects of economic development, namely growth, poverty alleviation, economic transformation, and sustainable development from an agrarian to industrial society. In Indonesia, economic development has encouraged growth and changes in economic structure, which are closely related. Structural transformation, namely the transition from the agricultural sector to the industrial or service sector, is a characteristic feature of developing countries. It involves changes in demand, trade, production, and other factors aimed at increasing per capita income and societal welfare. State-controlled industrialization policies have intellectual roots in the 19th century and have been the main strategy in many developing countries, including Indonesia since 1969. This strategy succeeded in shifting the economic focus from the agricultural sector to the industrial and service sectors, which also involved social transformation in addition to transformation. economy. Industrialization is defined as a significant socio-economic change, from a pre-industrial stage with low per capita income to a more advanced industrial stage.

Structural transformation is a process of transition from traditional economic system to modern economic system. Structural transformation is characterized by a shift in labor and investment from the primary sector to the secondary sector and the latter to the tertiary sector. Economic growth accompanied by structural transformation can be achieved by: (1) increasing productivity in each sector and (2) shifting labor from low-productivity to high-productivity sectors. One of the primary sectors in Indonesia is agriculture. Agriculture is an important sector for Indonesia. Indonesia is a country that is undergoing structural transformation the structural transformation of the economy generally from traditional agriculture to the agro-industrial sector and the non-agricultural sector (agribusiness) that creates higher added value (BPS, 2015)

Transformasi struktural pada sektor industri mengacu pada perubahan fundamental dalam komposisi, organisasi, dan operasi industri sebagai respons terhadap perkembangan teknologi, kebutuhan pasar, dan perubahan lingkungan bisnis. Konsep transformasi struktural ini melibatkan proses transformasi yang luas dalam struktur industri yang ada, termasuk pergeseran dalam jenis industri yang mendominasi, perubahan dalam rantai pasokan, dan adaptasi terhadap inovasi baru. Salah satu konsep transformasi struktural yang penting adalah diversifikasi industri. Diversifikasi mengacu pada pengembangan dan ekspansi kegiatan produksi dan bisnis ke sektor-sektor baru. Hal ini dapat dilakukan dengan memperluas portofolio produk atau jasa yang ditawarkan oleh perusahaan, atau dengan masuk ke industri yang berbeda secara keseluruhan. Diversifikasi ini bertujuan untuk mengurangi ketergantungan pada satu sektor atau pasar tertentu, dan menciptakan sumber pertumbuhan baru untuk perusahaan.

Globalization becomes inevitable for almost all aspects of life, especially in the industrial sector. Globalization has brought the industry to experience a structural transformation that focuses on technology. The structural transformation experienced by the industrial sector may have positive and negative effects, not only for the industry itself, but for the surrounding communities and the environment. The research method used in this research is initiative descriptive qualitatively by writing observation written, with data in the form of field notes. Technological advances are tested on the areas of the industry, is; Production, Research and Development / Research and Development (R & D), operational management, logistics and supply chain management, finance and accounting, human resources (HR), marketing and sales, information technology (IT), laws and compliance, and customer service