4. Case Observation: Tangerang's Fragmented Factories
A. Description of Small Factories and Local Microeconomy
The city of Tangerang, located within the rapidly urbanizing Jabodetabek metropolitan area, presents a compelling microcosm for observing the disjunctions and asymmetries of Indonesia's layered economy. Despite its proximity to major industrial hubs and international supply chains, a significant portion of Tangerang's productive sector remains anchored in small-scale manufacturing, often operating below the radar of formal economic metrics.
Key Characteristics of Small Factories in Tangerang:
1. Scale and Structure
The majority of observed manufacturing units operate with fewer than 100 workers.
Production spaces are often residential or semi-residential in nature, with makeshift factory setups in converted homes, warehouses, or alley-based workshops.
Legal status is frequently informal or semi-formal---registered only at local neighborhood or sub-district level, lacking full compliance with provincial or national industrial permits.
2. Product Types
These factories produce a wide range of goods, including plastic packaging, spare parts, construction materials, household goods, and garment subcomponents.
Products are often critical support nodes in larger supply chains (e.g., food packaging, footwear accessories), yet their contribution is invisible to most AI-based supply chain optimization systems or national productivity statistics.
3. Operational Modality
Business operations are family-based or kinship-centered, often relying on social trust rather than contracts.
Capital flow is predominantly cash-based, with limited access to formal credit or insurance.
Inventory and logistics are managed through driver-based distribution, informal sales networks, and manual accounting, bypassing Layers 3 and 4 entirely.
4. Market Orientation and Sales
These factories typically do not engage with online marketplaces such as Tokopedia, Shopee, or B2B procurement platforms.
Sales are handled via offline business relationships, often forged over years with other local or regional SMEs.
Most owners and operators have little incentive or capacity to digitalize, despite being productive and integrated in real terms.
5. Technological Interface
Basic production equipment is used, often without digital control systems.
There is no integration with IoT, ERP, or AI-based systems. Even basic QRIS payment tools are rare.
Any form of digital technology adoption (e.g., using WhatsApp for orders, or mobile banking for suppliers) is often done personally, not institutionally.
Implication in the 4-Layer Model Context
In terms of the proposed 4-Layer Asymmetric Economy Model, these factories straddle Layer 1 and Layer 2. They operate with the labor intensity and cash modality of Layer 1, yet are involved in product manufacturing and distribution usually attributed to Layer 2.
However, their absence from Layer 3 (digital marketplaces) and Layer 4 (AI integration) means:
They are structurally disconnected from national narratives of digital transformation.
Their role is underrepresented in productivity discourse.
They are vulnerable to exclusion in policy designs based on algorithmic data visibility.
Conclusion
Tangerang's fragmented factories challenge the notion that industrialization and digitalization naturally evolve in tandem. These units sustain local employment, produce critical goods, and demonstrate economic resilience, but remain outside dominant digital-economic frameworks. They exemplify the layer disconnection and asymmetric visibility that the 4-Layer Economy Model seeks to explain and reformulate.
B. Disconnection from Layer 3 and 4: Platform Economy and AI Integration
