The small-scale factories of Tangerang offer an illustrative case of a structural disconnect from the upper layers of Indonesia's evolving digital economy---specifically Layer 3 (Digital Market Platforms) and Layer 4 (AI-Driven Economic Systems). While productive and locally embedded, these enterprises operate in a parallel modality, largely insulated from the technological infrastructures that are driving economic narratives and policies at the national level.
1. Absence from Layer 3: Digital Platform Economy
Lack of E-commerce Engagement
 Despite being producers of physical goods, most of these factories do not sell through online marketplaces such as Tokopedia, Bukalapak, or Shopee.
Their clients are typically offline B2B buyers, repeat customers, or personal contacts.
Payment Systems
Cash transactions remain dominant. QRIS, e-wallets, and digital invoicing are rare or used only personally (e.g., by owner for personal expenses), not as business infrastructure.
This effectively limits their data traceability, which is a prerequisite for inclusion in digital economic planning.
Logistics Disjunction
Distribution relies on manual routing, freelance drivers, or personal delivery rather than being integrated into smart logistics platforms like Gojek/Grab/Kurir API systems.
This further widens the gap from marketplace visibility and real-time supply chain feedback systems.
2. Absence from Layer 4: AI-Integrated Economy
No Formal Digital Footprint
These businesses often do not register on AI-based credit scoring systems, supply-chain optimization algorithms, or business intelligence platforms.
From an AI system's perspective, they don't exist---they are data-invisible.
Limited Data Generation
Without digitized accounting, sales, logistics, or HR systems, there is minimal structured data that can be mined or modeled for optimization, investment decisions, or inclusion in productivity metrics.
No Algorithmic Interaction
Unlike digital-native enterprises whose operations are intertwined with algorithms (e.g., ride-hailing demand prediction, dynamic pricing, platform ranking), these factories are not participants in algorithmic economies.
As a result, their operations are excluded from AI-enhanced opportunity structures, such as automated procurement, AI-based product recommendation, or targeted policy interventions.
Systemic Implication
This disconnection is not merely a technological lag, but a reflection of institutional and epistemological exclusion:
Economic actors who are not legible to the datafied economy are structurally under-served.
Policies based on digital data may systematically overlook productive sectors that are non-digital, leading to misallocation of subsidies, credit, and development programs.
Reframing the Narrative
Contrary to conventional development models that push for vertical "graduation" from informal to formal, or analog to digital, the 4-Layer Asymmetric Economy Model emphasizes the need for:
Horizontal interconnectivity, not forced linearity.
Digital intermediation mechanisms that can make such Layer 1--2 actors visible and valuable without full absorption into platform or AI logic.
Pluralistic economic legitimacy, where different modalities of productivity are acknowledged and supported based on outcome, not merely digital traceability.
C. Effects on Productivity, Wages, and Market Access
