This article reviews the use of medicinal plants in Indonesia, the development of the medicinal plant industry, and its role in the process of industrializing medicinal plants. The review was carried out using the Preferred Reporting Items for Systematic Review and Meta-Analysis Protocols (PRISMA-P) method by including the criteria for original articles and reports. Searches were done on Google Scholar, Proquest, Pubmed, Science Direct, and Springer websites. The key words employed for the search included economic development, industrialization, leading sectors, medicinal plants, and modernization. The inclusion and exclusion criteria was based on duplication, redundancy, method and quality of the article. In the search results of the selected article database, 71 out of 300 articles and reports were included in the criteria. According to the findings of this systematic review, the industrialization of medicinal plants represents an opportunity to alter regional and national economic structures. Industrialization of medicinal plants is a process of modernizing medicinal plant commodities which aims to increase the added value of all economic sectors with the manufacturing sector which are interrelated. The industrialization of medicinal plants is marked by the development and improvement of superior medicinal plant commodities as the leading sector of the regional and national economy. Industrialization of superior medicinal plant commodities can change the economic structure by increasing the contribution of the industrial sector to consumer demand, increasing Gross Domestic Product (GDP), increasing export value and availability of employment opportunities as well as increasing long-term economic development and increasing income per capita, to ensure equal distribution of welfare for farmers and the community. Industrialization of medicinal plants can increase the added value of medicinal plant commodities, increase consumer demand, increase the value of GDP, increase the value of exports and employment, increase the potential for domestic and foreign demand, encourage the development of the domestic and foreign industrial sectors, expand employment opportunities, reduce dependence on imports, and increase the country’s foreign exchange. Economic development oriented toward the medicinal plant industry is the right industrialization strategy for Indonesia. Key words: Economic Development, Industrialization, Leading Sectors, Medicinal Plants, Modernization
