There has been a rapidly growing demand for small area statistic in Indonesia as the country political system has shifted from centralized to more decentralized system. The demand for reliable statistic in smaller regions such as sub-district area is inevitable as a basis for a good planning and effective decisionmaking processes. The Central Bureau of Statistic (BPS) in Indonesia has put many efforts to meet this demand using direct estimation but there are some instances in which direct estimation fails to produce estimates with the required precision due to the limited number of effective sample size. The increasing demand for small area estimates has motivated the need to develop more reliable methods for producing small area estimates with higher precision compared to the direct estimates. This paper discusses the development of research activities in small area statistic in Indonesia. The discussion includes the importance of small area statistic in Indonesia and research activities regarding models of small area statistic based on BPS data. A brief description of enhancement on model-based indirect estimation on area level small area models is also discussed.