Jakarta – MSMEs are still the backbone of the Indonesian economy. For this, the government is expressing appreciation MSMEs.
„Amidst the threat of recession, MSME players determine the national economy and play an important role in Indonesia’s economic growth. This is because this MSME group has a large number compared to other business segments,” said the Director of Digital Economy. Boni Budjiando of the Ministry of Communications and Information wrote in a statement, Jakarta, Sunday (3/2/2023).
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Based on data from the Investment Coordinating Board (BKPM), MSMEs contributed 61.97% of the total national GDP or GDP equivalent to IDR 8,500 trillion in 2020.
„MSMEs absorbed 97% of the workforce in the same year. The role of MSMEs is so important that governments in various regions always try to accommodate and support the development of MSMEs,” he explained.
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“As the driving force of the economy, MSMEs are various business units ranging from travel vendors to home industries,” he continued.
Boni explained that in an effort to build the people’s economy, the President of the Republic of Indonesia, Joko Widodo, has issued guidelines to develop and modernize cooperatives to promote MSMEs.
Earlier, the position of local MSMEs declined in the first two years of the Covid-19 pandemic, i.e. 2020-2021.
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Based on a survey by UNDP and LPEM UI that included 1,180 respondents from MSME actors, the results showed that more than 48% of MSMEs experienced raw material problems during that time, 77% saw their income decrease, and 88% of MSMEs experienced a decline in production. Demand and 97% of MSMEs have also experienced decline in asset value.
Boni believes that MSMEs can tap into the digital market, though it will not be an easy task. There are many barriers that hinder the growth of MSMEs in the digital market.
First, limited ability to adopt digital technology and digital literacy skills of MSME players. Digitization of MSMEs is more than creating products through online marketing to expand market share, but also the mindset to use digital technology.
Secondly, related to financing, there are still many MSME players who have not been able to organize their accounting and financial management reports in a truly digital manner.
Third, from a manufacturing perspective, the desire to expand a digital-based export market is often constrained by MSMEs’ ability to meet the desired product standard.
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Fourth, another factor inhibiting digital economy activity, particularly for MSMEs, is that regulations and procedures in cross-border business are complex, costly and time-consuming.
„Future challenges for MSMEs include innovation and technology, digital literacy, productivity, legal or licensing, financing, branding and marketing, human resources, standardization and certification, equitable training, training and facilitation. As well as a single database,” he said.
Hence, by 2023, apart from digital technology assistance, business incubation will be undertaken for 100 MSME players who already have digital capabilities in marketing their products.
The Directorate of Digital Economy of the Ministry of Communications and Information presents awards as a form of government appreciation to micro, small and medium business actors who have contributed to the national economic development.
His party is also organizing the Level Up MSME Assistance and Facilitation Program 2023, with the aim of encouraging MSMEs to use digital technology to increase access to marketing and capital, develop efficient and effective business processes, increase competitiveness and innovation, and increase revenue. of MSME players. The ultimate goal in implementing this activity is to have an MSME champion with products made in Indonesia that can contribute to other MSMEs in the region and nationally.
Business assistance activities are undertaken for MSME players to increase capacity and capabilities of MSME businesses to promote increased sales transactions for MSMEs.
