February 23, 2024

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Digital Trading, MSMEs Boost Indonesia’s Digital Economy

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The Ministry of Communication and Information Technology of Indonesia’s most recent initiative is the Digital Technology 4.0 Adoption Programme for MSMEs, which is a long-term assistance programme for MSME producers in the processing sector in 13 priority areas -a part of their digital transformation promotion for Micro, Small, and Medium Enterprises (MSMEs).

North Sumatra, Bangka Belitung, Banten, Greater Jakarta and the Thousand Islands, Central Java and the Special Region of Yogyakarta, East Java, West Kalimantan, West Nusa Tenggara, East Nusa Tenggara, Southeast Sulawesi, North Maluku, West Papua, and Papua are among the thirteen provinces.

This programme will be carried out for 6 months offline and online, involving 165 facilitators or local heroes, and implemented in 15 Training Centre locations spread across 13 priority areas.

– Johnny G. Plate, Minister of Communication, and Information

To support the MSME assistance facility, a starter kit in the form of a data package will be provided for 30,000 MSMEs for 6 months, equipped with a learning management system and a Point of Sales (PoS) system aggregator application. It is hoped that the MSME digital technology adoption programme 4.0 will result in an increase in the level or scaling-up of MSMEs in terms of digital technology adoption, which is divided into four levels: beginner, observer, adopter, and leader.

The beginner level is designed for MSMEs with limited business, financial, and technological dimensions. The first level is for those who are just starting out with social media. Second, observe or use a marketplace for businesses that have been managed in a relatively modern but low-tech manner. The third category is adopters, which are businesses that have a good level of technology adoption and knowledge but still use traditional business management, such as fintech platforms and aggregators and a Point of Sales system.

Meanwhile, level leaders are companies that have been managed in a relatively modern manner and have a relatively high level of technology adoption and knowledge, such as using Big Data 3D modelling, QR Code, Augmented Reality, or Virtual Reality.

The Minister of Communication and Information explained that this programme is a more intensive version of the MSME go digital or digital onboarding programme. Through this sustainable assistance facility, it is hoped that MSMEs in the manufacturing sector will be able to increase their access to marketing, income, the competitiveness of innovation, as well as the efficiency and effectiveness of their business operations, allowing them to advance to class and contribute more to the economy, particularly during the post-pandemic economic recovery.

As a result, the Minister of Communication and Information Technology believes that commitment to strategic policy support from various parties is required. This includes regional heads, ministries, and institutions, as well as industry support, including both domestic and global technology companies, as well as the national digital ecosystem.

The Role of Small and Medium-Sized Businesses in the Post-Covid-19 Recovery

According to Minister Johnny, the public is currently taking sides and prioritising job creation, and MSMEs are an important node for job creation. The number and qualifications of available jobs, as well as the quality of the jobs themselves.

“To be carried out in a sustainable manner, because our national MSMEs are very large and the foundation of our national GDP rests on MSMEs, which contribute more than 97% of jobs,” he said. This was demonstrated by the consistent increase in the contribution of the digital economy to Indonesia’s GDP.

In 2019, the contributions of the new digital economy were around 2.9%, rising to around 4% in 2020, and they are collaborating to make the digital economy’s contribution to GDP in 2030 around 18.8%. Joint efforts to gradually increase the digital economy’s contribution to the gross domestic product from year to year continue to increase and will significantly contribute to Indonesia’s GDP.


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