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Indonesia pushes for MSME support to drive digital transformation

Investing in technology remains one of the top priorities of Indonesia as it aims to fill in the gaps in its key sectors and drive long-term economic stability. To translate this vision into action, the Ministry of Industry renewed its call on government organisations to empower Micro, Small and Medium Enterprises (MSMEs) by holding this year’s Startup Tech Provider 4 Industry event. 

The programme, themed “Having Confidence in Domestic Technology”, was well-attended by government officials and key players in the MSME industry. As in past competitions, participants were judged through several criteria. This year, participants’ products were judged based on e-commerce viability, flexibility and manufacturing efficiency. One of the top five best startups selected during the event is a digital platform that caters to online business and e-commerce solutions, as well as offline to online store consulting services. 

The programme is part of an extensive initiative to implement the Making Indonesia 4.0 roadmap earlier launched by Indonesian President Joko Widodo. Under this blueprint, the government undertakes to improve on its existing digital infrastructure to boost a number of key areas in its economy. One of the ways to foster innovation outlined by this roadmap is through the creation of a healthy ecosystem for tech startups and small industries to encourage them in coming up with new digital programmes. 

By supporting these tech startups, the Ministry anticipates that the development of new technology can be accelerated. Once this vision pans out, these new technological solutions can further propel the country’s digital transformation journey amid efforts to overcome the economic impact of the Covid-19 pandemic. 

Gati Wibawaningsih, Director-General of the Ministry’s Small, Medium and Miscellaneous Industry (IKMA) department, recognized the numerous obstacles that hinder the progress of the MSME sector. One of these, he explained, is limited financial resources and business capital. Unprofessional management is also one of the challenges that small industries face. The Director-General added: “With the various and specific needs of the industry, it is hoped that technology solutions will come from the work of tech startups in the country. Arrangements provide innovation to make it easier for people to build businesses easily and quickly, especially for MSMEs in the industrial era 4.0”. 

This sentiment of the Director-General was shared by Minister of Industry Agus Gumiwang Kartasasmita who stressed that a new era has emerged globally due to the onset of the pandemic. The use of technology has thus become more essential due to social distancing restrictions and work from home setups. The Minister added that this setback can be utilised to instil an innovative mindset in government. Competitions like the Startup4Industry were thus described as catalysts for the formation of an ecosystem that can effectively “bridge the needs of industries and society with Indonesia tech providers”. 

According to the e-Conomy SEA 2020 report, Indonesia’s digital economy climbed by 11% in 2020 from the same period last year, on the back of a steady increase of 37% in consumer use of digital technology. A big portion of people who have shifted to digital technology is seen to still use these services in the future. 

The Ministry of Industry joins a host of government agencies in Indonesia that have adopted innovative solutions to streamline operations. During its 2021 Development Outlook Webinar, the Ministry of National Development Planning highlighted the need to zoom in on digital transformation next year in order to shore up economic activity. As reported by OpenGov Asia, 2021 will be the first year of economic recovery not just for Indonesia but for economies across the globe. Hence, there is imperative to adapt quickly to digital innovation. 

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