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Indonesia’s Trade Ministry sees positive economic impact of digitalisation of MSMEs

The government of Indonesia is banking on the innovation and digitization of micro, small and medium enterprises or MSMEs in its renewed efforts to inject fresh stimulus that can further spur economic growth. 

In a press release, Indonesian Minister of Trade Agus Suparmanto, stressed the big role that integration and digitalisation of MSME processes bring, not just to shore up the nation’s economy but to foster improved economic conditions for other members of the Asia-Pacific Economic Cooperation (APEC). 

The Trade Minister added that “The role of MSMEs in the APEC Economy is increasingly significant for economic growth, improvement trade, employment opportunities, poverty alleviation and increased innovation.” 

More active participation of MSMEs in APEC member states in both regional and global markets is one of Indonesia’s priorities following a directive from the APEC to adopt the Boracay Agenda for Action relating to the globalisation of MSMEs. 

The announcement was made during the recently-held virtual APEC Small and Medium Enterprises (SME) Business Forum with the theme Industrial Chain Cooperation. The session was broadcasted in Shenzen, China. 

Indonesia is one of the member states of the APEC which made up 39%, or 2.9 billion people, of the world’s population in 2019. It also accounted for nearly half of global trade (47%) and constituted 60% of the global gross domestic product. Last year, Indonesia’s contribution to exports was valued at US$ 125.1 billion. 

Product promotion through digital platforms  

As big companies continue to reel from economic beatings brought by restrictions and regulations during the COVID-19 pandemic, small businesses have been the subjects of more massive economic attacks. For this reason, APEC economists are now fast-tracking initiatives to ease the burden of MSMEs in anticipation of healthy and resilient market conditions within the APEC region. 

To ensure sustainability among MSMEs, the Ministry noted the importance of government-led industrial chain cooperation with these small businesses. Through more effective collaboration with the private sector, the Indonesian government can streamline its goal of empowering other sectors of the economy as outlined under its Making Indonesia roadmap. 

The Ministry added that stronger ties with the government, coupled with assistance from large-scale enterprises, MSMEs and even start-ups can play a bigger role as enablers of economic recovery and growth. To this, the Trade Minister added, “In line with our great efforts to adapt and benefit from the economy digital and industry 4.0, Indonesia believes that deepening the involvement of MSMEs will also ensure economic growth”.

One of the goals of the government is to boost the competitiveness of MSMEs by providing them with additional channels where they can have access to financing, sources of raw materials, technology and innovative infrastructure. Assisting these businesses in increasing human resources and upgrading the quality of their products is also part of the government’s agenda. 

Some of the measures the government aims to utilise include a more aggressive promotion of products and services of MSMEs. This, the government believes, can be done through a rollout of campaign activities and even outreach programs. Another avenue that Indonesia is looking at is helping MSMEs penetrate the online retail market through various digital platforms. 

There has been an increased need for many businesses across the globe to shift their gaze to online platforms as a way to leverage their operations following the onslaught of the global pandemic. OpenGov Asia has previously reported that more companies are ramping up digitalisation initiatives and taking cognizance of innovation as a tool for growing a business in a bid to rise from a slump in profits and on a larger scale, help the economy to recover.

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