Working Together in the Digital Era, the Government is Ready to Digitalise 59.4 Million SMEs

Minister of Communication and Informatics Rudiantara targets eight online SMEs in 2019 (Picture from Antara)

The Minister of Communication and Informatics, Rudiantara, said that Indonesia’s uniqueness is working together with the nature of its people. What does working together look like in the digital era like today? He explained it by way of the economy, with each person bringing their production tool to the table. 



“For example, Gojek with its partners. Gojek has the application, drivers have the motorcycle. They are working together towards shared profit, through the sharing economy ,” said Minister Rudiantara at Smart Citizen Day, late March 2019 in Jakarta. 



Working together can be used to develop Small Medium Enterprises (SMEs/UMKM) in Indonesia. By collaborating, Rudiantara firmly believes that digital technology will generate opportunities for emerging businesses. He gave an example of Tokopedia and Bukalapak applications, helping small businesses to market their products without having to own physical stores.  


That is why the Ministry of Communication and Informatics, along with the Ministry of Cooperatives and Small Medium Enterprise promote 59.4 SME actors to use digital market services through the UMKM Go Online program. From the total number of existing SMEs, less than 10 percent are participating in online shops. Rudiantara targets 8 million SMEs to be transformed into a digital technology application at the end of 2019.  



The UMKM Go Online Program provides the opportunity for these SMEs targeted to be made online to receive a large amount of People’s Business Credit (KUR) within 1 x 24 hours, mentoring in State-Owned Corporation Creative House, inclusive finance, and faster issuance of Tax Identification Number (NPWP). These SMEs will also be assisted from the process of going online, to online management and promotion.



“The government’s duty is to provide regulations by reducing impeding regulations and accelerating positive ones in order to scale up small businesses,” said Minister Rudiantara at Smart Citizen Day event. 



To achieve this target, Rudiantara said that the Ministry of Communication and Informatics is preparing Information and Communication Technology (ICT) infrastructure to establish connectivity between entrepreneurs and buyers. One way of doing so is the Palapa Ring program or the project to develop optic fibre as long as 36 thousand kilometres. Infrastructure development is also intended to improve the quality of small businesses located at the terluar (outermost), terdepan (frontline), and tertinggal (underdeveloped) regions (3T).



Expanding internet infrastructure and strengthening small businesses through this UMKM Go Online are positively welcomed by the Co-Founder and Vice Chair of Tokopedia, Leontinus Alpha Edison. He said that micro business owners are having difficulties developing their business due to the lack of access to buyers. They need a large capital to access customers by travelling to the city.



“If internet infrastructure is established, SME owners in remote areas can use the technology to expand their business without leaving for the city,” said Leontinus.



After developing their business online, small entrepreneurs can map the market and learn the character of their buyers. The founder of a concept store, The Goods Dept, Anton Wirjono, said that SMEs need to pay attention to their online shop visitors to learn the needs of prospective buyers and improve what is lacking with their products. 



“So, not only do we have to care about buyers, but also visitors who do not buy our products. Digital technology assists with matchmaking between the needs of prospective buyers and the goods we want to sell,” stated Anton. 



The Coordinating Minister for Economics, Darmin Nasution, said that another strategy to strengthen digital SMEs other than infrastructure development is to improve the digital human resource. This capacity building is useful to create markets and producers in the digital sector. 



“Curriculum at vocational schools should be adjusted with the needs of the digital era, so that not only it will produce workers in line with market needs, but also entrepreneurs opening job opportunities,” said Darmin.



Social Entrepreneur based on Application



The Coordinating Minister for Economics, Darmin Nasution, said that the use of communication technology brings changes in economic activities for the poor, promoting inclusive job opportunities. Darmin provided an example of RegoPantes application for farmers and Aruna for fishers, which cuts the long distribution chain to earn a greater profit.



“These applications are priced appropriately, promote product standardization, improve the skills of farmers or fishers on digital technology, and convene with buyers,” said Darmin. 



RegoPantes and Aruna are examples of digital application-based social enterprise. RegoPantes was launched by the Central Java Government to counter middlemen harming the farmers. Meanwhile, Aruna application purchases fishers’ products with higher prices and reduce dependency from loan sharks. 



The founder of disability empowerment business Thisable Enterprises, Angkie Yudistia, said to have been preparing an application for people with disabilities. All this time, Angkie has been running her business offline. For example, Angkie is directly collaborating with Go-Life to absorb people with disabilities to be employed under Go-Massage, Go-Glam, Go-Auto, and Go-Clean. 



The success of Thisable Enterprise in distributing workers with disabilities to various companies is followed by increasing demands for the vacancy from people with disabilities in other cities.  



“Therefore, we are conducting large scale recruitment and training in 10 major cities, such as Surabaya, Semarang, Bandung, and other cities,” said Angkie.



A worker with disabilities not from large cities are having difficulties in participating in Thisable Enterprise’s recruitment. This is why Angkie created a digital application to help people with disabilities to obtain job information. 



Digital technology is proven to help develop SMEs and strengthen social enterprise. Considering its potential to promote inclusive job creation, one crucial policy challenge is finding a way to continue to develop SMEs and social enterprises in Indonesia.



The Ministry of National Development Planning/National Development Planning Agency (Kementerian PPN/Bappenas) will be holding Indonesia Development Forum (IDF) to answer the challenge of developing SMEs and social enterprises in Indonesia. IDF 2019, which will be held on July 22-23, will be themed “Mission Possible: Seizing the Opportunities of Future Work to Drive Inclusive Growth.” The deadline for proposal submission has been extended. Send your ideas before April 26, 2019!