As the 16th[1] biggest economy in the world and the biggest economy in ASEAN by GDP1, Indonesia is mainly sustained by Micro, Small, and Medium Enterprises (MSMEs), with over 50%[2] of its GDP coming from MSMEs—a fact not so widely known.. Indonesia accounts for the largest number of MSMEs in ASEAN, with almost fifty-eight million[3] established MSMEs which are regarded as the backbone of Indonesia’s economy.

Ministry of Cooperatives and SMEs: Improving MSME competitiveness for MSME sustainability and growth

In today’s complex global economy, MSMEs face challenges to survive and to grow. The Ministry of Cooperatives and SMEs of the Republic of Indonesia, as the main government institution responsible for MSMEs development, has been focusing on improving MSME competitiveness for sustainability and upscaling. In addition, there are at least 24 other ministries and agencies taking part in the development of SMEs in Indonesia, covering various aspects, such as program/policy planning, financial access, market access, data and statistics, education, standardization and certification of product/services, as well as inclusion of the youth, women, and the creative industry in the process.

Indonesia’s Vision for Digital-Savvy MSMEs

With such a vast and large number of MSMEs in Indonesia, the effort to create the best ecosystem for MSMEs to flourish requires support that can link MSMEs with the way today’s market operates, which is through digital platforms. The Ministry of Cooperatives and SME together with the Ministry of Communications and Informatics introduced a programme called “MSMEs Go Online” in November 2017 to facilitate MSMEs to be able to compete in broader markets[4].

Through this programme, the government aims to transform eight million MSMEs to become digital-savvy MSMEs by 2020 by supporting them in joining online market platforms. This programme aims at increasing MSMEs’ digital awareness through activities such as seminars, workshops, and training on MSMEs digitalization and also by providing one million free .id domains which can be used for MSMEs to expand their business through an online platform. In addition, the government has also launched a collaboration with six of the nation’s largest online marketplaces to help promote and sell MSME products to their markets.

To further support transformation of MSMEs into digital-savvy businesses, different government agencies provide other supporting programmes that will better prepare MSMEs to survive the competition once joining the online market, touching on issues such as financial literacy training, product standardization, and also marketing through other means. One example is the Certification, Copy Right, and Trademarks Registration Facilitation programme. This programme aims to ensure that the operational activities and products produced by MSMEs are in compliance with applicable standards, through standardization and certification facilities. The facilities include ISO 9001:2008, SNI, HACCP, Intellectual Property Rights (Copyright and Brand Right), and Halal, with the aim to improve SMEs competitiveness in expanding their markets according to international standards. Other supporting programs include Kredit Usaha Rakyat (KUR)–business loans for SMEs and Ultra Micro Credit for microenterprises, IDX incubator, E-commerce training for youths, Center for Integrated Services of SMEs and Cooperatives (PLUT-KUMKM), exhibition program, and others.

Furthermore, with more MSMEs products available on the online marketplace, the Ministry of Cooperative and SME also provides the opportunity for MSMEs to have their products displayed in premium locations in Jakarta. Through the establishment of SMESCO, an integrated building that combines the concept of a shopping centre with a SME development centre, MSMEs can promote their flagship products overseas through trading house activities and conduct training activities for MSMEs.

The Future-Ready MSMEs

sme-indonesiaPT Zahir International

Zahir International was founded in 1996 in Bandung by Muhammad Ismail. The company was created to help those who need accounting software to create and manage their financial reports easily and quickly. The company has continued to grow and today has its 6th version of its accounting software alongside other supporting business management tools such as Report Server and POS.

“We must keep improving ourselves by keeping up with the current technological trends in consumer behaviour. We need to be specialized and flexible,” says Muhammad. The company provides the tools to efficiently process data and numbers, such as a new tool for data analytics to provide a better insight into the massive information the client has. There is also some complimentary software downloadable from the company website for trial.

Digital marketing is one of its main marketing activities and it has a specialised division. The company tries to maximize the use of SEO, Google Ads, and social media as its marketing tools, to reach out to its target audience.

See the full story and more stories from other ASEAN inspiring MSMEs here


[1] World Bank Data Catalogue (2016)

[2] Bank Indonesia (2015)

[3] National sources (2017)