The Covid-19 pandemic in Indonesia has significantly impacted the national economic sector. An economic growth projection of up to minus 0.4 percent, an increase in the impoverished family to 4.8 million, and a rise in the unemployment rate of 5.23 million indicated the threat of an economic slowdown in 2020.
The contraction that drove the economic slowdown as a result of the pandemic has put pressure on the production, export, tourism, education, household consumption sectors, and last but not least, the MSME sector that has been the driving force of the Indonesian economy so far.
“We all need to realize that the biggest challenge for MSMEs in Indonesia today is transforming towards the MSME ecosystem, which includes producing quality products in line with the demands of the fourth industrial revolution as well as being tough, adaptive to pandemics, and anticipatory to all situations,” said the Deputy Governor of Yogyakarta Special Region, Paku Alam X, while giving a speech at the 2020 MSME National Business Meeting III, Tuesday (8/12).
He said that the master plan for developing MSMEs had been contained in the 2020-2024 Medium Term Development Plan (RPJM). The development includes increasing business partnerships between micro, small and large medium enterprises, enhancing business capacity and access to finance for the entrepreneurs, boosting the creation of business opportunities and start-ups, and optimizing the use of digital technology and industry 4.0.
According to him, collaboration and technology implementation are the keywords for MSME upscaling. MSME players need to look at Jack Ma’s track record with his Alibaba.
“Jack Ma’s philosophy is to form an ecosystem. By empowering others to market, serve, and ensure that they become more prosperous with us. With technological innovation and partnerships that we have agreed with 10 million MSME players, in the end, we can compete with Microsoft and IBM,” he said.
From Jack Ma’s statement, the Deputy Governor concluded that the business world today has pushed competition aside and chosen to collaborate instead. That is a good practice to strive for MSME upscaling in the new world order of Covid-19. MSMEs must have a strong sense of market needs and customer needs.
“Of course, UGM as the institution of intellectual power can support MSMEs by providing marketing strategy tools, marketing forecasts, customer analysis, and formulating product development strategy. We believe that the concept of Nitilaku as a synergy between cultural elements, society, and academia is very potential in supporting the acceleration of MSME upscaling in the new world order,” he added.
The 3rd MSME National Business Meeting in 2020 has a theme Upscaling MSMEs in the New World Order. The activity held by the Directorate of Community Service UGM is expected to be able to encourage the revival of MSME players in the New World Order.
Prof. Irfan Dwidya Prijambada, M.Eng., Ph.D., the Director of Community Service UGM, said that central and regional governments and various other components of society have carried out several massive, structured efforts to restore the micro and small business sector impacted by the Covid-19 pandemic. In this condition, innovation and creativity are the keywords that these micro and small businesses must own.
To restore the national economy, Universitas Gadjah Mada is taking a role in helping to handle, control, and prevent the impact of the Covid-19 pandemic. Directorate of Community Service UGM contributes among the others by shifting the theme of
Community Service Grants into the Covid-19 pandemic handling and organizing various other activities through the KKN-PPM scheme, training, workshop, emergency response, and business meetings.
“With this focus, UGM hopes to help generate innovation and creativity in the community, especially boosting the resilience of the affected micro and small businesses,” he said.
According to Irfan, the era of a new world order serves as a new chapter post the Covid-19 pandemic hit. It has impacted every individual all around the world. The economic sector is no exception, especially for micro, small and medium enterprises in Indonesia.
“The MSME sector once saved the stability of the national economy during the 1998 crisis. MSME is a strategic sector that covers more than 97 percent of the total national business sector, can absorb up to 99 percent of the workforce, and contributes more than 67 percent of the country’s foreign exchange,” he explained.
Even so, said Irfan, the 1998’s impact is different as when the Covid-19 pandemic occurred in March 2020, the business sector that has been most impacted now is the micro and small business sector. Large-Scale Social Restriction Policies (PSBB) and others significantly affect the sustainability of the MSME sector.
“Various constraints in the production, distribution, and marketing processes have implications for decreasing turnover/income of the community. Besides, the decline in people’s purchasing power due to temporary and permanent termination of employment also has implications for lowering the income of the MSME sector,” he explained.
The presence of Adrian Leo H, who engages in the Digital Marketing Business by establishing Berlima Digital Agency, enlivened the MSME National Business Meeting that was held online this time. There was also Tri Suhartini, who founded Ecovivo in December 2017. Ecovivo is a social enterprise in ecology with a focus on empowering women to recycle and use domestic waste to process home gardens to produce organic personal care products.
Author: Agung Nugroho