Indonesia has managed to maintain an annual 5% economic growth rate. The national economic target 2045 is to achieve a per capita income of $30,000. This figure is certainly not an easy target, especially since economic growth must also consider the welfare of the people.
“Currently, our income is still at $5,000. This is a fact we need to change; we need entrepreneurs who can drive economic growth and create more productive jobs,” said the Minister of Cooperatives Teten Masduki during a public lecture titled “The Future of the Nation’s Economy” on Friday, Oct. 11, 2024, delivered online at the UGM Faculty of Economics and Business (FEB UGM).
According to Minister Masduki, achieving the economic targets requires maximizing the growth of MSMEs (Micro, Small, and Medium Enterprises).
Approximately 97% of jobs come from informal small businesses with low productivity.
“This challenge must be addressed by strengthening community MSMEs so they can be competitive and absorb more labor,” he stated.
Minister Masduki mentioned that through the ministry, the government is initiating empowerment and support for MSMEs through national universities.
He noted that 500 startups have emerged from one of its programs, called Entrepreneur Hub. He added that initiatives like Entrepreneur Hub are essential for connecting entrepreneurs and investors.
“Certainly, ongoing efforts are needed to strengthen community MSMEs. To enhance their competitiveness, they must have access to innovation, technology, and digitalization,” he added.
Dr. Rocky Adiguna, a business management expert from FEB UGM, explained that improving MSMEs’ competitiveness is challenging due to a lack of interest in business development.
So far, MSMEs face various challenges in growing due to limited access to technology, low digital literacy, and unsustainable profits.
He emphasized the need for an ecosystem to help integrate MSMEs or at least foster their desire to grow.
“We see that MSMEs are more often in survival than growth mode. There are many challenges. Therefore, we need to create an ecosystem, and when MSMEs can be part of that ecosystem, they can access resources beyond their capabilities,” explained Dr. Adiguna.
Siti Azizah, Deputy for Entrepreneurship at the Ministry of Cooperatives, stated that they have initiated programs to boost national MSME growth, including consultations and support for entrepreneurs, entrepreneurship incubation programs, access to capital, and MSME development for export markets.
Azizah says entrepreneurs should not worry about insufficient capital to start their businesses.
The government has special instruments to ensure entrepreneurs have adequate funding, including partnerships with non-bank financiers, angel investors, and crowdfunding.
“Every month, we have a program to connect MSMEs with investors. The current number of startups is 2,400, with about 550 already under our support. We are still pursuing about 200 more startups currently in development,” she explained.
Azizah noted that Indonesia still needs around 4% of MSMEs in the national economy, whereas it is currently at about 3.7%.
She hopes that technology-based and sustainable businesses emerging in society can encourage the growth of new MSME players.
Author: Tasya
Editor: Gusti Grehenson
Post-editor: Lintang
Photo: Inilah.com