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    Small and Medium Micro Enterprises in Indonesia

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    youroseaaa
    Small and medium enterprises in Indonesia face several challenges including limited access to capital and information technology. They also have difficulties accessing wider markets and innovating new products. Partnerships between small and medium enterprises and large businesses are important, but the success of these partnerships depends on shared business ethics and values among the partners. The government needs to address infrastructure, energy supply, licensing processes and taxes that hinder business growth.

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    Small and Medium Micro Enterprises in Indonesia

    Uploaded by

    youroseaaa
    17 views3 pages
    Small and medium enterprises in Indonesia face several challenges including limited access to capital and information technology. They also have difficulties accessing wider markets and innovating new products. Partnerships between small and medium enterprises and large businesses are important, but the success of these partnerships depends on shared business ethics and values among the partners. The government needs to address infrastructure, energy supply, licensing processes and taxes that hinder business growth.

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    Small and medium enterprises in Indonesia face several challenges including limited access to capital and information technology. They also have difficulties accessing wider markets and innovating new products. Partnerships between small and medium enterprises and large businesses are important, but the success of these partnerships depends on shared business ethics and values among the partners. The government needs to address infrastructure, energy supply, licensing processes and taxes that hinder business growth.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    17 views3 pages

    Small and Medium Micro Enterprises in Indonesia

    Uploaded by

    youroseaaa
    Small and medium enterprises in Indonesia face several challenges including limited access to capital and information technology. They also have difficulties accessing wider markets and innovating new products. Partnerships between small and medium enterprises and large businesses are important, but the success of these partnerships depends on shared business ethics and values among the partners. The government needs to address infrastructure, energy supply, licensing processes and taxes that hinder business growth.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    1.

    Small and Medium Micro Enterprises in Indonesia:

    a. Capital Access
    Capital credit provided by the Government is difficult to obtain by small
    businesses. In one side small businessman with limited capital difficult to
    develop. Small traders are difficult to fulfill orders from large entrepreneurs
    because it is difficult in terms of capital. In addition, small businesses find it
    difficult to meet the administration and other banking and security requirements
    that connect them with banks. On the other hand, the system and banking
    situation that has not recovered in Indonesia do not provide flexibility so that
    small businesses can access capital. It is, supported also by the guarantee agency
    and the service institution is less developed and coordinated.

    b. Access information technology


    Information technology is one of the important roles. Most small and
    medium-sized micro enterprises in Indonesia are still faced with constraints
    in limited information and access capabilities to technology sources. In
    addition, there is also weak access to information. The lack of information
    known by small and medium-sized micro enterprises, slightly influences the
    competition of products or services of small and medium business units
    with other products in terms of quality. The effect of this is that it has no
    products and services as a result of small and medium-sized businesses to
    penetrate the export market. However,on the other hand, there are also
    products or services that have the potential to fight in the international market
    because it has no path or access to the market, in the end only circulating in
    the domestic market.

    c. Market access
    The problem that still needs to be noticed by the government is the ability
    of small and medium micro enterprises to access the wider market. The small
    and medium micro businesses in the country still do not have complete
    and detailed information because most of the small and medium micro
    enterprises still do not utilize information technology facilities such as the
    internet, whereas the internet is one of the most effective ways in marketing
    small and medium micro business products.

    d. Products
    Indonesia's small and medium micro enterprises are still weak tehadap an
    innovation, especially product innovation. Infact, innovation is the key to
    winning the competition. For the food sector for example, the packaging of
    food products from Malaysia is much better and in the design is more
    attractive than our products. It can be proven that in supermarkets are
    found malaysian products certified international quality, while our small and
    medium micro business products appear as they are.

    Based on data from the Ministry of Cooperatives and Small and Medium
    Enterprises in 2011, micro enterprises 98.82%, small 1.09%, medium
    enterprises 0.08%, and businesses by only 0.01%. Meanwhile, the sector
    contributes to gross domestic product (GDP). Micro enterprises 29.74%,
    small 10.46%, medium enterprises 14.53% and large businesses reached
    45.27%. This shows that the performance of small and medium-sized micro
    enterprises has not been as expected.

    Although the small and medium-sized micro enterprise sector reached 99.99%,
    its contribution to the national economy was only 54.73%. This condition can
    not be separated from the national competitiveness. The World Economic
    Forum (WEF) ranked Indonesia's global competitiveness index at number 50
    in 2012. Compared to Asean members, Singapore ranks 2nd, Malaysia (25th),
    and Brunei Darusalam (25th). One of the causes is minimal innovation. The
    World Intelectual Property Organization (WIPO) listed Indonesia's global
    innovation index at 100 out of 141 countries, previously at 99th and 125th.
    This position is below Malaysia (32), Brunei (53), and Thailand (57).

    e. Partnership
    Cooperation between companies in Indonesia, in this case between small and
    medium micro enterprises and UB, known as Partnership
    (GovernmentRegulation No. 44 of 1997 on partnerships). The partnership
    must be accompanied by the development of UB to small and medium
    enterprises that pay attention to the principle of mutual need, mutual
    strengthening, and mutual benefit, partnership is a business strategy carried
    out by two or more parties in a certain period of time to achieve mutual
    benefit with the principle of mutual need and raising.

    The pattern of partnership between small and medium enterprises and large
    businesses in Indonesia that has been standardized, according to Law No. 9 of
    1995 on Small and Pp Enterprises No., 44 Year 1997 on partnerships, consists
    of 5 (five) patterns, namely:(1) Plasma Core, (2) Subcontracting,(3) General
    Trade, (4) Agency,and (5) Franchising.

    Partnerships with large businesses are so important for the development of


    small and medium-sized micro enterprises. The key to the success of small and
    medium-sized businesses in crosses in both the domestic and global markets
    is to build partnerships with large companies. With small and medium micro
    business partnerships can export through large companies that are already
    exporters. In addition, partnership is one solution to overcome the gap
    between small and medium enterprises and large businesses. Thus, it can be
    concluded that the growth of small and medium enterprises in Indonesia is
    inseparable from its function as a partner of UB related in a pattern of
    businesspartnerships. The benefits that can be obtained for small and medium
    enterprises and UB that conduct partnerships include (1) increase
    productivity,(2) efficiency,(3) quality assurance, and continuity,(4) reduce the
    risk of loss,(5) provide a fairly high social benerift, and (6) increase economic
    resilience nationally. This benefit can be achieved throughout the
    partnership based on the principle of mutual strengthening, need,and benefit.
    The success of business partnerships is largely determined by compliance
    among partners in carrying out their business ethics. The actors directly
    involved in the partnership must have the basics of business ethics
    understood and embraced together as a starting point in running the
    partnership. In addition, the success of business partnerships depends on the
    similarity of values, norms, attitudes, and behaviors that run such partnerships.

    f. Human Resources
    Human resources small and medium micro enterprises Mostly have low
    educators . Thus, improving the quality of human resources of small and
    medium micro enterprises, becomes its own challenge. Various skills
    exercises, management,and other technical trainings as needed oenting held
    periodic. In the short term, human resources are strengthened with integrated
    mentoring. In the long term, human resource improvement is done through
    early corporate education. Formal education at various levels is given
    entrepreneurial content. The award for best innovation work attracts young
    people to innovate to start a business. The above efforts are expected to
    improve the competitiveness of small and medium-sized micro enterprises.
    However, there are important and fundamental issues that need to be resolved
    immediately by the government, namely poorinfrastructure, limited energy
    supply, business licensing process, and tax policy that become a barrier to
    business growth.

    g. Must Immediately Reform Business Licensing


    Business licenses in our country are still convoluted. In 2012, the World Bank
    ranked the ease of doing business in Indonesia at 128 out of 185 countries. In
    Singapore, the permit to set up a business only takes 3 days, while in
    Indonesia it takes 45 days.

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