President Joko Widodo has repeatedly conveyed directions to stakeholders regarding the acceleration of the digital transformation of Indonesia's micro, small and medium enterprises (MSMEs). The government targets 30 million MSMEs to enter (onboard) the digital ecosystem by 2024.

The Ministry of Cooperatives and SMEs noted that 19.5 million MSME players or 30.4 percent of the total MSMEs have been present on the e-commerce platform until June 2022. Therefore, the government continues to encourage the creation of new economic value to bring MSMEs in the digital ecosystem, accelerating the availability of one million MSMEs on the government's goods and service procurement platform, and prioritizing the use of domestic products.

The Bangga Buatan Indonesia (Proud of Indonesian Made product/BBI) movement is part of the efforts on promoting the use of domestic products, especially MSMEs, one of which is through digital platforms.

Minister of Cooperatives and SMEs Teten Masduki stated that the digital economy is very closely related to the use of digital aspects by the business processes of MSMEs and cooperatives. "It is recorded that 86 percent of MSME players depend on the internet to carry out their business activities, 73 percent have accounts at digital marketplaces, and 82 percent promote via the internet," he said, in a side event of The Business G20 (B20) Indonesia titled Digital Economy to Support SDGs which broadcast online in Jakarta, Monday, 8 August.

The Ministry of Cooperatives and SMEs noted that MSMEs had contributed 61 percent of the national gross domestic product (GDP). That way, SMEs have an important role in Indonesia's digital economy map. The adaptability of MSMEs that have transformed during the pandemic has proven to be a key factor in MSME resilience in Indonesia.

"A study by the World Bank states that 80 percent of MSMEs that have been present in the digital ecosystem have better resilience during the pandemic," said Teten.

Youth Segment

The digital transformation of Indonesian MSMEs is a necessity in the era of digital disruption at the end of the Covid-19 pandemic. With the potential for a demographic bonus, young people are now the digital players as well as the biggest platform consumers. Every year, the growth of the digital economy in Indonesia and the region is always increasing, which is triggered by the youth segment.

Indonesia as the holder of the 2022 G20 Presidency encourages digital transformation to elevate MSMEs as a global recovery solution and to put it on the priority agenda. As a concrete step, at the B20 Indonesia 2022 forum in Bali on 8 – 9 August, the Ministry of Cooperatives and SMEs also facilitated 12 leading startups that had been curated to participate in the startup showcase in the G20 side event.

The 12 startups consist of 10 startups that have been curated through the 2022 Entrepreneur Financial Fiesta (EFF) event and two disability startups as a form of taking sides with people with disabilities. "This shows the active role of the Ministry of Cooperatives and SMEs in facilitating the startups to grow, develop, and go global," said Deputy for Entrepreneurship at the Ministry of Cooperatives and SMEs Siti Azizah.

In the startup showcase event, the selected participants will present the products they created in front of all invited guests. Later, the selected startups will conduct a business presentation (pitching) with 39 venture capital from within the country and abroad.

EFF 2022 is an initiation of networking for entrepreneurs based on technological innovation as a form of empowerment and development of MSMEs by directly targeting startups in seven strategic sectors of agriculture (agriculture), fisheries, education, health, tourism, maritime, and logistics.

The registration for EFF 2022 has been open since 16 – 15 June by attracting 1,026 applicants. At the curation stage, 20 startups were screened, then continued until the top 10 were selected to participate in the diagnosis and training matrix.

The 10 selected startups participating in EFF 2022 are Bengkel Mania, Automa Supply Chain which is a supply chain collaboration platform, INSPIGO to improve the lives of young professionals through inspiration and knowledge. Then, DotX which helps low to middle income workers build financial security, AturKuliner which is engaged in helping culinary businesses in controlling profits, Surplus Indonesia which is a food rescue application, PT Solusi Kerah Byru to improve competence and expertise for informal workers, Nectico which has supported more of 700 digitalized cooperatives, Kukerja to facilitate recruitment, and Bangbeli which serves as an enabler for MSMEs.

The Ministry of Cooperatives and SMEs also facilitated two start-up companies for people with disabilities. The first is Hear Me, a social startup that provides translation and sign language interpretation technology to bridge communication between deaf and hearing friends. Second, Accessive.id which is a start-up company that provides an application platform to find accessible places for people with disabilities.

Through this event, it is expected to increase the number of MSMEs digitally transforming so that they can increase access to local and global markets.

Writer: Kristantyo Wisnubroto
Editors: Ratna Nuraini/Elvira Inda Sari/Penny P. Rusman
Translator: Irvina Falah