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SME and Entrepreneurship Policy in Indonesia 2018

image of SME and Entrepreneurship Policy in Indonesia 2018

SMEs play an important role for economic growth and social inclusion in Indonesia. Based on data from the Ministry of Co-operatives and SMEs, Indonesian SMEs account for nearly 97% of domestic employment and for 56% of total business investment. 

Indonesia has a Micro, Small and Medium Enterprise (MSME) Law and a specific ministry dedicated to co-operatives and SMEs. The wealth of public programmes for SMEs could be streamlined, and more could be done to support innovative companies able to generate productive jobs and participate in international markets. The development and implementation of an SME strategy would be instrumental to improve the overall coherence of national policy measures, objectives and measurable targets. 

The review of SME and entrepreneurship policy of Indonesia is part of a peer-reviewed series, by the OECD Working Party on SMEs and Entrepreneurship, which aims to improve the design, implementation and effectiveness of national SME and entrepreneurship policies.

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Business development services for SMEs and entrepreneurship

This chapter assesses the system of business development services (BDS) in Indonesia. It presents information on the demand for such services by small businesses, describes the evolution and current offer of BDS in Indonesia, and analyses in detail the recent initiative of the Integrated Business Services Centres for Co-operatives and SMEs (PLUT-KUMKM Centres). There are currently a large number of BDS programmes run by different ministries in Indonesia. The Ministry of Co-operatives and SMEs is working to improve the standardisation of BDS and to consolidate the supply of BDS nationwide through the PLUT-KUMKM Centres. This initiative can help rationalise the offer of government-supported BDS, especially if it succeeds in building further synergies with other existing similar programmes.

English

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