“Accelerating the Digitization of MSMEs in the Context of Economic Recovery as an Impact of the Covid-19 Pandemic”

Friday, 23 July 2021 

The number of MSMEs connected to the digital ecosystem for the previous 8 years until the pandemic, only 8 million business actors have been onboarding. During the COVID-19 pandemic, there has been a tremendous increase. As of May 2021, it is already 13.5 million. So, now the total is 21%.” On the one hand, the COVID-19 pandemic is a “disaster”, but for MSMEs it is a “blessing”, because the number of MSMEs has increased. This increase occurred because during the COVID-19 pandemic, MSMEs interact with their ecosystem and market. This is done by using information technology in this digital era. Therefore, digitization for MSMEs is an effort to accelerate MSME growth which is expected to restore the National Economy.

The COVID-19 pandemic is the right momentum as a “blessing” for Indonesia to accelerate the digitization of MSMEs. Digitalization in the real sense, namely strengthening the resilience of MSMEs in facing a crisis during a pandemic and an uncertain future. Digitalization is expected to anticipate various changes in the future. In addition, ensuring that MSME products become hosts in their own country and are increasingly empowered in the global market. The condition is that the digitization of MSMEs must become the nation’s collective agenda. The Ministry of Cooperatives and SMEs is currently preparing the National Strategy for SMEs and Cooperatives. This policy instrument, which is owned by Indonesia for the first time, will later be able to accommodate the collaborative work of all components of the nation. It is not limited to education, training, and assistance for MSMEs and cooperatives utilizing the digital ecosystem. Operationally, the provision of digital basic infrastructure for MSMEs can be initiated by the government, local governments, or business consortiums, both private and state-owned. On the other hand, the management of MSMEs through a more massive supply chain (supply chain management) can be covered through digitalization, so that from upstream to downstream, from suppliers to customers at the “deliver” digitally will be a source of competitive advantage for MSMEs in running their business. an increasingly “hypercompetitive” and “hyperdynamic” business. One indicator that shows the growth of MSMEs can be seen from economic growth. Of the approximately 64 million MSME population in Indonesia, there are around 64 million and only 13% have been connected to the digital ecosystem. On the other hand, the remaining 87% are offline or all business activities or supply chains from buying, selling, marketing, to payment are still very dependent on physical interaction. Involving more MSMEs into the digital ecosystem is not easy. Apart from having a very large population, generally they also do not have the basic infrastructure to enter this ecosystem. No cell phone, no computer, no credit package or internet and so on.