research demographics

Quantitative Demographics

Gender Distribution
MSMEs
Startup
Total Owners Interviewed:
300
Total Owners Interviewed:
24
Highest Education Attainment
MSMEs
Startup
Total Owners Interviewed:
297
Total Owners Interviewed:
24
Owner's Age
MSMEs
Startup
Total Owners Interviewed:
294
Total Owners Interviewed:
23
Marital status
MSMEs
Startup
Total Owners Interviewed:
299
Total Owners Interviewed:
23
Number of Dependent(s)
MSMEs
Startup
Total Owners Interviewed:
202
Total Owners Interviewed:
22

Qualitative Demographics

Education
Total Owners Interviewed:
12
Gender
Total Owners Interviewed:
12
SEC
Total Owners Interviewed:
12
Industry
Total Owners Interviewed:
12
Size
Total Owners Interviewed:
12
Age
Total Owners Interviewed:
12

Codesign Demographics

Name
No
organisation
position
category
Priority Area 1: How might we support MSMEs to develop strong and up-to-date market and industry knowledge?
1
Olansons Girsang
Office of Industry, Trade, Cooperatives, Small and Medium Business
Head of Industry Development Division
Government Institution
2
Adhitya Pratama Yudhasaput
Office of Industry, Trade, Cooperatives, Small and Medium Business
Head of Small and Medium Enterprise Infrastructure Division
Government Institution
3
Suhono Harso Supangkat
Think20 (T20)
Head of Small and Medium Enterprise Infrastructure Division
Think Tank
4
Sigit Purwanto
Institute for Innovation and Entrepreneurship Development (LPIK-ITB)
Head of Monitoring and Evaluation Division
Think Tank
5
Aufa Doarest
World Bank
Private Sector Specialist
International Organization
6
Timothy Astandu
Populix
CEO
Industry
7
Alam Medina
Governor’s Team for the Acceleration of Development (TGUPP)
Policy Analyst
Government Institution
8
Manael Sudarman
Jakarta Experience Board
Business Director
Government Institution
9
Zidny Ilman
Gojek
Public Policy & Government Relations Jr. Manager
Industry
Priority Area 2: How might we make digitally-empowered growth affordable for MSMEs?
10
Presthysa Nagitha Lestari
Gojek
Vice President, Public Policy and Government Relations
Industry
11
Tauhid Ahmad
INDEF
Executive Director
Think Tank
12
Puji
Bank DKI
SME Division
Financial Institution
13
Teddy Trilaksono
Universitas Prasetya Mulya
Faculty Member
Educational Institution
14
Frida Elizabeth
Office of Industry, Trade, Cooperatives, Small and Medium Business
Head of Creative and Digital Industry Division
Government Institution
15
Emana Fasianti
Office of Industry, Trade, Cooperatives, Small and Medium Business
Head of Creative and Digital Industry Division
Government Institution
Priority Area 3: How might we build the tech talent reservoir to meet the evolving industry demand?
16
Andy Sulasikin
Jakarta Smart City
Government Institution
17
Tendy Gunawan
International Labor Organization
National Program Officer
International Organization
18
Erika Dianasari Go
Alpha JWC
Partner
Financial Institution
19
William Hendradjaja
Skilvul / Impact Byte
Co-founder & Chief of Business
Educational Institution
20
Nursida Yaru
Tokopedia
Senior Public Policy and Government Relations Associate
Industry
Gender Distribution
Total Owners Interviewed:
20
Category Distribution
Total Owners Interviewed:
20
smartchange 2022
MSME ecosystem

Synchronize MSME classification

Policies Involved

Innovation
Ministry of Cooperatives and MSMEs Regulation on MSME Classification

Challenge

While Government Regulation No. 7 of 2021 on the Ease, Protection and Empowerment of MSMEs (GR 7/2021) has expanded the classification of MSMEs, in practice, classification still differs from one program to another, leading to an inconsistent understanding and support. This is exacerbated by the fact that more than 20 ministries and agencies are involved in regulatory policymaking and development of MSMEs1. For example, the classification of MSMEs as understood by Law No. 20 of 2008 on MSMEs was different to that by Statistics Indonesia, the non-governmental institute responsible for conducting statistical surveys, and international organizations such as the International Finance Corporation2 3 4 5.

Current Policy

The Indonesian government had issued GR 7/2021 as an implementing regulation of the Job Creation Law No. 11 of 2020, which amended aspects of MSME development related to Law No. 20 of 2008 on MSMEs. GR 7/2021 states that ministries or institutions may use other criteria to define MSMEs according to each business sector, such as: revenue, net worth, investment value, employment, incentive and disincentive, local content, and/or environmentally-friendly technology application. However, these additional criteria must firstly be considered by the Ministry of Cooperatives and MSMEs6.

Action

Aligning the criteria of what constitutes MSMEs allows the government to better compare the conditions of MSMEs across industries and regions, and helps benefits and support to be better directed. To synchronize MSME classification, ministries or institutions involved in MSME development must first review the current MSME definitions used by each institution. Then, comparative research on commonly understood MSME definitions can inform stakeholders on MSME classifications in other countries that can potentially be used as a reference point. Lastly, ministries and agencies should consolidate the definitive classifications that all parties can agree with. As the leading ministry for MSME development in Indonesia, it is imperative that the Ministry of Cooperatives and MSMEs take the lead in this process.

action points
parties involved
Review the current MSME classification used by each institution
Ministry of Cooperatives and MSMEs
Relevant ministries and government agencies, e.g. Ministry of Industry
Conduct comparative research on commonly understood MSME classifications outside of business capital and annual turnover
Ministry of Cooperatives and MSMEs
Relevant ministries and government agencies, e.g. Ministry of Industry
Higher education institutions, think tanks, or other research organizations
Consolidate the definitive criteria of MSMEs
Ministry of Cooperatives and MSMEs
Relevant ministries and government agencies, e.g. Ministry of Industry

Indicator of Success

Adoption of definition by relevant ministries and agencies
Adoption of definition in MSME development projects or initiatives
previous
Formulate software house incentive plan
next
Measure the effectiveness of MSME entrepreneurship development programs
  1. OECD. (2018). Good Regulatory Practices to Support Small and Medium Enterprises in Southeast Asia. https://www.oecd-ilibrary.org/governance/good-regulatory-practices-to-support-small-and-medium-enterprises-in-southeast-asia_9789264305434-en?itemId=/content/component/9789264305434-7-en&_
  2. Law No. 20 of 2008 defined MSMEs based on net assets and annual revenues, while Statistics Indonesia (BPS) uses an employment-based definition of MSMEs. The definition by BPS is used in the Indonesian Economic Census and in the BPS Survey of Micro and Small Enterprises.
  3. OECD (2018). SME and Entrepreneurship Policy in Indonesia 2018. https://www.oecd-ilibrary.org/sites/9789264306264-5-en/index.html?itemId=/content/component/9789264306264-5-en
  4. IFC classifies MSMEs per number of employees.
  5. International Finance Corporation. (2016). Women-owned SMEs in Indonesia: A Golden Opportunity for Local Financial Institutions. https://documents1.worldbank.org/curated/en/691661477568338609/pdf/109534-WP-ENGLISH-SME-Indonesia-Final-Eng-PUBLIC.pdf
  6. GR 7/2021, Article 36.

For many entrepreneurs, the decision to turn into innovations depends on the ease to adopt technology, trained workforces, and multiple sources of finance. Yet, navigating the complex regulation is a major challenge for most lay business people. To expedite the economic recovery post-pandemic recession, the stakeholders in the ecosystem are urged to formulate the right policy to simplify such challenges.

— Kariem El-Ali, Senior Policy Advisor
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