TRIBUNNEWS.COM – Contributing to 60% of GDP and able to absorb up to 97% of the workforce, MSMEs have become the backbone of the Indonesian economy. According to the Indonesian Ministry of Cooperatives and SMEs (Kemenkop UKM) Report, 99.99% of businesses in Indonesia consist of MSMEs, with a total of 64 million units.
Unfortunately, the pandemic that has hit Indonesia since 2020 has had a significant impact on various types of businesses, including MSMEs. Data from Bank Indonesia shows that 93.2% of MSMEs experienced a negative impact in terms of sales due to the pandemic as of March 2021.
Deputy for Business Restructuring of the Kemenkop UKM, Eddy Satriya in the “Scale Up with Whatsapp” event said that the MSME sector most affected by the pandemic was the accommodation and food-beverage sector with a total of 35.88%, followed by large and retail trade MSMEs with 25.33%. , then the processing industry as much as 17.83%.
The big future of MSMEs is in a small town
In a pandemic storm situation, efforts to prioritize and advance MSME businesses in small cities and regencies are something that needs to be prioritized. This is because small cities have enormous potential in their MSME sector.
Based on data from the official website of the Ministry of Cooperatives and SMEs, various districts and small cities already have thousands of MSMEs. For example, Kupang Regency with 44,639 MSMEs, Pekanbaru City with 105,445 MSMEs, Malang Regency with 417,373 MSMEs, and Surakarta City: 82,531 MSMEs.
The Provincial Economic Report from Bank Indonesia as of August 2021 also shows that several regions have recorded economic growth in the past year, driven by support from the national and local governments. This growth is also influenced by support for MSMEs, assistance for digital transformation, and vaccinations for MSMEs from the government and the private sector.
These areas are East Nusa Tenggara, South Sulawesi, Riau, East Java, and Central Java. With economic growth in the second quarter of 2021 which was quite significant from the previous quarter, these areas have the potential for economic improvement, including in terms of growth in the trade sector, MSMEs, and retail traders. With these results, it is hoped that these regions can continue to advance, including the MSME sector.
Digitization and connectivity, important keys for MSMEs in small cities
Despite the huge potential spread across various regions, there are still challenges that prevent MSME actors in small cities from growing and developing. One of the biggest challenges is the lack of knowledge, access and digital literacy owned by MSMEs in small cities.
Moreover, currently the majority of the acceleration of digitization is still concentrated in big cities, where access and infrastructure are more complete and facilitate the process.
Based on data from the East Ventures Digital Competitiveness Index 2021, digital competitiveness in Indonesia tends to be dominated by large provinces which are generally located in Java and other areas such as Nusa Tenggara and South Sulawesi tend to be in a lower position. Meanwhile, data from Kearney states that more than 80% of the people in tier 2 and 3 cities still do not understand digital platforms.
Connectivity problems are also another obstacle. Minister Airlangga Hartarto in the East Ventures Digital Competitiveness Index 2021 stated that Indonesia still lacks inter-island connectivity, and this hinders the acceleration of digital economy adoption. APJII 2019-2020 data for quarter 2 shows that the internet contribution per region is also still dominated by Java Island, while Maluku and Papua islands are in the last position.
These two problems have created an imbalance between the progress and digital competitiveness of MSMEs in big cities and MSMEs in small cities.
This inequality is also accompanied by the reluctance of MSME actors to carry out digital adaptation. MSME businesses are generally run by older people, who tend to be skeptical of technology. This then hinders them from adapting and adopting digital services. In fact, this digital adaptation and adoption is crucial for MSMEs, especially when mobility restrictions are imposed and people switch from physical stores to e-commerce or digital platforms.
Seeing the problems and challenges that exist, digital literacy is a major step needed in realizing the digitization of MSMEs, especially in small cities. Therefore, the government needs to conduct education to improve people’s digital literacy.
Minister Airlangga said that special handling is needed for 3T regions (outermost, leading, and underdeveloped) in terms of digitization, especially by building internet access in 3T areas.
To answer the challenges in the digitization of MSMEs, the government has also launched a digitalization program with a target of 30 million MSME players entering the digital ecosystem by 2024.
Grab and Emtek Group are ready to tackle the challenges of MSMEs in small cities
In addition to the government, the role of the private sector is also needed in overcoming the challenges faced by MSMEs, especially in small cities
In order to encourage digital and financial inclusion for all Indonesians, Grab Indonesia shows its commitment to supporting MSMEs in small cities through its strategic partnership with Emtek Group.
This collaboration between Grab Indonesia and Emtek Group is specifically aimed at MSMEs in small cities and regencies in Indonesia in order to answer the challenges still experienced by MSMEs in these areas.
The disparity that exists between MSMEs in big cities and small cities makes Grab and Emtek Group realize that inclusive growth is needed in order to advance MSMEs in smaller areas, so that they can also contribute to the nation’s economic growth.
Therefore, Grab and Emtek Group will organize an extensive accelerator program targeting 4,500 MSMEs and focusing on integrated programs.
Through these programs, Grab and Emtek Group believe that the best efforts are essential to help MSMEs survive during the pandemic. In addition to the form of assistance, MSMEs are also encouraged to digitize so that MSME actors can benefit from the digital economy.
The presence of GrabExpress encourages the progress of MSMEs during the pandemic
Despite the challenges that hit, several MSMEs in the regions and small cities have succeeded in utilizing digital platforms and developing their MSME businesses.
The success they have achieved has shown that the perception of business success can only be achieved if it is carried out in big cities is a wrong assumption. In fact, these MSME actors have succeeded in improving the economy and preserving regional superior products with their efforts.
Through digital platforms, MSMEs can reach larger and wider consumers. Just imagine if a cow sei trader in Kupang took advantage of digitalization to reach buyers from outside Kupang, even to all over Indonesia.
This certainly has a big impact, ranging from cost efficiency, to greater turnover. Consumers in other regions can also feel the benefits. With the digital platform, consumers don’t have to go all the way to Kupang to be able to enjoy authentic beef sei culinary.
Along with digitalization, increasingly advanced logistics facilities also have a positive impact on business and MSME growth. With advanced delivery service technology, GrabExpress is here to provide convenience for MSME players in various parts of the archipelago.
One of the MSME actors who has felt the positive impact of digitization and the GrabExpress facility is Jessyca Putri Maslie.
After 16 years of selling in Tangerang’s Poris Market, he has felt a decline since Fauziah Yusuf, the owner of a flower bouquet-making business, snack, and balloons in Makassar.
The existence of the GrabExpress service in Makassar makes it easier to deliver to buyers. According to him, this GrabExpress service makes it easy for small businesses like him because they can send bouquets to five different addresses at one time. This also means that buyers don’t have to wait long for their orders to arrive.
The convenience obtained through digitization and the use of GrabExpress was also felt by Sancayarini or Rini (63), the owner of clothing brand Kana Goods.
The pandemic situation forced the shop where he was selling to close, which made him lose his source of income.
Realizing that she had to adapt and digitize, Rini started using the GrabExpress service to help her deliver goods to customers.
Since go digital and using the GrabExpress service, Rini’s business is not only back to normal, she is also able to reach more customers than before.