DSInnovate Report: Empowering MSMEs in Indonesia 2021

Over the years, the MSME sector has continued to play an important role as a pillar of the national economy. Various surveys and data have validated the large contribution of economic value generated from it, including its relation to employment and empowerment of the lower middle class. With the resulting positive impact, of course it is a shared task to keep the growth of national MSMEs sustainable.

Observing its development in the last two-three years, digitalization has become one of the most prominent aspects. These efforts were adopted to produce business process efficiencies and enable wider market access. Especially when the micro-small scale MSME pandemic is classified as vulnerable to economic turmoil, digitalization is considered to be a middle way to save them.

The digital transformation of MSMEs is getting attention from technology innovators, especially digital startups. Various application services are then presented and continue to emerge, ranging from solutions that support operational, financial, marketing, sales, to personnel processes. Its adoption also looks fast, as evidenced by the increasing traction of application services from time to time, in addition to venture capitalist support for related startups.

To see the trend of technology adoption in MSMEs in more depth, DSInnovate released a report titled "MSME Empowerment Report 2021: Revive and Thrive with Digitalization" supported by Lazada, Sirclo, Xendit, and Youtap.

In the process, qualitative and quantitative research is carried out, involving respondents from various circles, ranging from MSME actors in various regions, founder technology startups, to the government. This report consists of five main sections, as follows:

• MSME Landscape in Indonesia; discusses the general description and condition of the MSME ecosystem in Indonesia today, including business categories and the resulting impacts.
• General challenges of MSMEs in Indonesia; discusses in detail the three main challenges that are widely rumored, ranging from financial, operational, and business expansion.
• Technology adoption by MSMEs; explore the technology applied by MSME actors and the level of adoption -- including the benefits derived from digital services implemented in their business.
• The impact of the pandemic on MSMEs; see the impact of the pandemic on the MSME business and how the view of MSME actors in welcoming the new normal era.
• Regulations related to MSMEs; discusses regulatory aspects and government support for the advancement of the MSME industry in Indonesia.

There are many interesting findings that are summarized in the report. One of them, based on a survey conducted to 100 MSME players, 83% of whom have used digital startup products or services to maximize their business. As many as 95% of those who have adopted the service claim to have increased productivity.

For the full report, download it for free via the following link: MSME Empowerment Report 2021.