SMEs Powering Indonesia’s Growth
Indonesia Business Council for Sustainable Development (IBCSD), partnering with SME Magazine (part of Business Media International), are working together for the SME100 Awards on June 14th. Before the awards, a new survey conducted by SME Magazine reveals that boosting the engagement of small and medium enterprises (SMEs) in Indonesia could help sustain the country’s economic growth. SMEs in Indonesia continue to grow, notwithstanding global economic uncertainties and a more challenging marketplace.
While the records set by these fast moving companies may not be representative of all SMEs, it dispels the myth that business has been difficult for SMEs in general in Indonesia. Among the SMEs surveyed, revenue grew 9.3 percent in 2018 to an average of 55.1 billion rupiah, while profit grew by 23.5% to an average of 7.1 billion rupiah on the back of a strong domestic consumption. This is especially impressive given the 5.17 percent GDP growth for the whole country in 2018.
The SME 100 surveyed 2,000 top SMEs in Indonesia between February and April this year. Out of these 29 fast moving SMEs are selected based on quantitative criteria such as revenue growth and profit, and qualitative criteria such as business outlook, investment in training, and R&D efforts, to receive the SME 100 Awards. The project is conducted also in partnership with Indonesian Chamber of Commerce and Industry (KADIN).
Among the award recipients are chatbot provider Kata.ai, food franchisor Orchi Fried Chicken, wedding and holiday planner Weddingku group, peer-to-peer financing platform Investree, digital wallet provider Payfazz, and lifestyle retailer Metroxgroup.
Indonesia is the third country in ASEAN to launch the SME 100 Awards, after Malaysia and Singapore. Vietnam will be the fourth country with the survey currently being deployed across the country.
SMEs participating in the survey are both optimistic and cautious over the rapid pace of technological development and greater regional economic integration. Many SMEs continue to feel the heat from both technology-based disruptors in their industry and from regional competitors who are adopting technology to outpace them in the market. Almost every SME surveyed realizes the importance of a digital strategy, but many do not have the resources or the capability to implement one. The Indonesian government has invested substantial time and money into helping SMEs in this aspect, but the adoption rate is far slower than ideal.