IDEAS home Printed from https://ideas.repec.org/a/eme/jecpps/v5y2011i1p68-82.html
   My bibliography  Save this article

Development of small and medium enterprises in a developing country

Author

Listed:
  • Tulus Tahi Hamonangan Tambunan

Abstract

Purpose - The Indonesian Government has taken many measures to support the development of small and medium enterprises (SMEs), which are expected to play a crucial role in employment creation, gross domestic product growth, and non‐oil and gas export development. The purpose of this paper is to examine recent developments of SMEs in Indonesia. More specifically, it aims to address the following research questions: How important are SMEs in Indonesia? What are their main constraints? What is the impact of women entrepreneurs on SME development? and Can Indonesian SMEs be sources of innovation? Design/methodology/approach - The paper analyzes data from Indonesia's National Agency of Statistics and reviews key literature and secondary data on Indonesian SMEs. Findings - First, SMEs have been the main player in domestic economic activities as they account for more than 99.9 percent of all firms and employ 96.2 percent of the workforce. Second, key SME constraints include lack of finance and marketing difficulties. Third, representation of women entrepreneurs is still relatively low and can be attributed to low level of education and cultural/religious constraints. Finally, SME innovation capability is low for several key reasons. Originality/value - The paper considers the involvement of women in SMEs in a Muslim‐majority country and contributes to the literature on the innovation capability of SMEs.

Suggested Citation

  • Tulus Tahi Hamonangan Tambunan, 2011. "Development of small and medium enterprises in a developing country," Journal of Enterprising Communities: People and Places in the Global Economy, Emerald Group Publishing Limited, vol. 5(1), pages 68-82, March.
    • Handle: RePEc:eme:jecpps:v:5:y:2011:i:1:p:68-82
    DOI: 10.1108/17506201111119626
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/17506201111119626/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/17506201111119626/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/17506201111119626?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Manning,Chris, 1998. "Indonesian Labour in Transition," Cambridge Books, Cambridge University Press, number 9780521594127.
    2. Jajri, Idris & Ismail, Rahmah, 2007. "Source of output growth in small and medium scale enterprises in Malaysia," MPRA Paper 2779, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hengky K. Salim & Rory Padfield & Ali Yuzir & Shaza Eva Mohamad & Naoko Kaida & Effie Papargyropoulou & Shohei Nakamura, 2018. "Evaluating the organizational intention to implement an Environmental Management System: evidence from the Indonesian food and beverage industry," Business Strategy and the Environment, Wiley Blackwell, vol. 27(8), pages 1385-1398, December.
    2. Mohammed Ziaul Hoque & Nilufar Sultana & Tasmia Thalil, 2016. "Credit rationing’s determinants of Small and Medium Enterprises (SMEs) in Chittagong, Bangladesh," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 6(1), pages 1-23, December.
    3. Meyske A. Rahantoknam & Meyske A. Rahantoknam & Wellem A. Teniwut & Anna M. Ngabalin, 2017. "Loyalty or Inertia? Customer Perspective on Traditional Micro-retailing of Fisheries Commodities in Small Islands Coastal Area," International Review of Management and Marketing, Econjournals, vol. 7(1), pages 137-144.
    4. Shoaib Ali & Farooq Azam & Hafiz Muhammad Naveed & Waqar Abid, 2020. "Impact of Prestigious Indicators on Sustainable Growth of Small and Medium-Sized Enterprises in Pakistan," Asian Journal of Economics and Empirical Research, Asian Online Journal Publishing Group, vol. 7(2), pages 251-257.
    5. Indrayati, 2021. "Accounting Information System Implementation and Compatibility with MSMEs Accounting Standards for Preparing Financial Statements at Micro, Small and Medium Enterprises (MSMEs) in Malang, East Java, I," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 10(4), pages 167-175, October.
    6. Ofgaha Alemu Dire & Wegene Bekele Bekelcha, 2020. "Perception towards Regulatory Burden on Small and Medium Enterprises Performance: A Case Study in Shashemene Town, West Arsi Zone, Ethiopia," Business and Economic Research, Macrothink Institute, vol. 10(1), pages 294-312, March.
    7. Ida Nuraida, 2017. "Employee Performance Management Framework for Medium-Sized Enterprises of Agrotourism Sector," Noble International Journal of Business and Management Research, Noble Academic Publsiher, vol. 1(4), pages 74-93, April.
    8. Andres Jauregui & Kirk C. Heriot & David T. Mitchell, 2021. "Corruption and formal-sector entrepreneurship in a middle-income country: spatial analysis of firm births in the Mexican states," Small Business Economics, Springer, vol. 57(4), pages 1957-1972, December.
    9. Muhammad Haseeb & Hafezali Iqbal Hussain & Sebastian Kot & Armenia Androniceanu & Kittisak Jermsittiparsert, 2019. "Role of Social and Technological Challenges in Achieving a Sustainable Competitive Advantage and Sustainable Business Performance," Sustainability, MDPI, vol. 11(14), pages 1-23, July.
    10. Andri Soemitra & Kusmilawaty & Tri Inda Fadhila Rahma, 2022. "The Role of Micro Waqf Bank in Women’s Micro-Business Empowerment through Islamic Social Finance: Mixed-Method Evidence from Mawaridussalam Indonesia," Economies, MDPI, vol. 10(7), pages 1-19, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Irene S. Egyir & E. Owusu‐Benoah & F.O. Anno‐Nyako & B. Banful, 2011. "Assessing the factors of adoption of agrochemicals by plantain farmers in Ghana," Journal of Enterprising Communities: People and Places in the Global Economy, Emerald Group Publishing Limited, vol. 5(1), pages 83-97, March.
    2. Tulus Tahi Hamonangan Tambunan, 2011. "Development of small and medium enterprises in a developing country: The Indonesian case," Journal of Enterprising Communities: People and Places in the Global Economy, Emerald Group Publishing, vol. 5(4), pages 68-82, January.
    3. rene S. Egyir E. Owusu-Benoah F.O. Anno-Nyako B. Banful, 2011. "Assessing the factors of adoption of agrochemicals by plantain farmers in Ghana," Journal of Enterprising Communities: People and Places in the Global Economy, Emerald Group Publishing, vol. 5(4), pages 83-97, January.
    4. Sjoholm, Fredrik & Lipsey, Robert E, 2006. "Foreign Firms and Indonesian Manufacturing Wages: An Analysis with Panel Data," Economic Development and Cultural Change, University of Chicago Press, vol. 55(1), pages 201-221, October.
    5. Alatas, Vivi & Cameron, Lisa, 2003. "The impact of minimum wages on employment in a low income country : an evaluation using the difference-differences approach," Policy Research Working Paper Series 2985, The World Bank.
    6. Bird, Kelly & Manning, Chris, 2008. "Minimum Wages and Poverty in a Developing Country: Simulations from Indonesia's Household Survey," World Development, Elsevier, vol. 36(5), pages 916-933, May.
    7. Drusilla K. Brown & Alan V. Deardorff & Robert M. Stern, 2009. "The Effects of Multinational Production on Wages and Working Conditions in Developing Countries," World Scientific Book Chapters, in: Globalization And International Trade Policies, chapter 17, pages 623-687, World Scientific Publishing Co. Pte. Ltd..
    8. Sri Kusumastuti Rahayu & Bambang Sulaksono & Musriyadi Nabiu & Sri Budiyati & Hastuti & Akhmadi & Wawan Munawar & Osmaliana Waworuntu & Dewi Meiyani & Chairil Anwar & Sinung Hendratno & Asep Suryahadi, "undated". "Wage and Employment Effects of Minimum Wage Policy in the Indonesian Urban Labor Market," Working Papers 772, Publications Department.
    9. C. Peter Timmer, 2004. "The road to pro-poor growth: the Indonesian experience in regional perspective," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 40(2), pages 177-207.
    10. Albert Berry, 2008. "Growth, Employment And Distribution Impacts Of Minerals Dependency: Four Case Studies," South African Journal of Economics, Economic Society of South Africa, vol. 76(s2), pages 148-174, August.
    11. Hal Hill, 2007. "The Indonesian Economy: Growth, Crisis And Recovery," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 52(02), pages 137-166.
    12. Tulus Tambunan, 2008. "SME development, economic growth, and government intervention in a developing country: The Indonesian story," Journal of International Entrepreneurship, Springer, vol. 6(4), pages 147-167, December.
    13. Tulus T.H. Tambunan, 2015. "Development of Women Entrepreneurs in Indonesia: Are They Being Pushed or Pulled?," Journal of Social Economics, Research Academy of Social Sciences, vol. 2(3), pages 131-149.
    14. Hal Hill, 2000. "Indonesia: The Strange and Sudden Death of a Tiger Economy," Oxford Development Studies, Taylor & Francis Journals, vol. 28(2), pages 117-139.
    15. Hadi Soesastro & Haryo Aswicahyono & Dionisius A. Narjoko, 2006. "Economic Reforms in Indonesia after the 1997/98 Economic Crisis," EABER Working Papers 21831, East Asian Bureau of Economic Research.
    16. Robert E. Lipsey & Fredrik Sjoholm, 2001. "Foreign Direct Investment and Wages in Indonesian Manufacturing," NBER Working Papers 8299, National Bureau of Economic Research, Inc.
    17. Asep Suryahadi, & Wenefrida Widyanti & Daniel Perwira & Sudarno Sumarto, 2001. "The Impact of Minimum Wage Policy on Wages and Employment in Developing Countries: The Case of Indonesia," Economics Study Area Working Papers 38, East-West Center, Economics Study Area.
    18. Asep Suryahadi & Wenefrida Dwi Widyanti & Daniel Perwira & Sri Kusumastuti Rahayu & Bambang Sulaksono & Musriyadi Nabiu & Sri Budiyati & Hastuti & Akhmadi & Wawan Munawar & Osmaliana Waworuntu & Dewi , "undated". "Dampak Kebijakan Upah Minimum terhadap Upah dan Ketenagakerjaan di Pasar Tenaga Kerja Perkotaan Indonesia," Working Papers 3604, Publications Department.
    19. repec:ilo:ilowps:340227 is not listed on IDEAS
    20. Raymond Robertson & Drusilla Brown & Gaëlle Pierre & María Laura Sanchez-Puerta, 2009. "Globalization, Wages, and the Quality of Jobs : Five Country Studies," World Bank Publications - Books, The World Bank Group, number 2654.
    21. Prema-Chandra Athukorala, 2011. "Trade Liberalisation and The Poverty of Nations: A Review Article," Journal of Development Studies, Taylor & Francis Journals, vol. 47(3), pages 533-543.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:jecpps:v:5:y:2011:i:1:p:68-82. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.