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Recent evidence of the development of micro, small and medium enterprises in Indonesia

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  • Tulus Tambunan

    (University of Trisakti)

Abstract

This paper examines the development of micro, small and medium enterprises (MSMEs) in Indonesia. It has three research issues, namely the role of MSMEs, their constraints, and the importance of MSMEs for the creation of business opportunities for women. More specifically, the study aims to answer the following research questions. First, how important are MSMEs in Indonesia? Second, what are their main constraints? Third, how important are they, especially micro and small enterprises (MSEs), for the creation of business opportunities for women? Fourth, is the growth of MSEs a sign of increased entrepreneurial spirit or a reflection of poverty? This study adopted descriptive analysis using secondary data. It shows that MSMEs in Indonesia are dominated by MSEs, and accounted for almost 100% of all existing firms but only contributed between 58 to 61% of gross domestic product (GDP). About 42.84% of MSEs are owned by women, although the ratio of female to male entrepreneurs in MSEs varies by province. Poverty seems to be the main force behind the growth of MSEs. This study ends with some policy recommendations that the government should: (i) conduct trainings that focus on online marketing, entrepreneurship, management, and improving the quality of product and business efficiency; (ii) provide alternative funding facilities with low interest rates and non-burdensome requirements; and (iii) provide assistance directly in the production site for new entrepreneurs in their first years of running businesses. In addition, all gender discrimination treatments that have been burdensome for women to run own businesses must be eliminated. This study has, however, several limitations, especially with respect to the third and fourth research questions. Secondary data used does not have information about the main/initial motivation of MSME owners to run their own business and their socio-economic profiles.

Suggested Citation

  • Tulus Tambunan, 2019. "Recent evidence of the development of micro, small and medium enterprises in Indonesia," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 9(1), pages 1-15, December.
    • Handle: RePEc:spr:jglont:v:9:y:2019:i:1:d:10.1186_s40497-018-0140-4
    DOI: 10.1186/s40497-018-0140-4
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    References listed on IDEAS

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    1. Manning,Chris, 1998. "Indonesian Labour in Transition," Cambridge Books, Cambridge University Press, number 9780521594127.
    2. Juhi Raghuvanshi & Rajat Agrawal & P. K. Ghosh, 2017. "Analysis of Barriers to Women Entrepreneurship: The DEMATEL Approach," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 26(2), pages 220-238, September.
    3. repec:idb:brikps:publication-detail,7101.html?id=23575 is not listed on IDEAS
    4. Aderemi Ayinla Alarape, 2007. "Entrepreneurship programs, operational efficiency and growth of small businesses," Journal of Enterprising Communities: People and Places in the Global Economy, Emerald Group Publishing Limited, vol. 1(3), pages 222-239, August.
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    Cited by:

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    2. Abede Jawara Mack & Daniel White & Osiris Senghor, 2019. "An insight into entrepreneurship education practices in Technical and Vocational Education and Training institutions," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 9(1), pages 1-15, December.
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    5. Yao-Chin Lin & Chun-Liang Chen & Cheng-Fu Chao & Wei-Hung Chen & Henry Pandia, 2020. "The Study of Evaluation Index of Growth Evaluation of Science and Technological Innovation Micro-Enterprises," Sustainability, MDPI, vol. 12(15), pages 1-25, August.
    6. Dewi Ratna Sjari Martokoesoemo & Bonar M. Sinaga & Nunung Kusnadi & Yusman Syaukat, 2020. "Business Vulnerability and Credit Access for Agriculture-Based Micro and Small Women Entrepreneurs," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 66, pages 97-111, Desember.
    7. Edza Aria Wikurendra & Arnold Csonka & Imre Nagy & Globila Nurika, 2024. "Urbanization and Benefit of Integration Circular Economy into Waste Management in Indonesia: A Review," Circular Economy and Sustainability, Springer, vol. 4(2), pages 1219-1248, June.
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    10. Batara Surya & Seri Suriani & Firman Menne & Herminawaty Abubakar & Muhammad Idris & Emil Salim Rasyidi & Hasanuddin Remmang, 2021. "Community Empowerment and Utilization of Renewable Energy: Entrepreneurial Perspective for Community Resilience Based on Sustainable Management of Slum Settlements in Makassar City, Indonesia," Sustainability, MDPI, vol. 13(6), pages 1-36, March.
    11. Abede Jawara Mack & Daniel White & Osiris Senghor, 2021. "The benefits of exposing post-secondary students to entrepreneurship training in Trinidad and Tobago," Palgrave Communications, Palgrave Macmillan, vol. 8(1), pages 1-10, December.
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    13. Manasseh Tumuhimbise & Benjamin Musiita & Asaph Kaburura Katarangi & Geoffrey Kahangane & Atwine Daniel Wanito & Sheila Akampwera, 2024. "Increasing access to business incubation services for cottage start-ups to promote inclusive entrepreneurship in Southwest Uganda," Journal of Economics and Behavioral Studies, AMH International, vol. 16(1), pages 1-11.
    14. Irjayanti Maya & Azis Anton Mulyono, 2021. "Quality Management for Leather Industry to Increase Competitiveness in the Global Market," HOLISTICA – Journal of Business and Public Administration, Sciendo, vol. 12(2), pages 16-30, August.

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