Author
Listed:
- Annabelle Mourougane
(OECD)
Abstract
Micro, small and medium-sized firms (MSMEs) are a key source of employment and economic growth in Indonesia. They contributed to the country’s economic resilience during the 2008-09 financial crisis. But many suffer from low productivity, curbing their role in boosting living standards. There are several ways to spur MSME productivity growth over the medium term. The first route would be to encourage the formalisation of small firms. Lessening red tape through simplification of the licensing process and lower tax compliance costs would help. Avoiding excessive rises in the minimum wage in provinces where it is already at a reasonable level would also be important. Looking forward, it would be useful to remove rigidities in the formal labour markets, while moving to some form of unemployment benefit system to insure workers against job-loss risks. The second route would be to boost investment. Clarifying property rights for real estate, and making the information collected by the credit bureau available to all financial institutions would ease access to finance. At the same time, the development of financing alternatives such as venture capital, leasing or micro-finance would enhance credit supply. The poor state of infrastructure, in particular in the transportation and electricity sectors, is also perceived as an important impediment to investment and could be remedied by increasing public infrastructure spending on cost-effective projects. The third route would be to enhance the quality of human resources. The country suffers from a lack of skilled workers, and policies should aim both at increasing the pool of workers and making education and training institutions more responsive to evolving labour-market demand. Indonesia has a long tradition of supporting MSMEs. But responsibilities between the different levels of government and within the central government need to be clarified to minimise overlap and inefficiencies. A rigorous assessment of existing programmes would allow schemes to be consolidated and scarce public funds to be directed to their most cost-effective uses. Promouvoir le développement des PME en Indonésie Les micro, petites et moyennes entreprises (MPME) sont une source majeure d’emplois et de croissance économique en Indonésie. Elles ont contribué à la résistance de l’économie durant la crise financière de 2008-09. Cependant, beaucoup de ces entreprises souffrent d’une faible productivité, ce qui limite leur rôle dans l’amélioration des niveaux de vie. Il existe plusieurs moyens de stimuler la croissance de la productivité des MPME sur le moyen terme. Le premier moyen serait d’encourager les petites entreprises à s’engager dans l’économie formelle. Il serait utile, à cet effet, de réduire la bureaucratie en simplifiant les procédures d’octroi de licences et d’abaisser les coûts du respect des obligations fiscales. Il serait aussi important d’éviter toute hausse excessive du salaire minimum dans les provinces où il atteint déjà un niveau raisonnable. Dans le future, il conviendrait de réduire les rigidités sur le marché du travail formel, tout en adoptant une forme de système d’indemnisation du chômage afin d’assurer les travailleurs contre le risque de perte d’emploi. Le deuxième moyen serait de stimuler l’investissement. La clarification des droits de propriété immobilière, et la mise à la disposition des informations recueillies par le bureau du crédit à toutes les institutions financières faciliteraient l’accès aux financements. En même temps, le développement d’autres solutions de financement telles que le capital-risque, le crédit-bail ou le microcrédit renforcerait l’offre de crédit. Le mauvais état des infrastructures, en particulier dans les secteurs des transports et de l’électricité, est aussi perçu comme un obstacle à l’investissement, auquel il serait possible de remédier en accroissant les dépenses publiques pour financer des projets d’infrastructure rentables. Le troisième moyen serait de rehausser la qualité des ressources humaines. Le pays souffre d’une pénurie de travailleurs qualifiés, et il faudrait mettre en oeuvre des politiques visant à accroître le nombre de travailleurs disponibles et à rendre les établissements d’enseignement et de formation plus réactifs à l’évolution de la demande sur le marché du travail. L’Indonésie a depuis de longues années une politique de soutien aux MPME. Il est cependant nécessaire de clarifier les responsabilités entre les différents niveaux d’administration et au sein de l’administration centrale afin de réduire au minimum les doubles emplois et l’inefficience. Une évaluation rigoureuse des programmes existants permettrait de consolider les dispositifs en place et d’allouer les maigres ressources publiques à leurs usages les plus rentables. Ce Document de travail se rapporte à l’Étude économique de l’OCDE de l’Indonésie 2012 (www.oecd.org/eco/etudes/Indonésie).
Suggested Citation
Annabelle Mourougane, 2012.
"Promoting SME development in Indonesia,"
OECD Economics Department Working Papers
995, OECD Publishing.
Handle:
RePEc:oec:ecoaaa:995-en
DOI: 10.1787/5k918xk464f7-en
Download full text from publisher
Citations
Citations are extracted by the
CitEc Project, subscribe to its
RSS feed for this item.
Cited by:
- Martin P.H. Panggabean, 2017.
"Financial Intermediation Sector In Indonesia’s Production Pyramid,"
Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 19(4), pages 385-402, April.
- Radityo Putro Handrito & Hendrik Slabbinck & Johanna Vanderstraeten, 2021.
"Being pro‐environmentally oriented SMEs: Understanding the entrepreneur's explicit and implicit power motives,"
Business Strategy and the Environment, Wiley Blackwell, vol. 30(5), pages 2241-2254, July.
- Rothenberg, Alexander D. & Gaduh, Arya & Burger, Nicholas E. & Chazali, Charina & Tjandraningsih, Indrasari & Radikun, Rini & Sutera, Cole & Weilant, Sarah, 2016.
"Rethinking Indonesia’s Informal Sector,"
World Development, Elsevier, vol. 80(C), pages 96-113.
- World Bank Group, 2016.
"Women Entrepreneurs in Indonesia,"
World Bank Publications - Reports
24751, The World Bank Group.
- Bianchi, Constanza & Wickramasekera, Rumintha, 2016.
"Antecedents of SME export intensity in a Latin American Market,"
Journal of Business Research, Elsevier, vol. 69(10), pages 4368-4376.
- Syamsari Syamsari & Muhammad Ramaditya & Irma Andriani & Ayu Puspitasari, 2022.
"Selecting Priority Policy Strategies for Sustainability of Micro, Small, and Medium Enterprises in Takalar Regency,"
Sustainability, MDPI, vol. 14(23), pages 1-12, November.
- Alfian & Murti Galuh Tresna, 2017.
"The Influence of Company’s Age and Owner’s/Manager’s Education on the Use of Accounting Information in Small and Medium Enterprises,"
International Journal of Business and Administrative Studies, Professor Dr. Bahaudin G. Mujtaba, vol. 3(2), pages 64-71.
- Richard Grabowski, 2017.
"Limited access states and elections: an unexpected economic consequence,"
Evolutionary and Institutional Economics Review, Springer, vol. 14(1), pages 61-78, June.
- Dhaniel Ilyas, 2017.
"Preliminary Finding of Small and Micro Firms Resilience in Indonesia,"
LPEM FEBUI Working Papers
201715, LPEM, Faculty of Economics and Business, University of Indonesia, revised Dec 2017.
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:oec:ecoaaa:995-en. 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.
We have no bibliographic references for this item. You can help adding them by using 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: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/edoecfr.html .
Please note that corrections may take a couple of weeks to filter through
the various RePEc services.