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MSMEs Digitalization Needs Faster Acceleration

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MSMEs Digitalization Needs Faster Acceleration

Digital economy is one of many saviors of the Indonesian economy amid the Covid-19 pandemic. Data from the Indonesian Trade Ministry showed that the national digital economy contribution to the Gross Domestic Product (GDP) in 2020 was 4 percent. The government then projects that the digital economy contribution to GDP will soar up to 18 percent by 2030.

To reach that goal, the government has done some efforts, such as accelerating the digitalization of the Micro Small Medium Enterprises (MSMEs).

The Cooperatives and SME Ministry's data showed, as quoted from, there are 64.2 million MSMEs in Indonesia. According to Indonesian E-Commerce Association's data, per September 2021, some 16.4 million or 25.6 percent of the 64.2 million MSME have joined digital platforms. This number has grown more than 100 percent since the Covid-19 pandemic began. Therefore, the Indonesian government targets some 30 million MSMEs to join digital platforms or market their product digitally by 2030. Gradually, the targets are 19 million MSMEs in 2022 and 24.5 million in 2023.

There are some benefits from the involvement of MSMEs in the digital economy. One of which is a greater financial profit through online sales increase. A study by Universitas Indonesia's Economy and People Study Body with an online platform - Tokopedia showed that the use of digitalization by MSMEs had increased the sales volume.

MSMEs digitalization is very promising, in increasing the profit. However, it requires perseverance in preparing and ensuring the MSMEs can be involved in the digitalization process.

The lack of understanding about digitalization and technology potential as a business development platform is one of the reasons why many MSMEs stay with the conventional style. Therefore, Minister of Cooperatives and MSMEs, Teten Masduki, as quoted from Antara (16/11) said that MSMEs’ understanding about digitalization must be comprehensive so they can grow and level up.

The MSMEs need guidance to have that comprehensive understanding. This is not only the government's responsibility, but also all related stakeholders. All the related stakeholders need to be actively involved in providing guidance for MSMEs to join the digital platform. A similar guidance is also necessary to make MSMEs keep innovating and staying in the digital ecosystem.

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