Articles

Recent Evidence on the Digitalization Process in Indonesia’s Micro and Small Enterprises

/in /by

The digital transformation process in micro and small enterprises (MSEs) in Indonesia is still a black box, and existing findings regarding digitalization in this business group are still very limited and fragmented. Considering the above background and the important contribution that MSEs can make to the economy and employment opportunities, as well as poverty alleviation in Indonesia, this paper aims to examine the current progress in the transition process from analog/conventional technology to digital technology (DT) in Indonesian MSEs based on the latest secondary data from the Central Statistics Agency (BPS), and primary data collected from online surveys. The finding suggests that although there has been progress in recent years, as demonstrated by the increasing number of MSEs using the internet, Indonesian MSEs still lag in the adoption of digital technology.

Evaluation of the Free Halal Certification Program (SEHATI) for Processed Livestock Micro and Small Enterprises (MSEs) in Blitar Regency

/in /by

The free halal certification program (SEHATI) aims to support the Indonesian government’s goal of having one million halal-certified food and beverage products by 2024 by accelerating the rate of halal certification through the SEHATI program. Blitar Regency has 33,932 micro and small enterprises (MSEs), but only 389 have halal certification, including egg and milk processing products. The research aims to determine the effectiveness of the SEHATI program’s implementation for livestock processing MSEs in Blitar Regency. The study uses mixed methods. Data were collected through questionnaires to 12 respondents, including stakeholders and livestock processing business actors. Data analysis was conducted using descriptive analysis and logic model evaluation analysis. The effectiveness of the SEHATI program’s implementation was the data collected in the research. The results show that the SEHATI program in Blitar Regency, through socialization and assistance to livestock processing business actors, is effective. The logic model evaluation on all indicators shows that the business actors are well-informed, understand well, and strongly agree with the input, activities, output, and outcome of the SEHATI program. The conclusion of the research is that the SEHATI program in Blitar Regency significantly benefits in raising awareness, understanding, compliance, and the number of halal products from egg and milk processing business actors. This indicates the effectiveness of this program in helping livestock processing business actors obtain halal certification.

The Importance of Digital Technology and Clustering for Innovation in MSEs. Evidence from Secondary Data in Indonesia

/in /by

This paper explores the relationship between innovation and these two determinants in micro and small enterprises (MSEs) in the manufacturing industry in Indonesia, using secondary data. The key question in this research: is there evidence of the importance of DT and clustering for innovation capability in MSEs in Indonesia? The paper analyzes secondary data from Indonesia’s National Agency of Statistics and reviews key literature on innovation and digitalization in MSEs, and industrial cluster development in Indonesia. It is found that the number of industrial clusters of micro-, small-, and medium-sized enterprises (MSMEs) is concentrated on the island of Java, where more than 50% of the population is located, and is the most advanced region in economic development and industrialization in Indonesia. The majority of MSME clusters are in the food industry and woodworking industries. Only a very few of MSEs in the manufacturing industry use the Internet and do innovation. The type of innovation mostly is product innovation. Both relationships between MSEs doing innovation and MSEs using the internet and the total number of clusters are positive. But, statistically, only the relationship between the number of MSEs doing innovation and use of the internet is significant.