Articles

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

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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.

The Importance of MSMEs for Poverty Alleviation: A Story from Indonesia

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Objective: This study examines poverty in Indonesia from an economic approach and discusses the importance of micro, small, and medium enterprises (MSMEs). It focused on the impact of these enterprises on poverty in the country.

Methodology: The analysis incorporated an autoregressive model wherein total workers in MSMEs and economic growth rate as explanatory variables. Annual time series data for the period of 2007-2019 has been used. The study also reviews the earlier empirical studies on the relationship between the growth of MSMEs and poverty alleviation in many other countries/regions. It represents the descriptive analysis of the explanatory variables and trends in poverty and MSMEs’ workforce. The poverty-reducing impact of the increase in MSMEs’ workers has been examined.

Findings: The result is significant which implies that MSMEs can play a very important role in poverty alleviation in Indonesia. The results of the study imply that a strong MSME base is required for the development of the economy and poverty alleviation in the country.

Noverlty: There are many studies regarding MSMEs in Indonesia. However, empirical research regarding the impact of the growth of employment opportunities in MSMEs on poverty levels in Indonesia is still very rare. Therefore, this research fills this gap and at the same time stimulates further research.

Startup Company Strategy to be Sustainable through Financial Services Product: Mitra Bukalapak Study Case

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Mitra Bukalapak is a B2B platform that digitalises 13.1 million Warung or Kiosks to be able to sell physical, virtual, and financial products. Today, this company is still having a negative contribution margin. Research has been conducted and shows that non-T1 cities are having the highest Mitra Bukalapak agent growth. This due to the unbanked people are demanding to get a certain service. A questionnaire has been sent to Mitra Bukalapak’s agent and an in-depth interview with internal stakeholders has been done to collect the data. The analysis of the data is conducted through qualitative and quantitative analysis and found 3 potential business strategies for the company. VRIO framework is used to identify Mitra Bukalapak’s competitive advantage internally. External analysis is done through STP marketing strategy and 7P marketing mix analysis. As the result, developing a new product portfolio can be one option. Tapping into a new market and concentrating on the high-growth market in T2 and T3 cities can be another. Also boosting revenue from existing customers by giving a higher charged fee can increase the take rate. This study aims to propose a strategy for Mitra Bukalapak to get a positive contribution margin specifically through its financial services product.

Omnichannel Business Strategy for MSME to Increase Profit during Post-Pandemic: A Case of Jaya Raya Store

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This study aims to analyze business issue of Jaya Raya Store as one of the MSME in Indonesia during post-pandemic, determining what kind of channel can be beneficial, how the channels proposed work well, determining the possible combination of channels as strategies to solve the business issue. The business issue was identified by using 5 why analysis and this study was made by using quantitative data obtained through distributing questionnaire surveys to 203 potential customers of Jaya Raya Store. The data is then analyzed by using regression analysis through SPSS statistics. Result of the research shows that for the business to keep improving especially during post-pandemic, expanding business channels is necessary and it is proofed that some channels such as phygital, digital promotions and digital catalogs have a great influence on customer awareness and their purchase decision. This study has the value that can be seen form the interesting strategies which can also be used for other business that experience the same business issues as Jaya Raya Store. The author has researched through channels as the variables of this study and provided four business solutions with implementation plan proposed for 1 year period. Business stakeholders need to focus on expanding the business channels so that more potential customers can be reached. This study discussed on four variables as the solutions such as phygital, digital promotions, social media, and digital catalog. The findings of this study can be a consideration for other business stakeholder to choose the best strategy for their business and it can be used for those who agree by applying the proposed business solutions and implementation plan to influence the potential customer awareness and their purchase decision.

E-Commerce and Environmental Uncertainty Adoption in Strengthening Financial Literature on the Performance of MSMEs in the Culinary Sector in Solo

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This study has purpose (1) to analyse the effect of financial literacy on the performance of MSMEs. (2) to analyse the effect of financial literacy on the performance of MSMEs moderated by e-commerce adoption. (3) to analyse the effect of financial literacy on the performance of MSMEs moderated by environmental uncertainty. The quantitative descriptive approach was used in this study, which included 175 SMEs in the culinary sector in Solo. Data sources were acquired from primary sources utilizing a closed questionnaire technique, and the measurement scale was a 5-point Likert scale. The Pearson Correlation and Cronbach Alpha tests are used to assess the data’s quality. The data analysis technique used regression analysis with the Absolute Difference test approach, after first performing the traditional assumption test. The results of the study show (1) Financial literacy has a significant effect on the performance of MSMEs in the culinary sector in Solo City. (2) E-commerce can moderate the influence of financial literacy on the performance of MSMEs in the culinary sector in Solo City. (3) Environmental uncertainty cannot moderate the influence of financial literacy on the performance of MSMEs in the culinary sector in Solo City.

Community Empowerment in the Time of the Covid-19 Pandemic through Strengthening MSMEs in East Java

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People’s economic empowerment is an effort to create a strong, large, modern, and highly competitive economy in the correct market mechanism. Because the obstacles to people’s economic development are structural constraints, the empowerment of the people’s economy must be carried out through structural changes. The Covid-19 pandemic has hit many countries, including Indonesia. Covid-19 has had an impact on various sectors including Micro, Small and Medium Enterprises (MSMEs), including the decline in the number of sales.

This research method uses a qualitative descriptive approach. This research uses a case study approach, which is an empirical inquiry that investigates phenomena in real-life contexts, where the boundaries between phenomena and contexts are not clear, and there are multiple sources of evidence. The results of the research are that business actors seek to find marketing and sales alternatives, secure capital and assets, temporarily transfer them to other businesses, and must learn technologies that are considered effective for promotion and sales.