Thursday, 4 July 2013

CHALLENGES OF SMALL AND MEDIUM ENTERPRISES INCREASINGLY TOUGH




ASEAN single market is already in sight. Currently, the government is setting up small and medium Enterprises (SMEs) in order to compete. SMEs are expected to survive, be a superior product, and be a belle of the ASEAN single market by 2015. At least, it did not make Indonesia only as a market, but also contributed products to neighboring countries. Some of the challenges to be faced by SMEs, among others, include sharper competition in obtaining resources, maintaining and enhancing the competitiveness of SMEs as a creative and innovative industries, improving standards, design, and product quality to match the terms of ASEA as well as diversification of output and income stability of micro enterprises.

Wayan  Dipta, SMEs and cooperatives resource management deputy, ministry cooperatives and SMEs, in Jakarta (Monday, 4/15), said that Indonesia SMEs in general will face many tough challenges and more sharply in the current agenda of the ASEAN Economic Community (AEC) implemented in 2015. Wayan suggests that one thing that should be improved is in terms of design and product quality standards. At least in accordance with the policies of ASEAN, such as ISO-26000. “Enabling this (ISO, editor) is a challenge for us”, wayan said

Wayan added that the keenest competition is, among others, acquiring resources to maintain and improve competitiveness of SMEs as a producer of creative and innovative industries. Therefore, he said, the best solution to face AEC 2015 agenda is to improve the ability of SMEs to take advantage of financing facilities, including enhancing cooperation between ASEAN countries.

Wayan said that according to a study conducted by the ministry of cooperatives and SMEs there are six recommendations given to Indonesia SMEs to be able to still exist in the AEC 2015. First, to increase financial access. Second, to improve market access. Third, to encourage SMEs ro do research in order to give birth to innovation and creativity. Fourth, to improve coordination and monitoring. And, the latest is develop ASEAN SMEs policy index

In order to maintain competitiveness of the product, he expects every SME to focus more attention to regional potency and the direction of economic development, capacity building for SMEs, and assistance for would-be MSMEs in an appropriate manner and the application of supply chain management to remove all obstacles. He saw that the condition of MSME 2013 has a major role to national economic growth. Macroeconomic growth has brought positive results, but he acknowledged that growth in the real sector mostly done by MSMEs still needs to be improved further.

The same is expressed by Erwin Aksa, chairman of board of trustees of BPP Indonesia young entrepreneurs association (Hipmi). Erwin sees that there are many factors that make SMEs most vulnerable. Among them, the development of SMEs ‘product innovation is not optimal. That’s why Erwin said that there should be a pilot project in these regions. According to him, there should be government intervention. If there is no protection provided by the government, in addition to difficulty in obtaining capital assistance, these are other causes that SMEs will be vulnerable and will fail in the competition.

He added that complexity will increasingly be felt by SMEs when faced with high bank interest rates. Bank interest rate for SMEs is relatively high, at least 12% much higher than in neighboring countries such as Malaysia, which is only 4%. In addition, easy access to capital could also have an impact on the productivity and creativity of SMEs. (E)


Business News - April 17,2013

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