The Department of Industry would as ever encourage the growth of new entrepreneurs through the program of incubator business. Fauzi Azis, Director General of the Small and Medium Industry disclosed to Business News this program was aimed at jacking up the growth rate of small business to be 1% above the economic growth which was projected to be 7% to 8%.
“In the event of collaborations with institutions like the Board of Study and Technology Application, business incubator is put at work. The businesspeople, having passed the program would be given a certain amount of initial capital to be used in business operation. For this purpose we expect that the fund they get was not from Government resources, but rather from the venture capital, which are basically set up to assist small-and-medium business”.
We regarded venture operators as risk taker. The type of credit injected like for example Rp. 50 million per beginner entrepreneurs such as IT animation business could be spent on softwares. At best on the Rp. 50 million loan, commercial banking rate was not being imposed [which at the moment was still above 10%], but interest-free platform is applied instead like a 5 year interest free credit. Other possible platform was the credit program for incubator business development with interest rate below that of the bank’s level.
Meanwhile the interest rate level for Small-and-Medium-Business should be as competitive as possible because financing for the small-and-medium business should also be competitive, whereby the can run business fairly. That the small business might grow by 9%, the interest rate imposed on them should be fixed, like between 5% to 6%.
Other factors to be observed by new entrepreneurs that they might be energized to grow was that the product they offer should be innovative so that Indonesian products might be known and be the master in their own threshold here in Indonesia hence their mission was in line with the Government’s policy.
The Business Incubator System was Never Appreciated
“On the other hand, the Incubator Small Business seems never are appreciated, although the process of making professional entrepreneur is not easy, and the training itself a process of long term investation. If the positions are filled with qualified persons, it would contribute to the achievement of 7% to 8% of IKM growth”. Fauzi remarked.
“However”, Fauzi said, “the effort such as funding should be consistent, it should be done by one-stop service system, whether through the State Minister of Cooperative and Small Business or other departments which are appointed to channel out credit or funding for small business. Meanwhile the Department of Industry would concentrate on quality upgrading and standardization of products as well as assisting in terms of marketing”.
How far was the role of research and development institutions under the directions of the department of Industry, it was expected that their role was only to do research with focus on the execution only, so there could be link and match needed by the businesspeople.
It was true that to research, observation was needed which was generally focused on the producers’ commodity. We expect that the role or R&D and workshop be optimized so as to keep their knowledge from being lower than that of corporations, especially in terns of utilization of required technology. Their quality of research should be up to the high standard of technology, not just the local standard but the international standard applied in advanced countries.
“Two important aspects which we underscore to realize the 9% target growth of small-and-medium business was to strengthen marketing strategy through expanding market base and application of domestic technology for existing industries as well as new comers”.