SMALL AND MEDIUM INDUSTRIES SHOULD NOT BE CONSIDERED AS BIG COMPETITORS

Industry Minister, M.S. Hidayat, asked the Indonesian Chamber of Commerce and Industry (KA­DIN) to continually promote development of partner­ship programs between big businesses and small and medium industry (SMI) entrepreneurs. IKM should not be considered as big competitors, but they should become business partners that could strengthen big industries, Weak economic development of Indonesia so far is due to unavailability of upstream to down­stream network between small and big industries. In advanced industrial countries like Japan and South Korea, development of big industries is very strong as it is supported by the existence of small industries. This matter was stated during the opening of Jakarta SMI Expo 2012 at the Industry Ministry.

To micro, small, and medium businesses (UMKM), the existence of KADIN gives a hope. KA­DIN is expected to be able to play a more significant role in co-promoting empowerment of UMKM, es­pecially SMI sector. Since the application of China-ASEAN Free Trade Agreement, many SMI are in bad condition because their products are less competitive than products imported from China.

The management of KADIN must be able to change its reputation as an organization working in favor of all business operators. In this case, there are several attempts that could be taken, among other things, KADIN is expected to become facilitator in fighting for things which have so far been a problem to SMI, such as capital access, high bank loan inter­est rate, technology, marketing, and other.

SMI empowerment and development has be­come one of the priority activities carried out by the Industry Ministry. Empowerment has been conducted through a variety of programs in the framework of solving of problems faced, namely human resources, capital, and technology. These activities are in the form of, among other things, training, technical and non-technical guidance, and promotion.

SMI is one of the foundations of people’s economy, therefore development must continually be carried out in coordination with governmental and non-governmental institutions and organizations. It is expected that development can be conducted prop­erly so it will create a positive impact on SMI develop­ment, which will finally accelerate growth of people’s economy.

Looking at SMI development and growth re­cently, it is not free from commitment and policy as well as programs carried out by the government con­tinually. This is done with enthusiasm so that SMI in Indonesia could be continually growing rapidly and have a high competitiveness to be able to compete in the global economy arena. SMI products are excel­lent, and they are not less competitive than similar products of other countries.

Based on data of 2011, total number of SMI business units reaches 3.9 million units absorbing 9.14 million workers. Currently, SMI only contributes around 10% to GDP. It is expected that in the future, SMI contribution to the GDP will increase to 50% by 2025. 

Business News - December 7, 2012