SMALL AND MEDIUM BUSINESS NEED INNOVATION AND TECHNOLOGY

In the era of globalization and free trade, industrial competiveness in a country is determined by several factors, among others, readiness of the absorption and mastery of technology and the capacity to innovate. Thus, the role of research and development (R&D) is important supporting the industrial development program. The past growing and cutting edge technology must be controlled and disseminated to the public so it can be applied in industry. “That means small and medium business (SMEs) need innovation and technology”, said secretary of the ministry of cooperatives and small and medium enterprises, Agus 

Muharram, in Jakarta on Tuesday (4/23/2013). Ministry of cooperatives and small and medium enterprises, said Agus, is trying to improve the equality and competiveness of products of micro, small, and medium business in Indonesia. The measures, among others, are performed by applying touch of innovation and technology from Japan.  Sometime ago, it visited Japan to establish working relationship with IM-Japan (international manpower development for small medium enterprises of Japan).

Agus said that over the last 20 years, there were approximately 300,000 Indonesian trainees in Japan. He said that the government would encourage the trainees who later returned to the country to develop into superior entrepreneurs armed with the knowledge gained from Japan. Agus said that cooperation to increase product added value and competiveness of SMEs in Indonesia is also performed by the ministry of cooperatives and small and medium enterprises with Enjinia Nusantara. He explained that Enjinia Nusantara is a professional association who once pursued higher education in Japan diploma, bachelor, master, or doctorate and later worked as an industrial professional in Japan.

Agus explained further that innovation is the specific tool of entrepreneurs to exploit change as a different business of service. Innovation can be delivered as a discipline that can be learned and put into practice. According to Agus, innovation is not always a new discovery (invention), meaning that the innovation of a product or service is not always to bring a new invention, innovation can emerge through improved quality of service and products, improving existing system and may also constitute integration of multiple component into a single system.

Agus sees that technology cannot be separated from innovation. By using technology, it will obtain a way or method to give added value to a process, product, and system simplification. In other words, Agus said, there will be no innovation without technological mastery. Arrangement of human resources and technology to spark an innovation is the core of technology-based innovation. According to him, innovation and technology management requires the involvement of academicians to engage in the management system as a provider of educated and skilled personnel, but it also acts as a laboratory for the emergence of innovations to be later applied to industry.

 

In addition, capacity building in SMEs and cooperatives is a necessity, especially, in technology development, organizations operating system and organizational instruments most importantly how cooperative/SMEs can develop the human resources available. Attention to these three factors should be the main focus of cooperative/SMEs to be able to compete with other alternative forms of economic institutions. These will be a strong pillar for cooperative /SMEs to be able to continue to develop business wings that can be run by cooperatives while attempting to contribute to improving the welfare of the society at large.

Business News - July 26, 2013

TO UPGRADE WORKERS’ COMPETENCE IN TEXTILE INDUSTRY

he government set target to employ 1 million workers in 2013, to reduce unemployment. In spite of downturn in unemployment figure, the absolute figure was still high due to various factors like the gap between the number of graduates and the need for employees and the gap between the competence of graduates and competence standard set by the industry.

For every 1% growth, the TPT industry would absorb around 10,000 new workers. It was estimated that this year the TPT industry would grow by 5%, mostly by support of new investment in garment industry. Last year, around 100 companies in the TPT industry were starting to operate, mostly recolated garment factories from china.

Data of the Ministry of industry and the Central Statistics Board [BPS] had it that TPT industry employed around 1, 47 million workers in 2011, and increase of 4,78% of total workers which was previously posted at 1.4 million people. This year, a worker in this sector was predicated to increase by more than 1.5 million workers due to realization of new investment in the garment sector.

The secretary General of the Ministry of Industry, Anshari Bukhari, stated in Jakarta on Tuesday [23/4] that he had prepared a number of development and expansion programs which was projected to grow by 6.52% in 2014. The program was revitalization of the Textile Service Units [UPT] through procurement of machines, extension of machinery aid and textile equipments and restructurization of TPT machines by way of price discounts. In addition to that also technical training for Human Resources and counseling of designers and promotion through various expo activities.

Ansari stated that the TPT industry was sustainer of growth of the domestic non oil-gas sector [manufacturing] which needed to be promoted. How-ever, he admitted that the challenges to be faced by the TPT industry in the future was to step up quality of human resources which had been below the standard of industry. Besides Ansari added, productivity of local workers was rated as still low which affected company’s productivity.

Data of the ministry of industry had it that unemployment was posted at 10.9 million people in 2005. The number went down to 7.7 million in 2011. In 2011-2011, economic activities in the formal sector had generated 2.67 million workers so unemployment figure went down and an informal worker was reduced to 1.54 million people. Now formal workers constituted 38.89% and informal workers constituted 60.14% of total productive people.

Ansari again reminded that quality of Indonesia workers in the textile-and –textile industry [TPT] was still low. Therefore trainings would be necessary. The Ministry of Industry, he said, had schemed up plans to set up training centers whereby they could step up their competence. He underscored the importance of stepping up competence of Indonesian workers in jacking up productivity.

Not less important was the effort to consolidate the workforce to make them more competent than they were today. According to Ansari, with the betterment of Indonesian workers’ competence, they did not have to find a job abroad, as they would get better pay at home. “As the nature of the industry is labor intensive, workers skill and competence is an important aspect and must therefore be upgraded by quality” Ansari remarked.

 

 He was also expecting that the Indonesian textile industry was able to contribute 5% to the world’s supply in ten years. He said that Indonesia was not the biggest textile producer but was in the list of top ten producers in the world. Even in ASEAN Indonesia’s raking was below Vietnam which was the number one textile producer country.

Business News - July 26, 2013

TO UPGRADE WORKERS’ COMPETENCE IN TEXTILE INDUSTRY

The government set target to employ 1 million workers in 2013, to reduce unemployment. In spite of downturn in unemployment figure, the absolute figure was still high due to various factors like the gap between the number of graduates and the need for employees and the gap between the competence of graduates and competence standard set by the industry.

For every 1% growth, the TPT industry would absorb around 10,000 new workers. It was estimated that this year the TPT industry would grow by 5%, mostly by support of new investment in garment industry. Last year, around 100 companies in the TPT industry were starting to operate, mostly recolated garment factories from china.

Data of the Ministry of industry and the Central Statistics Board [BPS] had it that TPT industry employed around 1, 47 million workers in 2011, and increase of 4,78% of total workers which was previously posted at 1.4 million people. This year, a worker in this sector was predicated to increase by more than 1.5 million workers due to realization of new investment in the garment sector.

The secretary General of the Ministry of Industry, Anshari Bukhari, stated in Jakarta on Tuesday [23/4] that he had prepared a number of development and expansion programs which was projected to grow by 6.52% in 2014. The program was revitalization of the Textile Service Units [UPT] through procurement of machines, extension of machinery aid and textile equipments and restructurization of TPT machines by way of price discounts. In addition to that also technical training for Human Resources and counseling of designers and promotion through various expo activities.

Ansari stated that the TPT industry was sustainer of growth of the domestic non oil-gas sector [manufacturing] which needed to be promoted. How-ever, he admitted that the challenges to be faced by the TPT industry in the future was to step up quality of human resources which had been below the standard of industry. Besides Ansari added, productivity of local workers was rated as still low which affected company’s productivity.

Data of the ministry of industry had it that unemployment was posted at 10.9 million people in 2005. The number went down to 7.7 million in 2011. In 2011-2011, economic activities in the formal sector had generated 2.67 million workers so unemployment figure went down and an informal worker was reduced to 1.54 million people. Now formal workers constituted 38.89% and informal workers constituted 60.14% of total productive people.

Ansari again reminded that quality of Indonesia workers in the textile-and –textile industry [TPT] was still low. Therefore trainings would be necessary. The Ministry of Industry, he said, had schemed up plans to set up training centers whereby they could step up their competence. He underscored the importance of stepping up competence of Indonesian workers in jacking up productivity.

Not less important was the effort to consolidate the workforce to make them more competent than they were today. According to Ansari, with the betterment of Indonesian workers’ competence, they did not have to find a job abroad, as they would get better pay at home. “As the nature of the industry is labor intensive, workers skill and competence is an important aspect and must therefore be upgraded by quality” Ansari remarked.

 He was also expecting that the Indonesian textile industry was able to contribute 5% to the world’s supply in ten years. He said that Indonesia was not the biggest textile producer but was in the list of top ten producers in the world. Even in ASEAN Indonesia’s raking was below Vietnam which was the number one textile producer country.

Business News - July 26, 2013

AEC: OPPORTUNITY, BUT BE CAUTIOUS ABOUT IT

Indonesia Ambassador to Thailand

The Asean Economic Community [AEC] which started in 2006 could be an opportunity for Indonesia to enter the market of agro-products in Asean, especially Thailand. For that Metter Indonesia should be well prepared so as not to become the market for Thailand’s product instead.

Lufthi Rauf, the Indonesian Ambassador to the kingdom of Thailand, on the occasion of the workshop entitled Readiness in facing the AEC 2015 in Bandung sometime ago stated that AEC opened opportunities for Indonesia to market products in Asean countries including Thailand, Indonesia had the chance to fill in the need for raw materials.

“Thailand was still need of raw materials from Indonesia, for example minerals and fish and semi-finished products. Moreover so far Indonesia and Thailand were inter-complementary in production” Lufthi said.

Indonesia could benefit from marketing network international scaled commanded by Thailand. Moreover Thailand regularly staged exhibitions of international scale. “These opportunities could be taken by Indonesia as alternative medium to market Indonesian agro-products.” Lufthi remarked.

The people of Thailand were relatively prosperous were potential market for Indonesia. With limited human resources [today the average age of Thai farmers were 55 years] Thailand’s business people would strive to find a market niche in agriculture in Indonesia.

Therefore, quality would be the determinant factor of success of Indonesian products in Thai’s market. Therefore the effort to upgrade quality was indispensable, through sustainable R & D. the partnership platform between farmers and private sector must also be enhanced because it would motivate farmers to meet high quality standards.

To Stay on the Alert

           

In spite of the opportunity to fill in Thailand’s market, Indonesia still had to watch on their ago products. The government of Thailand was giving serious attention to agriculture through consolidation of R & D activities in technology.

The government of PM Yingluck Shinawatra made a database of family head of farmers which were regularly updated whereby to publicizes or distribute policies and rules. Now the government of Thailand had launched Farmers ID Card to ease identification or distribute subsidies or apply new rules.

In addition to that the government of Thailand also developed sustainable policies in alternative agriculture or organic industry. The government of Thailand encouraged increase of added value of agro-products which were agro-commodities, expansion of market share, stepping up quality and uplifting international reputation.

Since 2012, the government of Thailand had issued 800,000 credit cards for farmers. The objective was to enable farmers to obtain capital for farmers without being trapped in debt. The credit card was issued by the bank of agriculture and agriculture cooperatives [BAAC], a government owned bank. As planned this year another 2 million credit cards would be released.

Thailand had also exercised land reforms of agricultural land by giving opportunity to land owners. Agriculture land was taken from the government’s land, land provider and the king’s land. Farmers were getting certificate of Utility but only for the purpose of agriculture.

To maintain the function of land as land for agriculture, the ownership of land could not be transferred. It could only be passed on to the heirs who were also farmers. If there was no heir, the certificate would again be transferred to the Ministry of agriculture of Thailand to be re-distributed to farmers who needed land. By August 2012 there were at least 5.5 million ha of land which was distributed to 2, 5 million family heads who were farmers.

 

Other point to be anticipated by the Indonesian government was that the board of investment of Thailand on August 2012 last had identified Indonesia, Vietnam and Myanmar as investment targets for Thailand investors. Data of Thailand’s investments showed that now there were 17 projects worth USD 68 million. Compared to other Asean countries Thailand’s position as investor in Indonesia was now the third next to Singapore and Malaysia.

Business News - July 26, 2013