Currently, Micro, Small and Medium Enterprises (MSMEs) in Indonesia are growing and the number is also increasing. MSMEs are of special concern to the government because they are able to have an impact on the country’s economy. Therefore, the businesses of MSME players must survive in the future. However, to remain relevant and competitive amidst global changes, MSMEs must adapt to technological developments and face the challenges that exist in the future. To achieve this, there are several criteria for MSMEs that can guide their journey to future success. These criteria cover various aspects, ranging from product and service innovation, utilization of digital technology, to sustainability and responsibility. So, what are the criteria that MSMEs must have to continue to grow in the future? Well, for KH friends who are business actors, especially MSMEs, see the following explanation of the five criteria for MSMEs in the future!
Overview of MSME Development in Indonesia
The development and growth of MSMEs in Indonesia has become a focus of the government and society due to their important role in the country’s economy. MSMEs contribute to job creation, income, and economic equity. MSMEs are also seen to be the right solution in facing a recession if their existence can be maximized. MSMEs have proven to be a business unit that is able to survive during difficult times, such as the 1998 crisis and also during the Covid-19 pandemic. MSMEs are at the forefront of being able to survive and become a way out in facing economic problems. Based on this, Indonesia has the potential to become a strong economic base because the number of MSMEs in Indonesia has reached 64.2 million units, with details of 63.4 million micro businesses, 783.1 thousand small businesses, and 60.7 thousand medium businesses. MSMEs have also contributed to absorbing 119.6 million or 96.92% of the total workforce in Indonesian business units.
What are the criteria for future MSMEs?
According to the Ministry of Cooperatives and SMEs (Kemenkop), MSMEs in Indonesia are described as businesses that can dominate small and medium enterprises, are research-based, close to technology, value creation, market driven, understand the market, recognize change, and innovative. MSMEs in the future must have certain criteria that make their business timeless. Where MSME players must be able to develop their business and fulfill these criteria. In this regard, the Ministry of Cooperatives and SMEs divulged five criteria for future MSMEs that will bring Indonesian MSMEs to a better direction. What are they? Here is the explanation:
Has Complete Business Legality
MSMEs that are ready to compete in the future must have complete business legality. That way, MSME players will be able to access development programs and financing from the government and other institutions. Indirectly, legality also provides a guarantee for MSMEs to be able to carry out larger business cooperation in the future. Where MSME players can also collaborate with other parties and enter into a larger supply market. As a first step, KH Buddy can register your business so that you can get a Business Identification Number (NIB). The NIB, which is issued by the Online Single Submission (OSS) agency, is also valid as a Company Registration Certificate (TDP), Import Identification Number (API), and Customs Access. Furthermore, you can complete other legal documents such as a Trade Business License (SIUP), Micro and Small Business License (IUMK), and Taxpayer Identification Number (NPWP) of course.
Leveraging Science and Research to Innovate
Future MSMEs must be able to process science and data-based research to produce innovations that can develop their businesses. This research will later shape MSMEs to create innovative products with unique values that are needed by the market. This research can be done simply through surveys. KH buddy can determine the research points that you want to ask the respondents. After finding what will be considered, you also need to do the research repeatedly and consistently. That way, the results of the research can be used as input and development for your products and brands.
Optimizing Digitalization in Business Activities
It is undeniable that the international market is increasingly reachable thanks to technology. Therefore, future MSMEs need to have the ability to innovate and adopt new technologies. Digitalization is not just about marketing products online, but also applying an efficient mindset by utilizing technology for business processes. Moreover, nowadays consumers have also started to be tech-savvy. Technological developments such as artificial intelligence, big data, Internet of Things (IoT), and blockchain provide great opportunities for MSMEs to improve operations, develop new products and services, and expand market reach. MSMEs that are able to keep up with technological developments and integrate them into their business activities will have a competitive advantage in the future. This is because the utilization of digital technology has become a must for MSMEs facing fast-paced challenges in the future.
Sustainability and Social Responsibility
MSMEs of the future need to pay attention to sustainability aspects in their operations. Moreover, consumers are increasingly aware of environmental and social issues, so MSMEs that uphold social and environmental responsibility will be more attractive. Being an environmentally friendly business, using sustainable raw materials, considering the product life cycle, and contributing to the surrounding community are important factors that will become the main criteria for MSMEs in the future. In other words, social business must start to be used as a business model by MSMEs, so not only looking for profits, but MSMEs can actually become empowerment leaders in the midst of society.
Connectivity and Building Collaboration
The last criteria for future MSMEs is connectivity and collaboration. Future MSMEs need to develop strong connectivity with other businesses, whether in the form of partnerships, networks, or digital platforms. Connectivity and collaboration allow MSMEs to expand their market reach, access new resources and knowledge, and share risks and benefits with business partners. Yes, only MSMEs that can collaborate effectively will be more resilient and competitive in the future.
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This is an explanation of the five criteria for future MSMEs. Awareness of the importance of MSMEs for economic sustainability in Indonesia must be outlined in government policies and regulations to be able to manage and strengthen the role of MSMEs so that they can continue to grow and develop. In addition, it is also necessary to facilitate the processing of legality for MSMEs to help MSMEs Upgrade to easily penetrate the global market. Legality is important because many MSMEs still do not have business legality, making it increasingly difficult to develop and also difficult to access capital.
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Even though legality can provide many benefits for MSME players, especially if they have a business entity in the form of a PT, such as:
- Facilitate business development
- Ease of penetrating the global market
- Ease of obtaining capital loans
- Means of promotion
- Proof of legal compliance
Well, to help your MSMEs to survive and be competitive in the future, KH Buddy can consult with Kontrak Hukum. We have been trusted by more than 5 thousand companies in Indonesia to assist their business needs, including the fulfillment of legality documents. The legality services provided include business entity establishment, NPWP registration and other business licenses such as NIB, SIUP, and IUMK. How about it? Ready to become a competitive MSME in the future? For service booking information, please visit the KH Services – Starting a Business page. If you have any questions, don’t hesitate to consult with us at Ask KH or via Direct Message (DM) to Instagram @kontrakhukum.
