As we know, Micro, Small and Medium Enterprises (MSMEs) play a very important role in the growth of the national economy. Not surprisingly, MSME empowerment and inclusiveness is one of the priority issues in Indonesia’s role as Presidency of Group 20 (G20) and The Business 20 (B20) in 2022. One of the strategies is through collaboration between MSMEs and corporations or large companies. This is part of an effort to increase collaborative investment in order to realize inclusive economic growth. Not only through investment, the collaboration can also be done through the provision of knowledge transfer, capacity building, and technical improvement from large companies to MSMEs. President Joko Widodo stated that collaboration between MSMEs and large companies is very important for MSMEs because it can bring many benefits, such as:
- MSMEs can enter the global production chain,
- Increase opportunities for MSMEs to upgrade, and
- Improve the quality of MSME businesses to become more competitive.
In line with President Joko Widodo’s direction, the Ministry of Investment/BKPM has also included the collaboration of MSMEs with large companies as one of the agency’s seven Key Performance Indicators (KPIs). The third point of the KPI states that BKPM encourages large investments to partner with MSMEs. Therefore, Indonesia’s role in the G20 and B20 Presidency is expected to be fully optimized to encourage greater collaboration potential between large companies and Indonesian MSMEs, especially foreign companies, so as to achieve the target of inclusive economic growth. Moreover, previously, there have been quite a number of actions by a number of large companies and/or foreign companies in Indonesia that have realized this collaboration. This is evidenced by BKPM data which shows an increase in the total value of cooperation contracts between Foreign Investment (PMA)/Domestic Investment (PMDN) and MSMEs in 2021. Where the total value of the cooperation contract grew 82% compared to the previous year to IDR 2.7 trillion. The number of MSMEs involved also increased significantly by 99% from 192 in 2020 to 383 MSMEs in 2021. In terms of investment, it also showed a positive signal, where during January-June 2022, the realization of PMA investment reached IDR310.4 trillion (53.1%) and the realization of PMDN investment reached IDR274.2 trillion. The collaboration between MSMEs and large companies is certainly good news for efforts to improve the MSME class in the country, especially in the midst of the current post-pandemic economic recovery.
So, what are the benefits of large companies collaborating with MSMEs?
In addition to being beneficial for improving the class of MSMEs, collaborations carried out by large domestic and foreign companies such as PMA also bring benefits to these companies, such as the opportunity to manage the potential of existing resources. Through collaboration with MSMEs, large companies can get closer to business actors in the regions and work together to process natural resources such as plantations, fisheries, agriculture, and tourism. Moreover, after the passing of Law No. 11 of 2020 on Job Creation, this collaboration has also been made easier, especially in terms of investment thanks to the now simpler licensing system. The business activity process has now been changed from permit-based to risk-based. The system called Risk Based Licensing can be obtained online through the Online Single Submission Risk Based Approach (OSS-RBA). In addition, the Chairperson of the Indonesian MSME Association, Hermawati Setyorinny, stated that the government will also provide attractive incentives for large companies that provide guidance and collaboration with MSMEs, such as in the form of reduced duties or taxes. From this explanation, it can be concluded that collaboration between large companies and MSMEs is not only beneficial for the country or business that is given capital, knowledge, and capacity building, but also for the large companies themselves. So hopefully, the G20 presidency can be a momentum for Indonesia to improve the economy and the role of MSMEs through collaboration, especially with foreign countries or companies.
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To ensure that the collaboration between MSMEs and large companies and/or foreign companies can run well and make a significant contribution, it is better for both to be bound in a partnership agreement. Considering that a cooperative relationship cannot be carried out only on the principle of trust, because it is prone to conflict and differences of opinion between the parties involved. Therefore, the existence of a partnership agreement serves to prevent problems in the future and each party can know their rights and obligations, so as to support the smooth running of the collaboration. Well, for KH pals who are also currently doing business and want to establish partnerships with both MSMEs, investors, and large domestic and foreign companies, don’t miss out on legally binding it in a partnership agreement! Take it easy, Sobat KH leave the management to Kontrak Hukum. Through the partnership agreement service, we can help you to make and review the agreement contract according to your cooperation needs.
What are you waiting for? Expand your business network with a safe and secure partnership by visiting https://kontrakhukum.com/kontrak. For questions about MSMEs, companies, or other business needs, KH Friends can also contact us via the following link Ask KH and Direct Message (DM) to Instagram @kontrakhukum.
