Indonesia must immediately plan its transformation to a new lifestyle, one of which is marked by digitalization.
By
KOMPAS EDITOR
·3 minutes read
Indonesia must immediately plan its transformation to a new lifestyle, one of which is marked by digitalization.
Before the Covid-19 pandemic deconstructed life as we knew it for people all over the world, digitalization was already projected to change the future direction of human life. Internet technology and digital technology have influenced our lives from the telecommunications sector to finance and manufacturing automation, and to the birth of artificial intelligence.
A new normal for the future is in the making, depending on how the pandemic progresses and the development of vaccines and effective medical treatment, including the possibility of the virus mutating in an unknown direction.
These uncertainties and the necessity to social distance and stay at home has prompted many people to shift their daily activities online, from shopping to studying to entertainment, and to work. Companies, on the other hand, are encouraging as many employees as possible to quickly master digital technology so they can serve customers and business partners.
Internet technology and the large number of smartphone users in Indonesia – in 2018, this figure was over 100 million – have presented an opportunity for micro, small and medium enterprises (MSMEs) to market their products online. Even before the nationwide Covid-19 outbreak, in addition to widespread smartphone ownership, the availability of digital technology in the financial sector and digital advertising through social media had become driving forces for MSMEs to shift to the internet. However, the number of MSMEs using online technologies is not as large as expected. According to the Cooperatives and Small and Medium Enterprises Ministry, only 8 million MSMEs use digital technology, or around 13 percent of all MSMEs in the country.
A number of issues are behind the low number of MSMEs using digital technology, including limited technological skills, unequal access to and availability of reliable internet networks, and a knowledge gap in online payment systems.
The government is turning to MSMEs as a source of recovery amid the social and economic conditions induced by the health emergency. Therefore, digitally transforming MSMEs requires strategic and policy planning across institutions and sectors.
Development on the digital infrastructure of the Palapa Ring satellite network must be continued so it reaches eastern Indonesia and to accommodate developments in telecommunications technology.
What is no less important is a social engineering plan to change the work behavior and business model of our MSMEs towards operating online, starting from the supply chain system to production, promotion, marketing, and to payment, especially so they are able to compete with MSMEs in other countries.
We had 64.2 million MSMEs in 2018. Mature strategies and policies are needed so the internet can leverage the competitiveness of Indonesian MSMEs at both the national and global levels. We hope that the ease of doing business resulting from the Job Creation Law will truly enable MSMEs to create quality jobs, just like the intended objective that led to the law’s creation.