Abstract
This study aims to examine the development of Indonesian micro and small enterprises (MSEs) in utilizing the internet for their businesses. This is a descriptive study in nature, which analyses secondary data on MSMEs. It also reviews key literature on the use of ICT by MSMEs in developing countries. It shows that MSMEs, dominated by MSEs, have been the main player in Indonesian domestic economic activities as they accounted for more than 90 per cent of all firms and contributed to more than 50 per cent of gross domestic product (GDP). But, only a small fraction of total MSEs in Indonesia that utilize the internet for business, and the intensity of internet usage by MSEs varies by province and type of business. This is the first macro-level study ever conducted in Indonesia on the use of internet by MSEs based on national data from 2016 Economic Census conducted. Thus, findings of this study may add new empirical evidence to the literature on the utilization of ICT by MSMEs in developing countries.
Highlights
It is undeniable that information and communication technology (ICT) has changed many things in the business; it has changed the way businesses communicate to each other or deal with their customers, distributors and suppliers, and through digital marketing or e-commerce it has changes the way they promote and sell their products or purchase their raw materials
As the competition faced by MSMEs increasingly tight, it is vital for these enterprises to use modern technologies, including ICT as among their sources of competitive advantages
There are many indications from various sources that in the past decade more and more MSMEs are utilizing ICT or adopting e-commerce; still many more MSMEs, especially MIEs, which do not/have not utilized this technology in running their business activities for various reasons. In accordance with this development, internet use, especially e-commerce, among these enterprises has recently become a popular topic for researchers in the fields of MSMEs and in such as electronic business, information management, information systems and entrepreneurship; though research investigating on the adoption of e-commerce by MSMEs is still small in number
Summary
It is undeniable that information and communication technology (ICT) has changed many things in the business; it has changed the way businesses communicate to each other or deal with their customers, distributors and suppliers, and through digital marketing or e-commerce it has changes the way they promote and sell their products or purchase their raw materials. Digital Marketing has become the trend in targeting both current and prospective customers. Social media is one of the best channels of online marketing, and Instagram is one of the fastest growing platforms available today. To be able to survive in this new business environment all companies including MSEs are pushed to adopt this technology. MSEs which not adopt this new technology and business practice will be displaced by their competitors and abandoned by their customers
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