RECENT DEVELOPMENT OF MICRO, SMALL AND MEDIUM ENTERPRISES IN INDONESIA

Abstract

This paper examines the development of micro, small and medium enterprises (MSMEs) in Indonesia. It aims to answer the following research questions. First, how important are MSMEs? Second, what are their main constraints? Third, how was the impact of the COVID19 pandemic on them? This study adopted descriptive analysis using secondary data. It shows that MSMEs are dominated by micro and small enterprises (MSEs), and accounted for almost 100% of all firms but only contributed an average per year of around 58 % of the GDP. Their main constraints are a lack of capital, and difficulties in marketing and in the procurement of raw materials. During the pandemic, many MSEs were severely affected although it varied by industry. This study has, however, one limitation. Although the study aims to examine MSMEs, the focus is however on MSEs in the manufacturing industry due to a lack of national data.