Small And Medium Enterprises In Indonesia Research Articles

The Revival of SMEs in Indonesia from the Impact of the Covid-19 Pandemic

This research examines the revival of Small and Medium Enterprises (SMEs) in Indonesia amidst the Covid-19 pandemic. This pandemic presents major challenges and is a catalyst for unprecedented change in the SME sector. This article aims to identify and analyze the main factors that play a role in the resilience and growth of Indonesian SMEs during and after the pandemic. Utilizing quantitative data and qualitative interviews, this research reveals that digital transformation and government stimulus play an important role. The research results show that SMEs that use digital marketing show good adaptability and growth, and benefit from the shift in consumer behavior to online platforms. The Indonesian government's fiscal support, by assisting struggling SMEs, enables business continuity and recovery from the impact of the pandemic. The study concludes with policy recommendations to maintain the growth and resilience of SMEs, emphasizing the importance of digital inclusion, easy access to financial institutions, and community support networks. The impact of this research is significant for policymakers, business leaders, and community developers aiming to protect the SME sector from future crisis

Analysis of the Impact of Government Policy, Technological Innovation, and Availability of Business Capital on the Growth of Small and Medium Enterprises in Indonesia

This research studies the complex relationships between government policies, technological innovation, availability of venture capital, and the growth of Small and Medium Enterprises (SMEs) in Indonesia. Using Structural Equation Modeling with Partial Least Squares (SEM-PLS), this research analyses data from a sample of 130 SMEs across different industries and regions. The measurement model assessment confirmed the reliability and validity of the constructs, while the structural model analysis revealed significant positive relationships between government policy effectiveness, technological innovation, venture capital availability, and SME growth. The robustness of the findings was confirmed through bootstrapping, and the model fit index validated the adequacy of the estimated model. The R-squared values indicate the ability of the model to explain most of the variance in SME growth. Hypothesis testing further corroborated the significant impact of Availability of Venture Capital, Government Policies, and Technological Innovation on SME growth. The implications of these findings extend to policymakers, business owners, and stakeholders, guiding the formulation of strategies that foster an enabling environment for SMEs in Indonesia.

The Influence of Business Intelligence to Maintain Customer Relationships in Small and Medium Enterprises in Indonesia

The adoption of Business intelligence (BI) has become increasingly prominent among organizations for attracting customers and gaining a competitive edge. This becomes even more important for small and medium enterprises (SMEs) which face immense pressure to retain existing customers and attract more customers for survival. This study presents a systematic literature review of studies investigating the impact of BI on customer relations with exclusive focus on Indonesia, which has a growing number of SMEs (also called ‘UMKMs’). By examining 15 papers published between 2013 to 2024, the findings of the study highlight that BI contributes to building better connections with customers and making them feel more engaged and satisfied. This study provides valuable insights for SMEs in Indonesia to adopt BI to attract more customers. The findings of the study also lay the foundation for future research, especially those wanting to perform an empirical investigation.

Linking supply chain management practices with supply chain performance and food and beverage: Evidence from SMEs' competitive advantage

The development of technology and science in the Industrial Revolution 4.0 era requires companies to increase effectiveness and efficiency to maintain a competitive advantage. Supply chain management is the integration of business processes involving end customers and key suppliers whose function is to provide value to customers and stakeholders by providing products, services, and information. Implementation of supply chain management is considered an operational function or company activity that greatly determines the effectiveness and efficiency of the supply chain. This research aims to analyze the relationship between the implementation of supply chain management and the performance of small and medium enterprises (SMEs), the relationship between supply chain management, and the relationship between competitive advantage and the performance of SMEs. The research uses a quantitative descriptive approach. The quantitative approach is data in the form of numbers which are generally arranged through structured questions. The questionnaire contains statement items designed using a Likert scale from 1 to 7. The data in this study uses cross-sectional data because the data collection was carried out in a certain period. The data was obtained from distribution of online questionnaires via social media. The unit of analysis used in this research is the owners/managers of SMEs in Indonesia. The sampling technique used in this research is a non-probability sampling technique, namely purposive sampling. The total sample for this research was 432 respondents. The data management used in this research is the Structural Equation Model (SEM) method, which is a collection of statistical testing techniques on a series of relatively complex relationships, simultaneously. The data processing tool is SmartPLS 3.0. The SEM technique is used to examine and justify different hypotheses of the survey. Hypothesis testing is carried out by comparing the p-value with a confidence level (alpha) of 5% (𝛼 = 0.05). The results of this research show that the implementation of supply chain management has a positive effect on the performance of SMEs. In addition, supply chain management has a significant effect on competitive advantage while competitive advantage has a significant effect on SME performance. This research shows that supply chain management has a positive influence on competitiveness both with performance and competitiveness. Descriptive analysis found that supply chain management indicators have sufficient value and have a big impact on performance and competitiveness.

The Extension of the UTAUT2 Model: A Case Study of Indonesian SMEs Acceptance of Social Commerce

An entirely updated e-commerce platform referred to as Social Commerce was developed in response to the rise in social media use. Social commerce integrates interactions between buyers and sellers made possible by social media platforms and Web 2.0 technology. It is frequently seen as a subfield of e-commerce. Social commerce has been successfully introduced in developing countries. Many businesses around the world are small and medium enterprises (SMEs). For instance, SMEs in Indonesia can contribute up to 60.34% of the country's GDP and have a substantial labor pool. Using social commerce as an e-commerce platform can significantly improve the operational efficiency of small and medium-sized enterprises (SMEs). However, little empirical research has specifically examined how SMEs embrace social commerce. Given the high level of concern, further research is required. Therefore, the current study experimentally examined how local SMEs in rural Indonesia introduced social commerce. The study was modeled using the Unified Theory of Technology Acceptance and Use (UTAUT) 2 model and several previous studies. SmartPLS 4 software was used to model and evaluate data using partial least squares structural equation modeling (PLS-SEM). The findings of the 114 samples showed that relative advantage, social support, facilitation conditions, and the government's support of social commerce influenced behavioral intention to use social commerce. Behavioral intention to use social commerce influences the actual use of social commerce. The findings of this study can help local governments and policymakers develop social trade promotion regulations to help potential SMEs and entrepreneurs gain long-term business support.

Talent Management Focus on Small and Medium Enterprises A Systematic Literature Review

This systematic literature review explores the employee perspective on talent management within the context of Small and Medium Enterprises (SMEs) in Indonesia. Out of a total of 208 articles initially considered, the final analysis focuses on seven key articles for comparative evaluation. The research delves into various aspects of talent management, including recruitment strategies, employee development initiatives, and retention policies implemented by SMEs. The study aims to provide a comprehensive understanding of how talent management is perceived and experienced by employees in the unique setting of SMEs in Indonesia. By synthesizing findings from the selected articles, the review addresses crucial factors such as the role of technology, shifts in organizational culture, and specific challenges faced by employees in managing talent within SMEs. Through this systematic approach, the research contributes theoretical insights and practical implications for enhancing talent management practices in the SME sector. The findings aim to offer valuable guidance to SME leaders, human resource practitioners, and researchers seeking to optimize talent management strategies in the dynamic business landscape of Indonesia. The research that integrates the employee perspective into talent management is still relatively scarce, especially with a focus on small and medium-sized micro enterprises in Indonesia. This literature review specifically concentrates on the employee's standpoint within the context of talent management. A systematic literature review approach is employed in this study, assisted by the VOS Viewer application. The PRISMA method is used for the review. Out of the 154 Scopus articles reviewed, including empirical studies, conceptual articles, and book chapters, 7 articles specifically address the employee perspective in talent management research in SMEs. The literature review identifies that, although recent literature involves employees as key participants in strategic talent management, conceptual and empirical articles in this stream are still limited and require further conceptual and empirical development.

The Extension of the UTAUT2 Model: A Case Study of Indonesian SMEs Acceptance of Social Commerce

An entirely updated e-commerce platform referred to as Social Commerce was developed in response to the rise in social media use. Social commerce integrates interactions between buyers and sellers made possible by social media platforms and Web 2.0 technology. It is frequently seen as a subfield of e-commerce. Social commerce has been successfully introduced in developing countries. Many businesses around the world are small and medium enterprises (SMEs). For instance, SMEs in Indonesia can contribute up to 60.34% of the country's GDP and have a substantial labor pool. Using social commerce as an e-commerce platform can significantly improve the operational efficiency of small and medium-sized enterprises (SMEs). However, little empirical research has specifically examined how SMEs embrace social commerce. Given the high level of concern, further research is required. Therefore, the current study experimentally examined how local SMEs in rural Indonesia introduced social commerce. The study was modeled using the Unified Theory of Technology Acceptance and Use (UTAUT) 2 model and several previous studies. SmartPLS 4 software was used to model and evaluate data using partial least squares structural equation modeling (PLS-SEM). The findings of the 114 samples showed that relative advantage, social support, facilitation conditions, and the government's support of social commerce influenced behavioral intention to use social commerce. Behavioral intention to use social commerce influences the actual use of social commerce. The findings of this study can help local governments and policymakers develop social trade promotion regulations to help potential SMEs and entrepreneurs gain long-term business support.

The quest of peer-to-peer lending applications marketing to small and medium enterprises: Assessing intention to recommend

This study aims to determine the effect of peer-to-peer lending (P2PL) on small and medium enterprises (SMEs) underpinned by the theory of planned behavior and asses its impact on the borrower’s intention to recommend such a platform. This paper used a quantitative survey method with partial least squares structural equation modeling to analyze the data collected through a questionnaire. The data were obtained from 395 respondents who are entrepreneurs or business leaders in SMEs in Indonesia and had experience in borrowing business loan funds from the P2PL apps. The structural questionnaire was distributed from January to May 2022. The results of this study indicate that the three core components of the theory of planned behavior (attitudes, subjective norms, and perceived behavioral control) can significantly influence the intention to continue usage and the intention to recommend with an R-squared value of 0.626, which indicates a meaningful explanatory power. The results proved that perceived benefits and risk and electronic word-of-mouth are the antecedents with significant influence. Moreover, this study provides new insights into how self-efficacy and mental accounting can influence perceived behavioral control. These findings could suggest that P2PL management should be more innovative in developing effective marketing strategies based on the traits and borrower’s points of view. Particularly, they could emphasize customer segmentation based on mental accounting.

Women entrepreneurs’ struggles during the COVID-19 pandemic and their use of social media

Small and medium enterprises (SMEs) throughout the world are facing a very complicated crisis due to COVID-19 pandemic and other structural challenges. This study is aimed at demonstrating the challenges faced by SMEs, particularly the struggles that women entrepreneurs of SMEs in Indonesia experienced to survive against these structural issues: COVID-19, digital presence and the male-dominated business sector in the country. Focusing on female-owned businesses in Yogyakarta, Indonesia, this paper carefully considers how social media platforms helped these businesses to continue. Using a descriptive quantitative approach, we collected data from 130 respondents and found that the COVID-19 pandemic has severely affected women entrepreneurs—especially those operating small and medium enterprises. They have experienced reduced income due to decreased sales, disrupted supply chains, difficulty paying credit instalments, and lack of access to government assistances. This study further sheds light on social media’s important role in sustaining women-owned businesses. Facebook, WhatsApp, and Instagram have become the new tools through which women promote their products and reach new audiences. To overcome this issue, we advise a stronger government intervention to women-owned SMEs in the post-pandemic. Aside from managing social media for selling, we recommend women-owned small companies to internally intensify digital engagement, promotions, coupled by innovative products and attractive offers such as discounts.

Management of CashFlow Practices in Micro Enterprises: Perspectives from Women-Owned SMEs

This study explores the cash management practices of women-owned Small and Medium Enterprises (SMEs) in Indonesia. Through qualitative research using the ethnographic method, including observations and interviews with three female entrepreneurs in Batu and Malang, East Java, the study reveals insights into their practices. The findings show varying understandings of cash flow management among female entrepreneurs. Cash flow planning is done by estimating monthly income and expenses, setting sales targets, and creating monthly financial reports. Entrepreneurs have different perspectives on business development and expansion. Some plan to expand their businesses, while others focus on stable growth. Debt is seen as a burden if not managed well but can be beneficial for business development. Entrepreneurs also prioritize savings for emergencies and business needs. These findings contribute to understanding the cash management practices of women-owned SMEs in Indonesia. The study emphasizes the importance of financial literacy and provides insights into cash flow management practices that can enhance business operations.

Does The Indonesian National Standard (SNI) for Products in SMES Influence Cleaner Production Practices? A Snapshot of Best Practices from Yogyakarta, Indonesia

This article investigates the extent to which the Indonesian National Standard (SNI) for products adopted and applied by small and medium enterprises (SMEs) in Yogyakarta, Indonesia, can encourage them to effectively implement a quality management system (QMS) within their internal organizations, which eventually affects and benefits their process performance and clean production practices. Survey data collected from 44 respondents in 12 SMEs with SNI-certified products were processed and examined using descriptive analysis and regression analysis. The results showed that these could implement QMS effectively partly because it is a requirement for the SNI certification of the proposed product. The effectiveness of QMS implementation affects the achievement of process performance in that it can reduce the number of defective products, process costs, and process cycle times. According to the respondents, an effective QMS makes every activity and action taken in the production process more environmentally friendly and leads to cleaner production practices. These findings can help further research determine the model's feasibility to design and develop a better framework that promotes QMS and clean production practices, especially among SMEs in Indonesia.

Strategic orientation and its role in linking human capital with the performance of small and medium enterprises in Indonesia

Purpose This study aims to investigate the ways that human capital influences the strategic orientation variables entrepreneurial orientation (EO) and market orientation (MO), which ultimately leverage the firm performance of small and medium enterprises (SMEs) in Indonesia. Design/methodology/approach This study used a quantitative method with a total of 274 SMEs in the Regency of Gresik, East Java, Indonesia, as the observable population. Furthermore, the identified samples obtained through the random sampling technique were determined using the Slovin formula with 163 SMEs used for analysis. As the means of analysis, this study used a statistical approach by using PLS-SEM statistics from SmartPLS software. This analytical tool has been proven to be a robust statistical tool that has been used in many marketing studies. Findings This study found that human capital is a key determinant of EO and MO as strategic orientations of SMEs. Furthermore, this study highlighted that SMEs’ strategic orientations (i.e. EO and MO) provide a valuable thrust that leverages firm performance. Moreover, the role of human capital in leveraging firm performance was found to be significant with the role of the joint effect of EO and MO as mediator. This implies that human capital is not solely a single determinant that leverages SMEs’ performance. Research limitations/implications There are few aspects of limitations in this research that could be enhanced by other scholars in the discipline of entrepreneurship. First, the strategic orientation concept being indicated by EO and MO had yet to provide a comprehensive view of strategic orientation. Second, this research used samples that represent the traditional furniture cluster in East Java and had yet to explore other clusters such as food processing and services cluster which may be relevant to the context of SMEs in Indonesia. Practical implications As a practical implication, this study would benefit policymakers in Indonesia, such as the Ministry for Cooperatives and SMEs to provide assistance to SMEs to progressively nurture capacity-building through formal and informal education to leverage human capital. Moreover, it could benefit other relevant businesses, such as national banks in Indonesia whose interests are significant, especially in providing financial access to SMEs in Indonesia. Social implications The social implication of this research lay the focus on the suggestion by which SMEs must be able to optimize their capabilities by enhancing levels of human capital particularly for traditionally managed SMEs. The ability to survive external pressures for would be able to contribute to the social well-being of their society as many people are dependent heavily in the operation of the SMEs. Originality/value The significance of this study is twofold. Although the use of human capital as a determinant of firm performance has been discussed in the literature, few studies to date has sought to predict human capital with EO and MO as mediators of firm performance. Furthermore, the joint impact of EO and MO as a strategic orientation needs to be holistically explored and explained, particularly in an emerging economy context.

POTRET KOMPETENSI INTELEKTUAL PELAKU UKM DALAM UPAYA PENINGKATAN KINERJA USAHA

Intellectual competency is an important element in the successful management of Small and Medium Enterprises (SMEs), whose applications are still not optimally empowered by SMEs in Indonesia. This case study aims to describe the forms of intellectual competence of UKM actors and their empowerment in achieving UKM performance in Nagauleng Village, Cenrana District, Bone Regency. This study involved 3 UKM actors who were selected using purposive sampling. Data collection techniques using interviews and documentation. The collected data is processed using a data triangulation approach with stages: data reduction, data presentation, and conclusion and verification. This study found forms of SME intellectual competence, including: creativity skills, innovation skills, skills in preparing business plans, and job evaluation skills. Furthermore, empowering intellectual competence can improve the performance of SMEs. Following up on these findings, it is very important to implement various intellectual competencies in the management of SMEs so as to provide opportunities to achieve maximum performance.

The Influence of Entrepreneurial and Market Orientation on Business Performance through Mediation of Innovation Capability: Implementation of SMEs in Indonesia

This study aims to determine the effect of entrepreneurial and market orientation on business performance and test the ability to mediate innovation between entrepreneurial orientation and market orientation on business performance in SMEs in Indonesia. Small and medium enterprises (SMEs) play a significant role in a country's economy. It makes SMEs very interesting to study. The form of research used in this study is a descriptive quantitative research method with a causal approach. The data collection method used a questionnaire with a sample of 219 respondents who owned SMEs through a purposive sampling technique—using Structural Equation Modeling (SEM) with AMOS 24 tools. The results of this study indicate that Entrepreneurial Orientation and Market Orientation have a positive and significant effect on Business Performance. The Ability to Innovate also has a positive and significant effect on Business Performance. It plays a significant mediating role in the Entrepreneurial Orientation and Market Orientation of SMEs in Indonesia.

Digital Bookkeeping Training Using Applications for Business Micro, Small and Medium Enterprises (SME) Tellu Silo Aldian Jaya

Tellu Silo Aldian Jaya to start its business in 2019 as a micro business engaged in processing local food sources into packaged food and beverage products. The first products produced were a drink made from red ginger, coffee and lemon grass named Jahe's Kopi and a drink made from milk and ginger named Jahe's Susu. The rapid development of Tello Silo Aldian Jaya SMEs is in line with the prospects for SMEs in Indonesia which continue to increase every year. This community partnership program is directed at helping good financial management so that it has a positive impact on the business continuity of the Tellu Silo MSME business. The benefits that are expected to be obtained by partners after participating in this service program are that the target community has an understanding regarding the urgency and basic concepts of bookkeeping and accounting. Digital bookkeeping by utilizing the La Mikro application is an output product of this program which is expected to be able to overcome the problem of the lack of competent human resources in the fields of finance and accounting at Tellu Silo Aldian Jaya.

E-Business Software Product Line Methodology Based on SMEs Characteristics

The growth of Small and Medium Enterprises (SMEs) will certainly have a positive influence on economic development in a country. However, many SMEs struggle to survive, grow, and show limited productivity. It was recorded that there were around 63.9% of SMEs in Indonesia whose turnover had decreased by more than 30% during the COVID-19 pandemic. Among the factors that cause the low survival rate of SMEs, a factor that is considered critical is the lack of success in the use of e-business. The use of e-business by SMEs is not a one-size-fits-all solution, because SMEs have various characteristics. In this study, an E-Business Software Product Line Methodology based on SMEs characteristics was proposed using Software Product Line Engineering (SPLE) approach. In general, the proposed methodology was sufficient to describe the aspects needed in building a software development methodology. Aspects that had not been described were those related to software project management. The proposed methodology is useful for building an e-business application platform that can be customized based on SMEs characteristics.

Creating digital ecosystem for small and medium enterprises: the role of dynamic capability, agile leadership and change readiness

Purpose The digitization efforts for small and medium enterprises (SMEs) as a result of advances in information technology are challenging, with one of them being the creation of digital ecosystems for SMEs. This study aims to develop a model of the relationship between SMEs’ readiness to change, agile leadership and dynamic capability to implement a digital ecosystem for SMEs in the creative industry in Semarang, Central Java, Indonesia. Design/methodology/approach A survey methodology was used in this study. Respondents in this study were creative industry SMEs in Semarang, Central Java, Indonesia. SMEs in the creative industry sector were chosen as samples as they require digital technology to manage their business development, production and distribution, customer relationships and to innovate in their businesses. In total, 250 creative SMEs, selected based on a purposive random sampling method, were included in this study. Data were analyzed using structural equation model-partial least square. Findings This study provides current insights and future needs for implementing digital ecosystems in SMEs in Indonesia’s creative industries. It also identifies three critical conditions for dealing with Industry 4.0: organizational readiness to change, agile leadership and dynamic capability. Originality/value In response to information technology advancements, this study proposes a new model for implementing digital ecosystems for SMEs. Furthermore, this study adds knowledge about the concept of a service-oriented technology ecosystem to help SMEs operate more efficiently. It focuses on the interaction of entities to improve the system’s utility, gain benefits and promote information exchange.

EFEKTIFITAS DAN PEMANFAATAN INSENTIF PAJAK PADA UMKM PADA MASA PANDEMI COVID-19

During pandemic Covid-19, the productivity of SME(small and medium enterprises) is getting decreasing and the government boosts the existence of SME by giving the incentive tax until December 2020 to tax payer. SMEs are hoped to utilize the incentive tax as it can assist SMEs in Indonesia. Therefore, the objectives of this research are to (1) investigate the understanding of SMEs about article 21 and the tax incentives, (2) explore how effective the socialization about tax incentives. The design of this research is a qualitative descriptive using online interview and questionnaires. Samples taken are 40 SMEs in West Sumatera using purposive sampling techniques. The results show that more than 50% of SMEs in this research has already understood about income tax article 21, and more than 40% of SMEs are also familiar with the tax incentive, however, related to socialization of tax incentive from authority party, SMEs hope to obtain more information either online or offline.

Connecting the Dots: Linking Entrepreneurial Leadership and Strategic Agility towards SME Competitiveness

This study attempted to investigate the competitiveness of small and medium enterprises (SMEs) through strategic agility in the context of a developing nation. As SMEs are currently operating in a volatile, uncertain, complex and ambiguous business landscape, enhancing strategic agility and the competitiveness of SMEs are highly pivotal. The study examined the integrative relationships between the individual, the firm and institutional factors in explaining SMEs competitiveness. This study specifically conjectured that entrepreneurial leadership and government support could influence SMEs’ strategic agility and competitiveness. Data collected from 190 SMEs in Indonesia were subjected to partial least square (PLS) analysis using Smart-PLS version 3.0. The findings showed that entrepreneurial leadership and government support significantly influenced the strategic agility of SMEs that subsequently enhanced their competitiveness. Thus, this study will be beneficial to policymakers, managers and owner of SMEs to focus on empowering SME leaders who have entrepreneurial traits and behaviours that can explicitly address the values of government support that are most needed for SMEs as well as transform challenge into business opportunity to win competition.

Identifying Driving Factors of Technological Innovation to Create Sustainable Value in Metal Manufacturing SMEs

One of the keys to the company’s success in achieving sustainability is the application of technological innovation. Technological innovation plays a crucial role in creating manufacturing values and excellence. It is necessary to understand what are the key drivers of implementing technological innovations that can support the achievement of competitive advantage and sustainability in manufacturing companies, including Small and Medium Enterprises (SMEs). With all the limited capacities and resources, technological innovation becomes challenging for SMEs, especially to deal with dynamics and uncertainties in the business environment. This study aims to determine the key drivers of the application of technological innovation in manufacturing SMEs to support the achievement of sustainable competitive advantage. The case study was conducted in metal manufacturing SMEs in Indonesia. This study uses Interpretive Structural Modeling (ISM) in determining the contextual relationship between the identified key drivers. Based on the results, it is known that among the eleven key drivers, three drivers belong to the dependent cluster, four belong to the linkage cluster, and the rests belong to the independent cluster. In addition, the results of this study show that factors related to management support and commitment, government regulations, collaborative support, as well as the application of artificial intelligence, are the main key drivers that need to be prioritized for the successful application of technological innovation towards sustainability. The findings of this study are intended to assist managers and practitioners, especially those engaged in metal manufacturing SMEs, to develop a strategic plan for creating sustainable manufacturing values, in the context of technological innovation.