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Jakarta Post

SMEs account for less than 0.1% of R&D spending in Indonesia: OECD

  • News Desk

    The Jakarta Post

Jakarta   /   Wed, October 10, 2018   /   05:20 pm
SMEs account for less than 0.1% of R&D spending in Indonesia: OECD OECD secretary-general Angel GurrĂ­a (Reuters/File)

According to the Organization for Economic Co-operation and Development (OECD), less than 0.1 percent of research and development (R&D) spending is conducted by small and medium enterprises (SMEs) in Indonesia, far behind the OECD average of 2.3 percent.

That figure was presented in a press statement for an OECD report on SMEs and entrepreneurship in Indonesia, presented by OECD secretary-general Angel Gurría in Nusa Dua, Bali, on Wednesday.

“In Indonesia, small companies employing fewer than 20 people account for more than three-quarters of national employment, more than in any OECD country,” said Gurría. “This is why policies to boost SME development should remain a priority for the Indonesian government.”

Cooperatives and Small and Medium Enterprises Minister Anak Agung Gede Ngurah Puspayoga and National Development Planning Minister Bambang Brodjonegoro spoke at the same event.

The OECD suggested that the government increase spending on skills upgrading and innovation at SMEs to strengthen productivity growth.

The OECD also suggested scaling back some large programs, such as the people’s business credit (KUR) – a loan program with subsidized interest rates, while increasing the focus on targeted groups, such as first-time borrowers and SMEs from regions lagging behind in terms of development.

“To improve the overall coherence of Indonesia’s SME policy, the review recommends the integration and merger of programs that offer very similar services but are operated by different ministries, for example in the field of business development services and business incubators,” the statement says. (bbn)