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Jakarta Post

Govt bootcamp to prep 30 startups to give SMEs a digital leg up

  • Dzulfiqar Fathur Rahman

    The Jakarta Post

Jakarta   /   Tue, September 22, 2020   /   09:19 am
Govt bootcamp to prep 30 startups to give SMEs a digital leg up Young people using various gadgets (Shutterstock/File)

The government will hold a three-week bootcamp for 30 selected startups that can provide services like supply chain and finance management for small and medium enterprises (SME) as it aims to increase digitalization among the small businesses.

The course, called Pahlawan Digital (Digital Heroes), will begin on Wednesday. The Cooperatives and SME Ministry also partners with influencer-cum-businesswoman Putri Tanjung, e-commerce company Shopee Indonesia and ride-hailing firm Grab Indonesia to select the 10 best startups out of the 30 participants as strategic partners for the ministry.

“They [the startups] will provide not only market access [for SMEs] but also support efficient business processes and supply chains, access to financing and entrepreneurship development,” Cooperatives and SME Minister Teten Masduki said in a virtual press conference on Monday.

Six startups, including promotional small businesses database Klik Direktori, smart chat assistant provider Chatbiz.id and digital debt manager CrediBook, were selected for the supply chain management services category, as they could provide such services to around 72,000 small businesses across the country, according to the ministry.

Teten said the program would help the government meet its target of having 10 million small businesses adopt digital technology this year, in part to adapt to mobility restrictions necessitated by the COVID-19 pandemic.

Indonesia’s economy relies heavily on small businesses, which account for more than 60 percent of the gross domestic product (GDP) and employ a majority of the labor force. Small businesses have been hit hard by the COVID-19 outbreak, as the economy shrank by 5.32 percent year-on-year (yoy) in the second quarter of this year.

A Mandiri Institute study shows that digitalized micro, small and medium enterprises (MSMEs) can help Indonesia significantly reduce the GDP impact of the pandemic.

The study found that MSMEs that have an online presence are more resilient, as they are more likely to continue producing and selling goods and to have a longer runway to survive the health crisis.

So far, the number of small businesses on digital platforms has reached around 9 million, or 14 percent of all small businesses, according to the minister, quoting data from the Communications and Information Ministry.

That figure includes 1 million new enterprises to go digital during the pandemic.

“Some digital platforms [companies] told me they had never seen such a rapid growth in only a few months. This is because the situation forces people to sell online,” said Teten.

Putri Tanjung, who initiated the program, said the participating startups had brought about solutions to the issues faced by local small businesses in their respective regions.

According to the ministry, 23 startups participating in the program are from outside Jakarta.

Neneng Goenadi, the managing director of Grab Indonesia, said a survey by her company found that 76 percent of SME respondents still needed more support to increase their online visibility, and around half of them needed technology to develop their businesses.

Both Grab Indonesia and Shopee Indonesia will provide guides on a wide range of topics, including technology, marketing strategy and product design, to the participating startups.

“We at Shopee, which has been dealing with SMEs for years, hope we can share [our experience], so that those startups can avoid the pitfalls we faced,” said Handhika Jahja, the director of Shopee Indonesia.

The government has allocated Rp 123.46 trillion (US$8.36 billion) for small businesses as part of its COVID-19 relief package. As of Sept. 17, the government had spent 41.34 percent of that allocation, according to Coordinating Economic Minister Airlangga Hartarto.