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SME vs IDE: Which one is culturally fitter?
Many solely emphasize small and medium enterprises as the solution to economic problems without truly understanding what SMEs are.
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Solid career: Muchlis (left), owner of a small-scale metalsmith enterprise, displays his products to his business mentors from Dharma Bhakti Astra Foundation (YDBA) on July 27, 2023 at his workshop in Banyumas, Central Java. (Courtesy of/ YDBA)
Not long ago, I visited a friend who is the CEO and owner of one of the top 10 insurance companies. Inside his office, numerous business books commonly found at international airports decorate the shelves.
In conversation with him, whose family's business was the first to be listed on the country's stock exchange, I delved into the topic of technological disruption heavily discussed in the media. His industry has experienced significant disruption.
My friend expressed frustration at how we tend to jump on trends, be it "4.0", "disruption" or "platform-based apps", making everything revolve around these buzzwords. Additionally, there is an excessive use of the terms "innovation" and "digital" despite the numerous future technology-based businesses not being strictly digital. The theme of "nurturing entrepreneurship" suddenly gained popularity, with everyone now talking about "entrepreneurship".
The issue we addressed that afternoon focused on the misinterpretation of the platform matchmaking business as a digital business, disregarding the fact that most products produced and sold are tangible, not digital.
My friend presented a clear distinction between "brick and mortar businesses" and the trendy "platform matchmaking business". This reminded me that brick-and-mortar businesses are the backbone of the platform business.
He understood the complementary dichotomy between small and medium enterprises (SMEs) and innovation-driven enterprises (IDEs). He acknowledged the importance of brick-and-mortar businesses and home-based or medium and large-scale industries. However, certain groups solely emphasize SMEs as the solution to economic problems without truly understanding what SMEs are. Clearly, they lack a deep understanding of entrepreneurship since they never seriously studied it nor engaged in entrepreneurship themselves.
