However, with government-imposed lockdowns, supply chain disruptions and a slowing of consumer demand during the COVID-19 pandemic, this sector has been experiencing a degree of pain they have never felt before.

According to a 2020 study conducted by Katadata Insight Center (KIC), 62,9 percent of MSMEs saw a decline in sales by more than 30 percent. Similarly, a Bank Indonesia (BI) survey revealed that 87,5 percent of Indonesian MSMEs were affected by the pandemic. Of this number, around 93,2 percent were negatively impacted on the sales side.

Though the vaccination program has made some headway and the government has started to ease mobility restrictions across the country, the reality for MSMEs remains worrying. The COVID-19 outbreak is forcing Indonesian MSMEs to rethink their business strategies because conventional "in-person" and "physical interaction" settings are no longer the norm.

As we look beyond COVID-19, the world will continue the transformation toward a digital economy. Cutting-edge technologies, including the Internet of Things (IoT), cloud computing, robotics, artificial intelligence (AI) and data science, have changed the world's economic landscape. In fact, the current pandemic has accelerated the urgency to digitize, as consumers are increasingly required to engage through digital platforms.

Digitalization has proven to be a crucial advantage for MSMEs, both before and during the COVID-19 crisis. According to the 2019 Singapore Economic Survey, MSMEs that utilized digital tools boosted their value and productivity by 25 percent and 16 percent, respectively. Digitalization could also help avert a complete economic halt for MSMEs during the crisis.

According to the Organization for Economic Cooperation and Development, the numerous MSMEs that successfully adapted to the digital platform have overcome the hardships of the pandemic, while those who failed to adapt have been left behind.

The COVID-19 outbreak has increased Indonesians' reliance on the internet and their time spent in cyberspace. According to Statistica, mobile phone penetration in Indonesia reached 72.07 percent in 2021 and is projected to rise to 82.45 percent by 2026. Indonesian people spend an average of eight hours and 52 minutes on the internet each day, placing the country fourth globally, behind Thailand, the Philippines and Brazil.

Social media use is also growing, with YouTube having the highest domestic penetration rate at 93.8 percent, followed by WhatsApp and Instagram at 87.7 percent and 86.6 percent, respectively. If MSMEs want to thrive in this changing landscape, they have to regard those figures as an opportunity to include an innovative "contactless" strategy into a more significant part of their business process

Accelerating the digitization of MSMEs has been considered a critical step in strengthening businesses' resilience as part of Indonesia's post-pandemic recovery efforts. Of the 60 million MSMEs throughout the nation in 2021, 12 million have been using online business platforms.

While this figure reflects only 19 percent of the total number, the trend is clearly increasing and is expected to do so for years to come. Nonetheless, the acceleration of MSME digitalization is strongly influenced by infrastructure availability, which leads us to discuss digital divides across different regions.

Indonesia, a country of over 17,000 islands, has experienced unequal growth of its digital infrastructure due to the constraints imposed by its unique geography. The majority of progress has occurred in urban clusters on the Indonesian islands of Java and Bali, with few resources available to rural areas.

Although Indonesia has begun tackling this issue of digital inequality through the National E-Commerce Roadmap and the 2020 Go Digital Vision, there is considerable work to be done to make sure that all Indonesians have affordable, stable and accessible internet access. As such, all sectors must bear the responsibility of assisting MSMEs in embarking and continuing their digital transformation journeys.

Other constraints faced by Indonesian MSMEs are time and money. In comparison to large enterprises, MSMEs have fewer resources and suffer structural challenges when it comes to adopting new technology. While there is a proliferation of products and solutions aimed toward MSMEs, they lack the resources to examine all available options and manage various providers. This is particularly true for female entrepreneurs who have to balance their household responsibilities with their business activities.

Similarly, while the government reacted rapidly to support MSMEs, which ranged from deferment of taxes and credit guarantees to direct loans and grants, numerous MSMEs complained that applying for support was difficult and time-consuming. Therefore, it is critical to plan interventions with MSMEs in mind while also taking into account the resource constraints of time and money. All actors involved in aiding MSMEs' digitalization must ensure their support and training are straightforward and easy to access.

Lack of collaboration is another challenge Indonesian MSMEs are facing. Although the importance for MSMEs to digitize was already on the agenda, sectors involved in helping MSMEs function in silos. This creates a vicious cycle of duplication, inefficiencies, confusion and even cannibalization. The magnitude of the challenges ahead of us is unprecedented in modern history; that is why conventional working methods will not suffice.

It is the time for big tech-savvy companies such as Google, Tokopedia, Gojek and Bukalapak, multilateral and bilateral organizations, civil society and governments to share and learn from one another; to handle the challenges in a more comprehensive and nuanced approach and to establish a partnership, collaboration and collective success as the new normal.

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The writer works for the Treasury Directorate General, the Ministry of Finance. These views are personal.