ENTREPRENEURSHIP ON DIGITAL ERA: INDONESIAN · PDF fileInternational Conference of Social Studies Education Proceeding Social Studies and Entrepreneurship in Digital Era ISSN 9772541575002

International Conference of Social Studies Education Proceeding

Social Studies and Entrepreneurship in Digital Era

ISSN 9772541575002

ENTREPRENEURSHIP ON DIGITAL ERA: INDONESIAN ECONOMIC

GROWTH ACCELERATOR FACING ASEAN ECONOMIC COMMUNITY

(AEC)

Jaka Nugraha1

1Fakultas Ekonomi Universitas Negeri Surabaya

email: [email protected]

Abstrak

Penelitian ini bertujuan untuk mengidentifikasi peran kewirausahaan melalui Usaha Mikro Kecil

dan Menengah (UMKM) sebagai salah satu sektor yang berpengaruh terhadap pertumbuhan

ekonomi Indonesia. Selain itu bagaimana peran kewirausahaan pada era digital seperti saat ini

mampu meningkatkan daya saing dalam Masyarakat Ekonomi Asean (MEA). Metode penelitian

menggunakan metode deskriptif kualitatif, dengan pendekatan rasionalistik. Pengumpulan data

dilakukan antara lain melalui studi literatur pada buku teks, artikel ilmiah dan media massa baik

offline maupun online. Berdasarkan hasil penelitian menunjukkan bahwa peran kewirausahaan

pada sektor UMKM mempunyai pengaruh yang cukup besar dalam peningkatan pertumbuhan

ekonomi Indonesia. MEA dipandang sebagai peluang sekaligus tantangan untuk UMKM

sebagai tolak ukur kemampuan usaha meningkatkan kualitas usaha dan sumber daya manusia.

Kata kunci: Kewirausahaan, UMKM, pertumbuhan ekonomi

Abstract

This research aims to identify the role of entrepreneurship through Micro, Small and Medium

Enterprises (SME’s) as key sector that affecting on Indonesian Economic Growth. Moreover,

this research also describing entrepreneurship on digital era will improve competitiveness of

Indonesian SME’s. Research methodology is qualitative with rationalistic approach. The data

collections are using library research, literature review, online and offline mass media. Research

result showed entrepreneurship role’s through SME’s sector has an impact on increasing

Indonesian economic growth. Asean Economic Community was became threat and opportunity

to SME’s in order to improve the competitiveness, quality, and human resources.

Keywords: Entreperenurship, SME’s, economic growth



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1. Introduction

The number of entrepreneurs is overview from an economic growth.

Generally, larger number of entrepreneurs in a country will impact on countries

economic foundation. In addition, entrepreneurs gave positive correlation of

employment and welfare level. Indonesian entrepreneur is 1.65 percent of total

population. South East Asian (SEA) countries have various levels as Singapore has

reached 7.2 percent, Malaysia 5 percent and Thailand 4.1 percent from population.

Meanwhile, United States has a percentage of 11.5 percent. The number of

entrepreneurs in Indonesia should be improved every year. Here is a graph comparing

the number of entrepreneurs Indonesia and other countries.

Graph 1. Indoensian entrepereur level comparing SEA countries

Entrepreneurship is understood to use innovative ideas to generate profit in the

market through organizing sequence of actions oriented (Jelonek, 2015). Entrepreneur is

who has ability and do combination resource to evaluate and identify opportunities on

business activity in order to reach benefit and ensure success (Henry, Hill, & Leitch,

2005). One of economic factor is entrepreneur, particularly on open economies.

Improvement in communication and information technologies brings structural changes

that require redistribution of resources (Yolaç, 2015). National productivity

improvement and creating jobs had become entrepreneurship behavior (Urbano &

Aparicio, 2015).

SME’s currently represent more than 90 percent of Indonesia's business and

accounted for 57 percent of the Indonesian Gross Domestic Product (GDP) (Eravia &

Handayani, 2015). Micro, small and medium enterprises (SME’s) are important on

Indonesian economic. Overall, more than 99.99 percent of business units in Indonesia

are SME’s or around 56,57 million units. SME’s sector employs nearly a 97.24 percent

of the entire workforce (Kemenkop UKM, 2012). SME’s sector has exported of 16

percent of total non-oil exports, and accounted for 57.94 percent of GDP of Indonesia at

current prices (Iqbal, 2015). Based on that data proved an Indonesian economic growth

highly supprting by SME sector.



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Implementation of information technology on SMEs has been quite good with

the use of a variety of facilities in accordance with the characteristics of its business.

However, there are still weaknesses in the implementation, for instance limitation of

using office application and administration (Yan Rianto dalam Setiawan, 2011). This

article raises the issue of research such as how entrepreneurship on digital era become

economic growth accelerator of Indonesia facing Asean Economic Community (AEC).

The aims of this article to identify an entrepreneurship role in digital era to increase

economic growth when AEC declared. Descriptive qualitative method with rationalistic

approach was used to analyze the secondary data. The data collections are using library

research, literature review, online and offline mass media.

2. Literature Review

2.1. Entrepreneurship and Small Medium Enterprises (SMEs)

Entrepreneurship can occur in various start-up business, small, medium firms,

large firms, non profit organizations, and public organization. Entrepreneurship are

starting, founding, and creating new business; new products,, new markets and

innovation; pursuit of opportunity; risk management, risk taking, and uncertainty;

personal benefit and profit seeking (Morris et al., in Shah, Gao, & Mittal, 2015).

SMEs are independent firms with subsidiaries and has only small employees

number (OECD, 2015). SMEs is 'driving forces' of modern economy for their

contribution in improving innovation and technology, increase employment

opportunities and encourage export promotion (Zulkepli, Hasnan, & Mohtar, 2015). The

SMEs’ characteristics have direct relationships with firms’ levels of risk, resource

commitment and control, which affect their decision (Laufs & Schwens, 2014). The

development of technology, transportation, production, and enhancing communication

SMEs to improve their products, services and gain competitive advantage to deliver

value in global marketplace. For many SMEs in developing countries, e-commerce is

able to support SMEs’ businesses opportunities for a global value chains

(Ueasangkomsate, 2015).

3. Result and Discussion

Indonesian SME’s has contribution on economic growth and gives important

position. In addition, these sectors also supply high number of employment. SMEs

contribution on GDP of Indonesia can be described by the following graph.



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Graph 2. SME’s contribution on GDP

(in billion) Source: Ministry of Koperasiand SME’s, 2014

Graph 3. SME’s contribution on GDP

(in billion)

The contribution of SMEs has increase in the period 2011 to 2012. Through

the data from National GDP according to current prices in 2011 amounted to IDR

4.321,8 trillion or 58,05 percent, whereas in 2012 of IDR 4.869,5 trillion or 59,08

percent (Bank Indonesia, 2015). Based on BPS data explained that the number of SMEs

in Indonesia as many as 57,89 million units. SMEs contribute to the employment of

96,99 percent. In addition, SMEs also contribute to GDP amounted 60.34 percent. As

the bureaucracy reform on the first semester of 2016 SMEs contribution to GDP by 60,7

percent. Labor absorption in this sector also increased from 96,99 percent to 97,22

percent (Industry Ministry of Indonesia, 2016).

Although indicators of contribution to GDP and employment increased, the

SME sector access to global supply chain production was minimal. Indonesia SMEs

contribute to the global supply chain production is slightly higher than with Brunei,

Laos, Myanmar, and Cambodia. SME sector also contributes to Indonesia's exports,

which amounted to 15.8 percent in 2015, lower than other Asean countries. Thailand

SME sector's has contribution to exports and Philippines has contribute 29.5 percent to

20 percent. At the global level, the German SME sector contribute to exports reached

55.9 percent and Japan at 53.8 percent (Ministry of Industry, 2016)



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Picture 1. Indoensian competitiveness

pillar

Source:(Schwab, Sala-i-Martin, & Brende,

2015)

Picture 2. Competitiveness level of Asian

countries

The World Economic Forum has released the level of countries

competitiveness in the world. on 2016. Indonesia was ranked 41, down from the

previous position which is ranked 37. Some of the pillars that has a higher index of Asia

Pacific region of the country, among others: the Indonesian market, business

sophistication, macroeconomic environment, technology and innovation. Indonesia is

one country with highest number of internet users in Asia. Indonesia population are

using internet as much as 88.1 million of 259 million population of Indonesia. Larger

than Internet users in other Asean countries such as Thailand and Vietnam

Graph 4. Asia Top Internet Countries



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Based on eMarketer research show that e-commerce market share on 2016

should reach USD 2,052.7 billion, almost double that of the total market share in 2012.

Asia-Pacific region was contributed the highest of any other region with a total USD

855.7 billion, increase more than 185 percent. The extent of e-commerce market proves

that Indonesian business opportunity has bright future.

Table 1. Business to consumer e-commerce sales worldwide by region (billion USD)

Indonesia overtook Singapore and Thailand in 2014 to emerge as the Reviews

largest e-commerce market in ASEAN with online sales of US $ 1.1 billion.

Euromonitor forecasts online revenue to grow by a CAGR of 38% between 2014 and

2017. Slightly behind Indonesia, Thailand’s online sales amounted to US$1.1 billion in

2014, representing 1.2% of the total sales. And forecasts online revenue CAGR of 19%

between 2014 and 2017.(Wu & Hui, 2015).

Graph 4. Asean internet retailing as a percentage of total retail

sales in 2014 (source: W & Hui, 2015)

Based on the data shows that Indonesian SME’s has a opportunity to to

expand on Asean level. SME’s contribution on GDP can be a reference for the

government's policy focus in the development of SMEs so that the products and markets

that could reach up to the Asean region. Rising trend of internet users in the countries of

the ASEAN region into positive signal regarding trade among countries can be done

easily. However, this condition can be a threat to Indonesia SME’s if they can’t compete



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with SME’s from other countries. Based on previous data, Indonesia competitiveness

index is still below other ASEAN countries such as Malaysia and Thailand. Some of the

indicators are inefficient government bureaucracy, limited infrastructure and lack of

access to funding. So the need for synergy of the various parties to improve role of

SMEs as a driver of economic growth in Indonesia. Some things should be done in the

SME’s management are follows:

a. Government regulation that support the development of SMEs in e-commerce

activities.

b. Human resources include hard skills development, soft skills of employees and

owners of SMEs.

c. The ease of access to financing through low interest rates.

d. Training development towards innovation and creativity, business networks and

partnerships.

e. Improving infrastructure to support the distribution and production

f. Internet development and information technology services for SMEs through the

facilitation by the Ministry of Communication and Information.

g. Monitoring and development on business scale through assistance for the

Ministry of Koperasi and SMEs which are conducted regularly.

4. Conclusión

SME’s sector has been very instrumental to the growth of the Indonesian

economy. This is evidenced through the large contribution to the GDP in this sector. A

large number of SMEs are also a positive impact on reduction of unemployment rate in

Indonesia. Applicability of AEC and development of information technology into an

opportunity and a challenge for SMEs Indonesia. Ease of entry into the ASEAN market

could be done by developing SMEs through the synergy from various parties. Thus,

contribution and role of SMEs in the Indonesian economy will be increase.

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ENTREPRENEURSHIP ON DIGITAL ERA: INDONESIAN · PDF fileInternational Conference of Social Studies Education Proceeding Social Studies and Entrepreneurship in Digital Era ISSN 9772541575002