SME Indonesia From The Eyes of Foreign Expat

SME Indonesia From The Eyes of Foreign Expat

ricardo santos - sme indonesia – Ricardo Santos view Indonesia as the fourth most populous country in the world, supported by good political and economic stability, Indonesia’s large domestic market offers a wide range of investment opportunities for foreign and domestic investors.

With a target economic growth of more than 6% for the coming years, there is a growing emphasis for the government of Indonesia on attracting more foreign investment in order for the overall investment to reach the projected levels of Indonesian Rupiah (IDR) 2,000 trillion, or approximately US$222 billion, by 2014.

Infrastructure has been one of the challenges for the Indonesian government in attracting foreign investment in Indonesia. Currently, Indonesia has around 391.000 km of roads, 6.500 km of railways, and 21.500 km of waterways. In addition, Indonesia developed an extensive air transport network that encompasses 652 airports to ensure that all Indonesia’s islands are accessible, by either sea or air.

For the last 10 years the government has been actively introducing measures directed at encouraging investing in Indonesia and improving the country’s regulatory and economic environment. Through the Public Private Partnership (PPP) scheme, the government offers investment opportunities for the infrastructure projects to develop the country’s roads, railways, power and utilities. Investments in mining and agriculture sections are also actively encouraged.

It is inconceivable to expect economic growth and development, without strong contribution from Indonesian SMEs. Foreign investment groups need skilled and agile SMEs to materialise implementation of their projects in Indonesian territory.

Small Medium Enterprises (SMEs) in Indonesia are growing fast. In the period of 2011-2012, SMEs in Indonesia grew as much as 2.41% from total of 55.206.444 units to a total of 56.534.592 units. By these numbers, SMEs in Indonesia give big contribution to create job employment. In 2011, for example, SMEs created jobs to about 97.24% (equal to 101.722.548 persons); and in 2012, SMEs had successfully created jobs to about 9.16% (equal to 107.657.509 persons).

SMEs’ contribution to the National GDP is also significant. In 2011, SMEs’ contribution to National GDP was about 57.94% (or equal to IDR 4.303.571,5 Trillion) and it increased to 59.08% (or equal to IDR 4.869.568,1 Trillion) in 2012. These contributions have made SMEs become one of the key sectors to enhance Indonesian economy.

Moreover, related to export performance, SMEs in Indonesia give significant contributions to national export performance. In 2010, SMEs’ contribution to national export performance is about IDR 175.894,9 Billion (or equal to 15.81%) and IDR 187.441,82 Billion (equal to 16.44%) in 2011.

The flagship export products for SMEs include: 30% of handicraft, 29% of fashion and accessories, 27% of furniture, 10% of food and beverage, and 4% of health and beauty products. The main policy challenge will be to speed up the development of technology based SMEs, preferably in the kind of technology that conforms to the current global discourse.

In that spirit, the main feature of the development policies for SMEs consists of:

  • Improvement of access to technology,
  • Improvement of access to finance,
  • Improvement of access to market,
  • Technology diffusion and commercialization scenarios through business incubation, and
  • Provision and creation of conductive environment to support new business ventures, etc.

Although the SME information of Indonesia is led by the government, government bodies are not equipped to cover vast regions and various types of SMEs scattered throughout the economy without support from other organizations interested in SME promotion. Of the many organizations helping promote SMEs are SME Indonesia.

SME Indonesia is developing an SME Incubator programme, assisting SMEs in enhancing their skills and competences, as part of their preparation for the strong development and growth envisaged for the country, in a wide range of sector.  SME Indonesia is also finalising a set of Digital Tools that will easily bridge SMEs and Entrepreneurs with a multitude of Investors, both private and institutional.

Recently appointed by SME Indonesia for the Incubator programme, Ricardo Santos is an international expert in Business Development and Project / Programme Management, who will work in close collaboration with Indonesian SMEs and Entrepreneurs, in a selection of sectors :

  • Energy
  • Telecommunications
  • Transport & Mobility
  • Oil & Gas

With over 20 years’ experience in General Management, Operations Management and Project/Programme Management and acquainted with multi-million dollar projects, Ricardo has worked together with Investment clusters such as FNABA ( Portuguese Association of Business Angels ) and Entrepreneurship development institutions as the University of Nottingham.

Considering the needs of Indonesian SMEs, Ricardo’s support to Indonesian Entrepreneurs has the following objectives :

  • Implement internal processes of Corporate Governance and Programme Management ;
  • Potentiate organic growth, to become a bigger player in the respective market sector ;
  • Develop skills and competences, mandatory to larger and more competitive projects ;
  • Adequate methodologies to requirements of foreign partners;
  • Improve Business Development strategies that will attract the necessary Investment

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