Approaching Indonesia's Chairmanship of ASEAN in the upcoming 2023, the Directorate of ASEAN Negotiation, DG International Trade Negotiations of the Ministry of Trade, with support from the ARISE+ Indonesia, initiated a study on Strengthening the Contribution of Micro, Small, and Medium-sized Enterprises (MSMEs) to ASEAN Economic Growth through Digital Transformation. The kick-off meeting took place on Monday (17/01) via a virtual meeting platform.
The study has a strategic importance considering that MSMEs are a major and vital driving force to the ASEAN's diverse and dynamic economy, constituting 95-99% of all business establishments and contributing more than half of the total employment in all ASEAN Member States (AMS). MSMEs also play a pivotal role in achieving long-run and sustainable economic growth and narrowing the development gap within economies, especially by providing inclusive job opportunities and bolstering young people and women empowerment.
While digitalisation offers opportunities to reach more customers across the globe at lower trade costs, it remains a challenge for most MSMEs. According to the 2021 report on ASEAN Digital Economy published by the U.S. technology giant Google, Singapore state investor Temasek, and Bain & Co., the ASEAN digital economy could grow to USD 1 trillion by 2030. It is, therefore, a crucial factor in driving the region’s growth.
"We would like to find out digital adoption among MSMEs in ASEAN, and what kind of support Governments can provide to improve MSME integration into the digital economy," the Director of ASEAN Negotiation, Ms Dina Kurniasari, commented during the meeting.
The study aims to provide strategic recommendations to Indonesia to table a proposal to ASEAN to strengthen and increase the capacity of MSMEs as the main driver of economic growth in ASEAN through increased uptake of digital technologies and driving digital innovation.
Indonesia will take over the Chairmanship of the Association of Southeast Asian Nations (ASEAN) for the fourth time in 2023, with the baton passed from Cambodia.
Strengthening the MSMEs' role is one of the pillars to achieve a "Resilient, Inclusive, People-Oriented & People-Centred ASEAN", one of the five characteristics of the Association of Southeast Asian Nations (ASEAN) Economic Community Blueprint (AEC) 2025. Supporting the technology adoption by micro, small and medium enterprises (MSMEs) is also one of the ASEAN Connectivity 2025 Master Plan objectives.
Daya Makara, a think tank organisation of the University of Indonesia, will conduct the study which will also involve researchers from other ASEAN countries, such as the Philippines, Thailand, Malaysia, and Singapore. Ibrahim Kholilul Rohman, PhD, will lead the research team, in coordination with by ARISE+ Indonesia senior expert, Mohammad Dian Revindo. The final report is scheduled to be delivered in the next four months.
