S&T Trends

Micro Small and Medium Enterprise (MSMEs) Ecosystem and Government Measures to Promote MSME Innovation in Indonesia

Rofikoh Rokhim, Melia Retno Astrini

Abstract

Micro small and medium enterprises (MSMEs) have been known as a catalysator of social and economic growth due to its ability to increase employment rate and increase local economy. For these MSMEs, innovation activity is crucial, especially in this era of globally competitive environment where product life cycle is getting shorter. This paper aims to extend the discussion about the topic of MSMEs and innovation by providing empirical evidence from previous research the drivers and/or the barriers to innovate for MSMEs. Then, we describe the state of MSMEs innovation in Indonesia, specifically regarding the policies that have been implemented by Indonesian government to promote growth and innovation among MSMEs. Lastly, we investigate whether the policies are able to close the barrier gap of innovation among MSMEs in Indonesia, and provide recommendations of future actions that shall be carried out to support innovative MSMEs.?