Development of Indonesian Micro, Small and Medium Enterprises and The Utilization of the Internet

In the current era of globalization, small businesses are required to be able to compete in the market. One way for them to be able to compete is to utilize information technology in the form of Internet media. This study aims to examine recent development of micro, small, and medium enterprises (MSMEs) and to explore the use of the Internet by micro and small enterprises (MSEs) in Indonesia. For this purpose, it analyzed secondary data and primary data collected from face-to-face interviews with randomly selected 482 owners of MSEs in various cities and types of business. The secondary data analysis shows that MSMEs in Indonesia are dominated by MSEs, i.e. accounted for almost 100 per cent of all firms, but only contributed between 58 to 61 per cent of gross domestic product (GDP). Only a small fraction of MSEs in the country utilize the Internet for their businesses, although it varies by province and type of business. From the primary data analysis, it reveals three interesting findings, namely: (i) manufacturing industry is the type of business with the most Internet usage; (ii) young respondents use the Internet more than older respondents; and (iii) higher educated respondents are more likely to use Internet in running their businesses than low educated respondents.

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