Incentivize MSMEs to stay digital
Policies Involved
Challenge
The main challenge facing MSMEs is not how to go digital, but how to stay digital. The plethora of digital skills and onboarding programs created by the government, private sector and other stakeholders have been relatively successful at assisting a number of MSMEs to adopt digital technologies as part of their sales, marketing, and business processes. However, insufficient understanding of the importance of digital technologies, coupled with poor digital skills and the perceived costs associated with ongoing maintenance, present challenges for MSMEs to permanently utilize these technologies.
Current Policy
The Governor of DKI Jakarta Regulation No. 2 of 2020 on Integrated Entrepreneurship Development mandates the regional government to work closely with stakeholders to develop potential entrepreneurs and entrepreneurs in the region as part of the Jakpreneur program. Throughout the pandemic, Jakpreneur has collaborated with ecommerce companies, start-ups, and digital experts to get program participants onboarded in digital platforms and to adopt more sophisticated technologies in their work flow.
Action
MSMEs face daunting challenges in maintaining their digitization and require help in ensuring that they are putting the right technology, tools and processes in place. For this to happen, the government must look beyond meeting number goals and provide ongoing close coaching to ensure the sustainability of digital adoption. Policy action in this space should firstly map the MSMEs that are already digital, and secondly incentivize them to stay digital by offering fiscal or tax incentives; financing the costs of coaching to improve their digital skills; as well as financing the costs of software beyond what is freely available. Furthermore, formalizing the collaboration between the government and the private sector in helping MSMEs stay digital cements the commitment to support MSMEs in pursuing a digital future.
