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Development of small and medium enterprises in a developing country The Indonesian case

Development of small and medium enterprises in a developing country The Indonesian case Purpose – The Indonesian Government has taken many measures to support the development of small and medium enterprises (SMEs), which are expected to play a crucial role in employment creation, gross domestic product growth, and non‐oil and gas export development. The purpose of this paper is to examine recent developments of SMEs in Indonesia. More specifically, it aims to address the following research questions: How important are SMEs in Indonesia? What are their main constraints? What is the impact of women entrepreneurs on SME development? and Can Indonesian SMEs be sources of innovation? Design/methodology/approach – The paper analyzes data from Indonesia's National Agency of Statistics and reviews key literature and secondary data on Indonesian SMEs. Findings – First, SMEs have been the main player in domestic economic activities as they account for more than 99.9 percent of all firms and employ 96.2 percent of the workforce. Second, key SME constraints include lack of finance and marketing difficulties. Third, representation of women entrepreneurs is still relatively low and can be attributed to low level of education and cultural/religious constraints. Finally, SME innovation capability is low for several key reasons. Originality/value – The paper considers the involvement of women in SMEs in a Muslim‐majority country and contributes to the literature on the innovation capability of SMEs. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Enterprising Communities: People and Places in the Global Economy Emerald Publishing

Development of small and medium enterprises in a developing country The Indonesian case

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Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
1750-6204
DOI
10.1108/17506201111119626
Publisher site
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Abstract

Purpose – The Indonesian Government has taken many measures to support the development of small and medium enterprises (SMEs), which are expected to play a crucial role in employment creation, gross domestic product growth, and non‐oil and gas export development. The purpose of this paper is to examine recent developments of SMEs in Indonesia. More specifically, it aims to address the following research questions: How important are SMEs in Indonesia? What are their main constraints? What is the impact of women entrepreneurs on SME development? and Can Indonesian SMEs be sources of innovation? Design/methodology/approach – The paper analyzes data from Indonesia's National Agency of Statistics and reviews key literature and secondary data on Indonesian SMEs. Findings – First, SMEs have been the main player in domestic economic activities as they account for more than 99.9 percent of all firms and employ 96.2 percent of the workforce. Second, key SME constraints include lack of finance and marketing difficulties. Third, representation of women entrepreneurs is still relatively low and can be attributed to low level of education and cultural/religious constraints. Finally, SME innovation capability is low for several key reasons. Originality/value – The paper considers the involvement of women in SMEs in a Muslim‐majority country and contributes to the literature on the innovation capability of SMEs.

Journal

Journal of Enterprising Communities: People and Places in the Global Economy – Emerald Publishing

Published: Mar 29, 2011

Keywords: Indonesia; Small to medium‐sized enterprises; Women; Entrepreneurs; Developing countries

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