In Nusa Dua area of Bali Island, the GoI carried out a business matching event for three days (22-24 March 2022) between Ministries, Govt Institutions, and Local Government on one side, and national industries and SME on the other side. This event also exhibited some national industry associations (organised by Ministry of Industry) and SME (organised by Ministry of Coop & SME).
I will write about the business matching some other time. But the exhibition itself is interesting. Here we displayed nationwide technology-focused entrepreneurs, scoping from weaponry simulation, health facility instruments, tools for agroindustry, and many others.
The Minister of Coop & SME, Mr Teten Masduki, personally visited and talked to the local entrepreneurs. He emphasise the importance of the local industry to improve the quality and production capacity to match the market demand. Also, for the platforms like PADI UMKM, he addressed that such system should be used as a gateway for SMEs to be listed at national industry catalogue to be linked to the market where Ministries etc are targeted to spend 500 trillion rupiah this year.
When I was in Kupang (May 25th), I was invited by the Coordinative Ministry of Economy (Kemko-Ekon) and Ministry of ICT to discuss the implementation of IMT-GT e-Commerce plan. I presented some options we might choose using PADI UMKM as a national hub connected to the IMT-GT Mall. But then the Government addressed us to propose PADI UMKM as the core platform of the IMT-GT e-Commerce program instead.
On the next IMT-GT JBC (Joint Business Council) Meeting (May 28th), we stated the proposal to take over the development and operation of IMT-GT core platform with some alternative business models. At that time, Thailand expressed their dissatisfaction on the business operation plan of the IMT-GT Mall from Malaysia. Also the CIMT (Centre of the IMT-GT Cooperation) mentioned that PADI UMKM has been in operation since last year, while IMT-GT Mall from Malaysia is still in development plan stage.
Today (June 4th) we continue the JBC Meeting with CIMT. Malaysia has stated their desire to maintain their role as IMT-GT e-Commerce hub as decided in 2019; and representing Indonesia, I have agreed to let them continue leading this program with this determined timeline. PADI UMKM will continue to support as the connection between Indonesia MSMEs and the IMT-GT Mall. I also proposed that the operation of each national hub will be independent, so each country may have different business models in designing the operation business of the e-Commerce program. For example, JBC Malaysia prefers that the operation will be carried out by private sector; while Indonesia prefers to use MSME ecosystem program. This result will be reported on the next Convergence Meeting, scheduled on July.
Virtual Meeting on IMT-GT Strategic Planning Meeting (SPM) / Sub-Working Group on ICT was held today. The Standing Chairman of IMT-GT SWG on ICT is from Mme. Suhaila Yeop Johari (Communications Technology Division, Ministry of Communications and Multimedia Malaysia). I attended the meeting representing Telkom Indonesia as the platform owner of PADI UMKM — the platform chosen by the Indonesian Government for MSME exporting facility. The meeting was also attended by Mr. Iswarayuda Bayu Agutama (Head of Bilateral Division,Centre of International Affairs, MCI, Indonesia), Ms. Ishariyaporn Smiprem (Director of Regional Cooperation Group International Affairs Division, Ministry of Digital Economy and Society, Thailand), and Mr. Firdaus Dahlan (Director of CIMT).
At this special BBI coordinative meeting, the Coordinative Minister of Maritime & Invesment reminded us that the program expansion to leverage the MSME & national product should be accelerated in 2021; and the programs would include the quality improvement for the MSME & their products. Some MSMEs must be leveraged to the class of artisans, whose products will have better quality than the industry comparisons.
Telkom, with its definitive role as the architect of the platform-based digital ecosystem for MSME business will expand the digital market for the MSME, including generating and promoting a wider market demand for the MSME products & services. Some horizontal and vertical integrations have been planned to ensure the MSME economy will be part of national development strategy; and some new services could be established, including financing, certification, quality improvement, export facilities, etc.
BBI (Bangga Buatan Indonesia) is a coordinative & collaborative programs to improve the economy and commercialisation of national products with special emphasis on MSME products, led by the Government of Indonesia — in this case the Coordinative Minister of Maritime and Investment (Menkomarves). Telkom is actively involved in this program via its MSME Digital Ecosystem programs, incl PADI UMKM and Rumah BUMN.
This year, some footholds have been established, including the BBI program itself, PADI UMKM & Bela Pengadaan, and some programs related to MSME in Creative Economy and Maritime & Fishery. For Telkom, the main role is to build, establish, and expand the platform-based digital ecosystem for MSME business, including their development and economic improvement.
The next thing to do is to build a context for integration among those separated systems and applications, to establish a real ecosystem supported with integrated information and platform, where all programs and activities could provide mutual support in leveraging different segments of MSMEs, including small and medium business in agriculture, fishery, forestry, creative industry, etc.
Since 2016 I have a new role in Telkom Indonesia as the AVP (now Project Leader) of the Industry Synergy. The role of Synergy Department is simply developing the capabilities (mainly digital capabilities) and expanding opportunities of Telkom Group by maximising the collaboration with the industry. As a government policy at that time, the collaborations are prioritised with the state-owned companies (BUMN) in Indonesia. More than three years have passed then. We have changed the Ministry of BUMN, Telkom’s CEO, Telkom’s BOD in charge of Synergy programs, SVP and VP of Synergy, etc. But we are still developing our paradigm of digital synergy, i.e. developing digitally supported economic ecosystems in different sectors.
Using a metaphor from the environment, an innovation ecosystems consists of interdependent parties with different or often competing objectives and concerns, living and growing together in a common digital space, unified using one platform or more to enable them to live better and grow faster. Co-creation, collaboration, and competition are some key activities of the innovation ecosystems.
Last year, the new Minister of BUMN has addressed Telkom Indonesia to develop five ecosystems: Tourism, Agriculture, Logistics, Education, and Healthcare. We even hired a prominent global consultant to help us design the ecosystem. But this February, I requested an approval from the uplinks to add another ecosystem: the MSME ecosystem, to support non-digital micro, small, and medium business in digital way.
Previously we have had a program called RKB to develop the capability of SMEs in Indonesia. RKBs (BUMN’s creative house) have been established in 245 of 514 cities and regencies in Indonesia. In RKB, BUMNs provide training, consulting, and other facilities to leverage the capabilities of the SMEs in three product categories: culinary, craft, and fashion. But RKBs have failed to attract the SMEs since they do not really improve the sales of the SME products. An MSME ecosystem, on the contrary, should start with MSME commercialisation in mind.
We started with a small design by utilising a multichannel marketing application called SAKOO as our first platform. In March, many cities and locations in Indonesia (and other part of the world) are locked down (until the time I’m writing this post, btw) due to COVID-19 pandemic. We found some contexts for the usecase of the platform. To generate market, we will use BUMNs (and public, using campaigns supported by BUMNs) to create demands for the MSME market. BUMNs may buy the products of the MSMEs for their need, or as an aid to support the communities or health facilities in. Surely we first tried it with Telkom. Telkom has started purchasing MSMEs products using this platform, and has also sent support to communities in Depok.
The Minister of BUMN has a new expert staff: Ms Loto S Ginting — a smart lady working previously as a Director in the Ministry of Finance, managing sovereign bond. Now she advises the Minister of BUMN in the issues of Finance and MSME development. Our BUMN Law (UU 19/2003) mentions indeed that the strategic roles of the BUMNs include providing services for public, counterweight for private business, and support to develop small business and co-operatives. We approached her to discuss this first stage of MSME Ecosystem development program. She enthusiastically accepted the program. In addition, she improve the plan to add B2B transaction facility to the first stage of the program. The transaction data from B2B and B2C are further combined with data taken from e-Procurement systems of the BUMNs to make a dashboard to ensure the increase absorption of MSMEs products and services by the BUMNs. She calls this program PADI UMKM, stands for Pasar Digital UMKM / MSME Digital Market.
Meanwhile, the Covid-19 pandemic has brought the nation into an economic crisis. To survive, MSMEs and their employees need the public involvement. The Minister addressed to rush the MSME platform development. We work with our startup partners: Anchanto, Tees, Payfast, etc to enrich PADI UMKM platform with wider multichannel, logistics management, B2B capability, financing facility, etc. We need to finish it next month (June), so we can start the transaction on July. Eight BUMNs have been selected for pilot project. A new PMO has been assigned to finish this project.
It still felt like a miracle that everything was only in ideation last February, and all activities are carried out during lockdown periods, with all meetings held using vicon, and coordination using whatsapp. Let’s hope we can finish it on June, to support more prosperous small business in Indonesia in long term, or at least, for now, just to have them survive these crises.