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.
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.
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.
For many entrepreneurs, the decision to turn into innovations depends on the ease to adopt technology, trained workforces, and multiple sources of finance. Yet, navigating the complex regulation is a major challenge for most lay business people. To expedite the economic recovery post-pandemic recession, the stakeholders in the ecosystem are urged to formulate the right policy to simplify such challenges.