illustration of UMKM (source : Liputan 6 news)

Digital Economic Potential Reaches USD 133 Billion, Government Invites UMKM to Go Online

The potential for the digital economy in Indonesia is estimated to reach USD 133 billion by 2025. Therefore, the government continues to encourage micro, small and medium enterprises (MSMEs) to expand into digital or go digital businesses so that this development is also splattered.

"The digital economy will continue to grow rapidly. The government itself is targeting profits from the digital economy in 2025 to reach USD 133 billion," said Deputy for Macroeconomic and Financial Coordination Ministry of Economic Affairs Iskandar Simorangkir in a webinar initiated by WhatsApp, Tuesday (07/21/2020) .

However, continued Iskandar, currently the development of the digital economy in Indonesia is still very small when compared to the existing potential. This is indicated by the low number of MSMEs that utilize digital businesses.

Based on data from the Ministry of Cooperatives and SMEs, currently the number of MSMEs exploring digital markets has only reached 13 percent or around 8 million businesses. Meanwhile, the total number of MSMEs in the country reached 64.19 million. Where as many as 63.35 million of them are micro businesses.

Though this business sector is able to absorb up to 97 percent of the workforce in the country. In addition, MSMEs also contributed 61.07 percent to gross domestic product (GDP) and non-oil and gas exports by 14.37 percent.Therefore, it targets 10 million MSMEs to go online until the end of this year. Therefore, this business sector is still a cushion for national economic growth.

Especially after the Covid-19 pandemic, digital-based businesses are believed to have more advantages compared to conventional methods. These include a wider market reach, higher product sales, and lower promotional costs.

Source: https://bit.ly/3jsRYNZ