Digitalization Of MSMEs Outside Java Is Still Low, Smesco Boss Reveals The Cause

JAKARTA - The Marketing Service Agency for Cooperatives and Small and Medium Enterprises (LLP-KUKM) or Smesco Indonesia admits that the digitization of MSMEs outside Java is still very low.

Director of Smesco Indonesia Leonard Theosabrata said that in fact internet infrastructure is not the only problem. He considered that demographic distribution factors and logistics costs were a challenge for MSMEs outside Java to go digital.

Leonard even gave an example that MSMEs in eastern Indonesia have difficulty selling their products in their own area digitally because of the lack of demand.

"Because the people are not in eastern Indonesia, so the density of the population will not allow them to have a market share (market)," Leonard said at a press conference at the Kemenkop UKM office, Jakarta, quoted Friday, January 26.

The man who is often called Leo said, to pursue the market, MSME products outside Java must market them to densely populated areas. Instead of being the dominant area in Java.

However, Leo regretted that MSMEs outside Java when they wanted to send their products outside the region, the high logistics costs are now a challenge. This condition makes MSME products in eastern Indonesia difficult to compete in the marketplace.

Moreover, some of the MSME production needs were also imported from Java Island. This also causes the cost of producing MSME products outside Java to be higher.

"If (MSMEs) have to send goods from there, they are not competitive. This is a reality, this is a fact. So, when I first joined Smesco, I made a zoom with all the heads of offices (kadis) throughout Indonesia. Then the head of the Maluku said, 'good program, but I didn't join, yes. It's impossible, our MSMEs won't be able to compete," he said.

Therefore, said Leo, his party continues to strive to promote MSME products in eastern Indonesia through the East Semsco hub. In addition, providing a digital promotion platform collectively is needed to help marketing MSME products outside Java.

"I have been concerned about Eastern Indonesia for a long time, that's why I want to make a Smesco hub east. Eastern Indonesia must participate in Indonesia's development towards 2045," he added.