Barrier Factors and Potential Solutions for Indonesian SMEs

Abstract

Facts that Indonesian SMEs have a great potency related with the ability to survive in crisis times do not lead to products capability. Moreover, several factors became reasons why the image of Indonesian SMEs does not emerge significantly; even though the product could meet market's interests. This study seeks to identify the potency of SMEs and reasons for inability in competing in global market and the outcome will be obtained in measurement form consisting several barrier factors faced by SMEs. The methodology adopted in this research is critical literature reviews, quantitative and qualitative data collection through questionnaires to 200 respondents and in-depth interviews with each of them. The research showed there are ten major barriers faced by SMEs: competition barriers; financial access; price of energy; technology; inefficient production cost; economic factors; management skill; process; limitation of sales; and raw material. Most SMEs agreed that government should dedicate more efforts in certain actions to eliminate SMEs barriers, like security standards improvement, development programmes, good financing policy, rational energy policy, continuous performance evaluation, commitment of corruption termination, and many supporting program needed by SMEs. Hereinafter, this research could contribute government programmes for empowering SMEs as the pillars of Indonesian economy.

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