Small businesses are the backbone of Indonesia’s economy, representing 60 per cent of GDP. When Covid-19 hit last year, these businesses saw profits collapse and employment plummet.
This has huge, immediate consequences on Indonesia’s economy, says Damien Delard, Southeast Asia, Hong Kong, Taiwan and Japan Vice President of Sales, Alcatel-Lucent Enterprise (ALE). The government and the private sector have to work hand in hand to go through the Covid-19 crisis.
From partnering with tech companies to improving connectivity, Delard discusses three ways how Indonesia can help its small businesses rebuild from Covid-19.
Partner with large tech companies
“Covid-19 impacted all industries – but small businesses have been challenged the most,” says Delard. Last April, around 70 per cent of Indonesian small businesses were forced to stop operations either temporarily or permanently, according to a survey by the International Labour Organisation (ILO) in April.
Small businesses with an online presence are more resilient to future shocks, as they are likely to be able to continue producing and selling goods, a survey by the Mandiri Institute found.
Digitalising small businesses can’t be done by the government alone, Delard emphasises. Large companies also need to collaborate with the government to help local businesses build their digital presence.
Bukalapak, a local e-commerce company, has helped the country’s millions of small businesses go online. The government has also collaborated with the country’s six largest e-commerce websites, including Lazada, Shopee and Tokopedia, to allow small businesses to promote and sell their products.
These larger companies have the digital expertise small businesses need, and can help them innovate in digital payments and billing, says Delard.
ALE’s cloud-based communications platform – Rainbow, can help small businesses move operations online. ALE has partnered with one of Indonesia’s fintech companies to integrate its application with the Rainbow platform, using open APIs. The fintech company now uses it value add to their customer interactions – be it over chat, voice, or video – and maintain its online presence.
With 17,508 islands, connectivity is a “key issue” for Indonesia, says Delard. Digital connectivity can be spotty at times, and enhancing ICT infrastructure across more regions will be key, he adds.
That will not only benefit businesses, but also schools across Indonesia. “Remote education is already a challenge. If the connectivity is no good, that will be an even bigger challenge,” he says.
ALE is partnering governments and service providers across different countries to provide connectivity to rural areas. That is done through its Wi-Fi solutions and Rainbow collaboration tool, and has enabled rural areas to stay connected and collaborate with cities.
Train small businesses and citizens
As countries accelerate digitization, many have rolled out training courses in cybersecurity, AI, and more. But the market is now oversaturated with content, Delard says.
Small businesses need to be able to “identify what their staff really need.” Incubators that provide small businesses with access to expertise and tools at a low-cost will help them digitalise, he adds.
ALE is “very committed” to help the Indonesian government train its small businesses. In partnership with the government, the company organised hackathons in 2018 to help startups market their products. In 2019, ALE continued the effort by organising ALE Geek Battle, a scholarship that provides opportunities for Indonesia’s talents to enhance their digital capabilities.
The Indonesian Ministry of Communications and Technology also started the Digital Talent Scholarship programme for 50,000 people during the pandemic. The Online Academy is part of the scholarship, and holds virtual training programmes on AI, data analytics and cloud computing.
Helping local businesses go digital will be key, as they contribute greatly to Indonesia’s GDP and employment. Collaborating with larger tech companies and enhancing connectivity will be crucial steps in this journey.