Indonesian policy makers to improve productivity and working conditions of Indonesian SMEs

Around the globe, small-sized and medium-sized enterprises are the main providers of employment. In Indonesia, similarly SMEs are one of the economic pillars of the country. In 2012, SMEs have contributed 57.4 per cent to the Gross National Product and also play a great role in tackling unemployment by employing 107.6 million of workers (data from the Ministry of Cooperative and SMEs).

Press release | Jakarta, Indonesia | 13 June 2017
JAKARTA (ILO News) - Around the globe, small-sized and medium-sized enterprises are the main providers of employment. In Indonesia, similarly SMEs are one of the economic pillars of the country. In 2012, SMEs have contributed 57.4 per cent to the Gross National Product and also play a great role in tackling unemployment by employing 107.6 million of workers (data from the Ministry of Cooperative and SMEs).

However, SMEs still show significantly lower levels of productivity than large enterprises. Being more vulnerable to external shocks, most Indonesian SMEs have been finding it difficult to sustain operations due to the global financial crisis, new ASEAN China free trade area agreement and, as a result, the quality of their jobs is being compromised in the process.

A systemic approach is required that encompasses an effective combination of macro- and meso-level policies, the creation of a conducive business environment, the strengthening of SME support institutions together with interventions at the enterprise level."

Michiko Miyamoto, Country Director of the ILO in Indonesia
To improve productivity and working conditions in SMEs particularly at the policy making level, the International Labour Organization (ILO), in collaboration with the Organization for Economic Cooperation and Development (OECD) and the Ministry for National Planning Development (Bappenas), will conduct a three-day meeting titled “Productivity and Working Conditions in SMEs for Policy Makers” from 13-16 June 2017 in Jakarta.

Targeted to national policy makers at the deputy minister and director general levels, the meeting will involve policy makers from six ministries: BAPPENAS, Coordinating Ministry for Economic Affairs, Ministry of Manpower, Ministry of Industry, Ministry of Cooperative and SMEs and the Ministry of Foreign Affairs. The meeting will also involve key labour actors and policy makers from workers’ organizations, the Indonesian Employers’ Association (APINDO), the Indonesia Chamber of Commerce (Kadin), the Board of Creative Economy (BEKRAF) and other relevant organizations.

“A systemic approach is required that encompasses an effective combination of macro- and meso-level policies, the creation of a conducive business environment, the strengthening of SME support institutions together with interventions at the enterprise level,” said Michiko Miyamoto, Country Director of the ILO in Indonesia.

During the meeting, the participants will exchange views on new ways to gain an improved understanding of the importance of linkages between policy measures and SME policies and to strengthen coordination as well as cooperation among governmental ministries and other relevant labour actors of the country.

In addition, the participants are expected to have better understanding and willingness to jointly implement the national programme to improve SMEs’ productivity and working conditions named Sustaining Competitive and Responsible Enterprise (SCORE) programme. The meeting will conclude with greater integration of national strategies and more coordinated policies aimed to improve SMEs’ working conditions and productivity.

The SCORE programme was adopted by the Government of Indonesia, through the Ministry of Manpower in 2012, by incorporating the SCORE methodology and modules into basic curriculum for the training of new national productivity instructors at the National Productivity Training Centre, which has since trained 46 instructors and labour inspectors.

Initially led by the ILO, the SCORE programme is designed to enhance productivity and competitiveness of SMEs. To date, there are more than 200 SCORE participating companies in more than 13 provinces. Several SCORE companies had been awarded with Parama Karya Award, the highest productivity achievement award by the Government of Indonesia in 2011, 2013, 2015 and 2016.

The SCORE programme was initially funded by the Swiss State Secretariat for Economic Affairs (SECO) and the Norwegian Agency for Development (NORAD). Indonesia has been chosen as one of nine countries, along with India, China, South Africa, Ghana, Viet Nam, Myanmar, Peru and Colombia to implement the SCORE programme.

For further information please contact:

Januar Rustandie
Manager of the ILO’s SCORE programme
Tel.: +6221 3913112 ext. 118
Email: januar@ilo.org

Pertiwi Triwidiahening
Staff of the ILO’s SCORE Programme Officer
Tel.: +6221 3913112 ext. 108
Email: pertiwi@ilo.org

Gita F. Lingga
ILO’s Communications Officer
Tel.: +6221 3913112 ext. 111
Email: gita@ilo.org