Evidence on the use of internet for businesses by MSEs in a Developing Country. The Indonesian case

Abstract

This study aims to examine the development of Indonesian micro and small enterprises (MSEs) in utilizing the internet for their businesses. This is a descriptive study in nature, which analyses secondary data on MSMEs. It also reviews key literature on the use of ICT by MSMEs in developing countries. It shows that MSMEs, dominated by MSEs, have been the main player in Indonesian domestic economic activities as they accounted for more than 90 per cent of all firms and contributed to more than 50 per cent of gross domestic product (GDP). But, only a small fraction of total MSEs in Indonesia that utilize the internet for business, and the intensity of internet usage by MSEs varies by province and type of business. This is the first macro-level study ever conducted in Indonesia on the use of internet by MSEs based on national data from 2016 Economic Census conducted. Thus, findings of this study may add new empirical evidence to the literature on the utilization of ICT by MSMEs in developing countries.

Key words
Micro; small and medium enterprises (MSMEs); micro and small enterprises (MSEs); internet; information and communication technology (ICT); e-commerce