The Futures of MSMEs in Indonesia (2022)

Strategic foresight

The Micro, Small, and Medium Enterprises (MSMEs) sector, consisting of more than 65 million enterprises – 64.5% of which are women-owned, represents over 60% of Indonesia’s GDP. Crucially, MSMEs provide employment for 97% of the nation’s total workforce – around 117 million workers. Hence, this sector is often considered the backbone of the Indonesian economy and a driver of future economic growth. MSMEs also play a vital role in addressing the needs of Indonesian consumers and businesses. In times of rapid change, global crises, and high uncertainty, the government needs to prepare for the unexpected - particularly as it relates to MSMEs. This is of particular importance for the Ministry of National Development Planning (Bappenas), which is preparing Indonesia’s Long Term Development Plan (2025–2045). When thinking about the futures of MSMEs, key questions need to be addressed, such as: a) What could the future landscape of MSMEs in Indonesia look like?; b) What are the key emerging issues for the sector?; c) What could potentially alter or disrupt the future of MSMEs as we currently envision it? In order to help address these questions, UN Global Pulse and Bappenas conducted a foresight exercise on the futures of MSMEs in Indonesia. The core technique used was horizon scanning, with the work being conducted by a team of 12 scanners in Bappenas supported by UN Global Pulse. The specific objectives of the exercise were to understand what potential developments could affect the futures of MSMEs, build foresight capacity through learning-by-doing, and inform the development of robust policies and strategies.