Apindo Boss Unveils MSMEs' Vital Roles in Workforce Absorption, Economic Growth

TEMPO.CO, Jakarta - The Indonesian Employers' Association (Apindo) said that workforce condition has become one of the challenges in achieving economic growth. "In a modern economy, everything is interconnected," said Apindo chair Shinta Kamdani during the Diplomat Success Challenge event in South Jakarta on Friday, June 13, 2025.

According to the data from the Social Security Agency for Employment (BPJS Ketenagakerjaan), about 40,000 people filed claims for job termination benefits during the first three months of 2025. The textile and electronic industries, she added, were the sectors most affected by layoffs.

Shinta then mentioned the role of micro, small, and medium enterprises (MSMEs) and entrepreneurs in Indonesia's economic growth. "MSMEs have employed 97 percent of the workforce in Indonesia," she said.

Additionally, she said, MSMEs contribute more than 61 percent to the gross domestic product (GDP), actively driving the economy forward amidst a flurry of challenges. "They are shock absorbers, they are the economic engine, and they are the future builders," she added.

Indonesia, she said, is currently home to 66 million MSMEs, but they don't operate without obstacles, which include the accessibility of the supply chain.

According to the Apindo boss, a mere 7 percent of MSMEs are connected to the domestic supply chain. The data was derived from the National Development Planning Agency.

Meanwhile, only 4 percent of MSMEs have successfully entered the global supply chain. "The figure is very low compared to other countries in the region," she said, giving the example of Vietnamese MSMEs with 20 percent successfully penetrating the global market.

Moreover, the Indonesian MSMEs' contribution to exports remains limited at 15.7 percent. "This figure is far behind that of, for instance, Thailand, which reaches up to 29 percent," said Shinta.

She revealed that, based on a survey conducted by Apindo with 2,000 entrepreneurs, 51 percent of MSMEs face limitations in accessing finance and capital, tedious bureaucratic processes, high loan costs, and risk perception. Moreover, over 80 percent of MSMEs still rely entirely on personal funding to start and develop their businesses.

Shinta disclosed that 35 percent of MSME entrepreneurs express difficulties in marketing and promotion, with only 9 percent of participants having access to technology. She also urged the Ministry of MSMEs to find solutions to improve these challenges.

Nevertheless, she said, these limitations must become catalysts to drive equal access for MSMEs. She maintained that MSMEs could become a national strength with proper business access.

"The true strength of Indonesia's economy lies not only in its capital towers, but in the hands of tens of millions of MSMEs moving patiently and uniformly," she concluded.

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