Empowerment of Small and Medium Enterprises (SMEs) as

Economic Drivers in Village

Mardani

STIE Trisna Negara, South Sumatra, Indonesia

Keywords: Empowerment, Economic Drivers

Abstract: The prosperity of a country can be measured from various fields or different perspectives, one of them from

the perspective of the country's economic conditions. Entering the era of 2006 as the era of the recovery of

the structure of economic life after seven years of economic crisis and continued to the multidimensional

crisis in 1998, so that to improve the level of the economy in Indonesia one of them by empowering the

Indonesian people through SME programs. Judging from the size of the workforce, Small Businesses have a

workforce greater than five people up to a maximum of 20 people. Have a turnover of at least 200,000,000

per year. Whereas the criteria for a medium enterprise, if it has a workforce of more than 20 people, is equal

to 100 people. Of the number of SMEs in Indonesia, there are quite several, around 99.9% of the total number

of companies in Indonesia. SMEs can accommodate 99% of the existing workforce. In the formation of Gross

Domestic Product (GDP), SMEs account for only 59%, and large businesses contribute 41% of GDP. Small

and Medium Enterprises (SMEs) have a strategic role in national economic development. In addition to

playing a role in economic growth and employment, it also plays a role in the distribution of development

results. In the economic crisis that occurred in our country since some time ago, where many large-scale

businesses have stagnated or even stopped their activities, the Small and Medium Enterprises (SME) sector

proved to be more resilient in dealing with the crisis. So that the growth and empowerment of the SME sector

becomes a necessity in the context of creating new jobs, both in the formal sector and the informal sector

1 INTRODUCTION

Flourishing of a nation can be estimated from

different fields or various perspectives, one of which

is from the perspective of the nation's monetary

conditions. Indonesia is a creating nation that is in

critical need of progress and reshuffle in the financial

framework to accomplish a higher monetary level to

accomplish the success of a nation's life.

Entering the time of 2006 as the time of the

recuperation of the structure of monetary life

following seven years of a financial emergency and

proceeded to the multidimensional emergency in

1998. It appears that the truth of national financial life

improvement is relied upon to have the option to

change the components of life to be progressively

prosperous like other Asian nations additionally hit

by the emergency the equivalent, clearly still a long

way from desires, so with an end goal to improve the

degree of the economy in Indonesia one of them by

engaging the Indonesian individuals through SME

programs. Small and Medium Enterprises (SMEs)

have a key job in national financial improvement, and

notwithstanding assuming a job in monetary

development and work, it likewise assumes a job in

the dispersion of advancement results. In the financial

emergency that happened in our nation since some

time back, where some enormous scale organizations

have stagnated or even halted their exercises, the

Small and Medium Enterprises (SME) segment

demonstrated to be stronger in managing the

emergency.

Considering the encounters that have been looked

by Indonesia during the emergency, it would not be

intemperate if the improvement of the private

segment is centred around SMEs, besides this

specialty unit is frequently ignored just because its

generation results are taking things down a notch and

have not had the option to rival different specialty

units. SMEs (Small and Medium Enterprises)

notwithstanding being an option in contrast to new

openings, SMEs likewise assume a job in driving the

pace of financial development after the money related

emergency when large organizations experience

issues building up their organizations. At present,

SMEs have contributed significantly to national and

state incomes of Indonesia.

Mardani, .

Empowerment of Small and Medium Enterprises (SMEs) as Economic Drivers in Village.

DOI: 10.5220/0009964606730676

In Proceedings of the International Conference of Business, Economy, Entrepreneurship and Management (ICBEEM 2019), pages 673-676

ISBN: 978-989-758-471-8

673

What is more, frequently we discover Small and

medium organizations (SMEs) that have jumped up

because of the effect of the ongoing financial

emergency where individuals need to make a

substantial commitment to inventive monetary

advancement with the goal that the plan to build up

Small and medium organizations (SMEs) in country

regions has developed.

2 LITERATURE REVIEW

2.1 Profile of Small and Medium

Enterprises (SMEs) in Indonesia

SMEs are a sort of business possessed by people, their

business elements are not legitimate elements or

business substances that are lawful, so it very well

may be said that SMEs are a type of private

companies in the network whose foundation depends

on somebody's drive. This business element is

notwithstanding being autonomous and is anything

but a backup or part of an organization that is claimed,

controlled, or associated legitimately or by

implication with a private venture, medium business

or huge business. The vast majority accept that SMEs

advantage certain gatherings. At the point when, in

certainty, SMEs are instrumental in decreasing the

joblessness rate in Indonesia, SMEs can retain

numerous Indonesian laborers who are as yet jobless

(Putri, 2016).

According to the size of the workforce, Small

Businesses have a workforce more prominent than

five individuals up to a limit of 20 individuals. Have

a turnover of in any event 200,000,000 every year

though the criteria for a common endeavor, if it has a

workforce of more than 20 individuals, is equivalent

to 100 individuals. Of the quantity of SMEs in

Indonesia, there are a significant number of around

99.9% of the complete number of organizations in

Indonesia. SMES can oblige 99% of the current

workforce. In the development of Gross Domestic

Product (GDP) SMEs represent just 59%, and large

organizations contribute 41% of GDP. Demonstrates

most of our workforce is still low in compensation,

and many do not work as indicated by their

instruction, because of the huge number of

employment searchers, such a large number of

workers in its present condition.

Experience demonstrates that when the financial

emergency hit us toward the part of the bargain by a

profound retreat, SMEs were strong. (Kompas,

November 2003). Our subsidence kept going just a

single year, in particular in 1998, whose GDP had

dropped. In 1999 GDP had begun to increment by

0.8%. In this period, enormous organizations did not

work as organization trains, because most were in a

tough situation and were taken care of by IBRA.

Remote speculators are hesitant to enter because

Indonesia is viewed as too high hazard. For this

situation, just the SME division can drive financial

development figures.

Small and Medium Enterprises (SMEs) have a

key job in national financial advancement, because

other than having a job in monetary development and

work, it likewise assumes a job in the appropriation

of improvement results. In the monetary emergency

that happened in our nation since some time prior,

where some huge scale organizations have stagnated

and even halted their exercises, the Small and

Medium Enterprises (SME) part demonstrated to be

stronger in managing the emergency (Ainuri, 2009).

Considering the encounters that have been looked by

Indonesia during the emergency, it would not be

extreme if the advancement of the private division is

centred around SMEs, besides this speciality unit is

frequently ignored just on the grounds that its

generation results are from a more minor perspective

and have not had the option to contend with different

speciality units.

SMEs (Small and Medium Enterprises)

notwithstanding being an option in contrast to new

openings, SMEs likewise assume a job in driving the

pace of financial development after the money related

emergency when enormous organizations experience

issues building up their organizations. At present,

SMEs have contributed incredibly to provincial pay

and the pay of the Indonesian State (Bratakusumah

and Supriady, 2004).

SMEs have nothing to do with inflows of remote

capital and as though they are outside the proper

economy with a huge volume. SMEs have an

autonomous financial life. SMEs, which have been

embraced by the administration and monetary money

related establishments, have ended up having

contributed incredibly to the retention of work and

give resistance in an emergency. (Kwik Kian Gie,

2003) This implies SMEs not just in the monetary

sense give pay and work to the least fortunate

segments of our kin, yet also give security and a

shield against social strife.

2.2 SMEs Becomes Alternative to

Economic Development

Small-scale business is a gainful financial business

that stands alone which is completed by people or

business elements that are not backups that are

claimed, controlled or become a section either

legitimately or in a roundabout way of medium or

huge organizations that have net resources of more

than Rp 50,000,000 up to a limit of Rp 500,000,000

ICBEEM 2019 - International Conference on Business, Economy, Entrepreneurship and Management

674

barring area and structures for organizations. Has

yearly deals aftereffects of more than IDR

300,000,000 up to a limit of IDR 2,500,000,000. In

the interim, a medium-sized business is an

autonomous financial beneficial business did by an

individual or business substance that is certifiably not

a backup of an organization which is possessed,

controlled or turns into a section either legitimately or

in a roundabout way of a medium or enormous

business that has a total assets of more than Rp

500,000,000 to with a limit of IDR 10,000,000,000

barring area and structures of business premises. Has

offers of more than Rp 2,500,000,000 up to a limit of

Rp 50,000,000,000.

SMEs likewise uses an assortment of normal

assets that have the potential in a territory that has not

been handled monetarily. SMEs can process Natural

Resources in every area. This contributes enormously

to territorial salary, just as Indonesian state income.

Small and medium organizations have demonstrated

to have the option to live and flourish in a tempest of

emergency for over six years, their reality has had the

option to add to GDP by almost 60%, work up to

88.7% of the whole workforce in Indonesia and the

commitment of SMEs to sends out in 1997 it was

7.5% (BPS in 2000).

In confronting the time of unhindered commerce

and territorial independence, the improvement of

SMEs is aimed at building up a helpful business

condition for SMEs, creating money related

foundations that can give access to straightforward

and less expensive wellsprings of capital, giving non-

budgetary business advancement administrations to

SMEs that are increasingly powerful, and the

arrangement of vital collusions among SMEs and

different SMEs or with enormous organizations in

Indonesia or abroad. The development or passing of

Small and medium organizations in the period of

facilitated commerce relies upon the capacity to

contend and expand effectiveness and structure

business systems with different foundations.

A portion of the upsides of SMEs to huge

organizations are advancements in innovation that

have effectively happened in item improvement,

close helpful relations inside Small organizations, the

capacity to make enough openings for work or

retention of work, adaptability and capacity to adjust

to changing economic situations with quick

contrasted with enormous scale organizations that are

commonly bureaucratic, and there are administrative

dynamism and the job of business enterprise.

3 DISCUSSION

3.1 Empowerment of Small and

Medium Enterprises (SMEs)

The advancement of the world economy will be

commanded by small and medium organizations.

Districts that have a solid system of independent

companies will prevail in the modern challenge in the

local and worldwide markets. Since nearby

governments should focus because SMEs are

territorial resources. Neighborhood governments

have known from the earliest starting point the job of

SMEs in their local economies. The test looked by

every locale is planning business due to the fast

increment in the workforce. This can be seen from the

high joblessness rate in practically all areas. The job

of SMEs is felt to be significant because this division

is not just a wellspring of occupation, yet additionally

gives business both straightforwardly and by

implication for individuals with low degrees of

information and abilities. This area is exceptionally

open to anybody, so do not be shocked if there are

such a significant number of this fluctuated.

Endeavors to enable the SME segment are

planned to build the respect and status of SMEs so

that SMEs are better ready to assume a job in the

national financial field. Frequently strengthening

endeavors are trapped in strengthening inclinations.

This should be done with the goal that specialists and

experts who do not comprehend and may not accept

to be the premise of the idea of improvement.

As per Kartasasmita (1996), SMEs strengthening

is an elective answer for different quandaries looked

by the SME segment. Concerning the different

predispositions that may happen in strengthening, to

be specific: The central inclination, that the

strengthening of SMEs is progressively worried about

material help (capital) than specialized or

administrative aptitudes. Such examples and

presumptions regularly bring about strengthening

endeavours as a misuse of assets and assets, since

they do not focus on specialized and administrative

perspectives. The subsequent inclination, the thought

that the SMEs strengthening project is a program

from over (the legislature), and the individuals who

are enabled are less vital to usage. Great collaboration

between the administration and the SME segment in

the strengthening procedure is required; in this

manner, the strengthening system is not pathetic.

Regarding the second inclination, the SME

strengthening venture is regularly drained, the

strengthening project has finished. The third

inclination, the SME segment, is viewed as not

realizing what is required or how to improve their

part. Subsequently, they should be guided and guided

Empowerment of Small and Medium Enterprises (SMEs) as Economic Drivers in Village

675

and do not should be engaged with arranging

regardless of whether it concerns themselves.

Because of these suspicions, make SME

strengthening ventures futile, and the engaged

individuals stay weak.

In the long haul, the SMEs strengthening project

must have the option to move the pyramid business

visionary model to the rhombus business visionary

model. From this model, most of our business person

profile was private companies (the lower layers),

which were enormous in number. While a Small part

is enormous business visionaries, who control a

segment of investment, such conditions will

enormously disturb the country's monetary

improvement later on.

Later on, the profile of Indonesian business

visionaries must be changed to a rhombus, where

most of the business visionaries are the white-collar

class. Such conditions will have the option to

diminish the hole among rich and poor. With respect

to the determinants of adjustment concerning the

issue of enhancements in the framework (design) of

industrialization, instruction, network improvement,

and corporate advancement. The majority of that will

be done on the off chance that it depends on the soul

of vision that mirrors our fellowship as a country.

Monetary advancement is basically for the

flourishing of all things considered to be specific to

the Indonesian individuals. If the profile of the

rhombus business person model can be accomplished,

it implies that the SME part will genuinely be the

foundation of the national economy. The order of the

constitution (the 1945 Constitution) will be

acknowledged as a general rule, and the majority of

that will have the option to help the procedure of

national solidarity and simultaneously ensure the

event of national monetary dependability. The soul of

vision must be the premise of each strategy that can

influence the operations of the determinant of

progress. Vision can be viewed as a responsibility that

must be executed and not a talk. This responsibility is

significant particularly for pioneers or chiefs because

the power and authority had can influence the

determinants of progress.

Industrialization must reflect imaginative and

creative HR, with the goal that the items delivered,

have high aggressiveness, both in household markets

and in worldwide markets. Training in the broadest

sense turns into a significant way of looking for that

change. Network advancement here suggests the

frame of mind of the enterprising network. The soul

and soul of the enterprise must be ingrained in the

network. This is altogether expected to build up the

SME division network. This is proof that MSMEs are

security valves, dynamists and stabilizers of the

Indonesian economy that are valuable as drivers of

the town economy.

4 CONCLUSIONS

Improvement and strengthening of the individuals'

economy, particularly the SME area must be a

national duty for the fate of the country. The

challenge looked by every area is the planning of

work because of the fast increment in the workforce.

This can be seen from the high joblessness rate in

practically all districts. The job of SMEs in the

change time is very vital because it isn't just a

wellspring of business, yet additionally gives

occupations both legitimately and by implication for

individuals with low degrees of information and

aptitudes. SMEs will promise enormous benefits,

particularly whenever upheld by advanced offices

and foundations.

Moreover, from existing information, that the

improvement of the SME part from year to year

demonstrates a pattern of expansion both in the sort

of business involved and the nature of its business.

With this condition on the off chance that it is created

in all degrees of our general public, at that point there

will be no a greater amount of our general public that

doesn't work, aside from the individuals who form the

earliest starting point were essentially lethargic. This

worldview that isn't great is by all accounts evacuated

and no longer perfect with present-day existence with

the rule of time is money.

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