The Role of Government Policy in Enhancing the Competitiveness of Indonesian MSMEs

Abstract

This study examines the role of government policy in enhancing the competitiveness of Indonesian Micro, Small, and Medium Enterprises (MSMEs). Utilizing a mixed-methods approach, the research integrates quantitative data from surveys conducted with MSMEs across various provinces in Indonesia and qualitative data from interviews with key stakeholders, including policymakers, MSME owners, and industry experts. The findings reveal that while government policies have facilitated improved access to financing—leading to notable growth in revenue—these interventions have had limited impact on expanding market access and fostering innovation among MSMEs. The study also identifies bureaucratic inefficiencies and complex application processes as significant barriers that hinder the effective implementation of government support programs. Based on these insights, the research suggests the need for policy reforms focused on simplifying procedures, tailoring support to specific industry needs, and enhancing transparency and accessibility of information. These changes could potentially amplify the positive impacts of government policies on the competitiveness of Indonesian MSMEs.