Meutya Hafid: Fast and Widespread Internet Connectivity is Key to Boosting Indonesia's Digital MSMEs

Jakarta, INTI – Minister of Communication and Digital Affairs, Meutya Hafid, has reiterated the government’s commitment to accelerating the growth of Micro, Small, and Medium Enterprises (MSMEs) in the digital sector by enhancing the quality of internet connectivity across Indonesia. Speaking at a press conference held at Menara Bank Mega, South Jakarta, on Monday (11/18/2024), she emphasized the critical role that stable and fast internet plays in driving the success of digital MSMEs.

"If the internet is still slow, it remains a significant barrier to the growth of digital MSMEs," Minister Meutya stated firmly, highlighting the necessity for quality internet access to enable small businesses to thrive in the increasingly competitive digital economy.

The Need for High-Speed Internet for Digital MSMEs

Meutya Hafid acknowledged that many areas in Indonesia still struggle with slow internet speeds, which impede the expansion and performance of digital MSMEs. According to data from the Ministry of Cooperatives and SMEs, Indonesia has over 64 million MSMEs, of which approximately 25%, or 16 million, have migrated to digital platforms. However, many regions, particularly rural and remote areas, lack access to adequate internet connectivity, leaving much of the potential for digital economic growth untapped.

"Improving connectivity is a priority. We want faster internet speeds with broader coverage to support our digital economy," she added.

Reports from Akamai Technologies indicate that Indonesia's average internet speed in 2024 stands at around 20 Mbps, far behind regional neighbors such as Singapore (200 Mbps) and Malaysia (75 Mbps). This stark difference underscores the urgent need for significant investments in digital infrastructure to close the digital divide.

The Economic Impact of Digital MSMEs

Digital MSMEs have emerged as a cornerstone of Indonesia's economic growth. According to Bank Indonesia, e-commerce transactions involving MSMEs reached IDR 400 trillion in 2023, reflecting a 20% increase from the previous year. However, this growth is only scratching the surface of what digital MSMEs can achieve with proper infrastructure and regulatory support.

"The potential for digital MSMEs remains very high. We are exploring new regulations to further stimulate their development," Meutya noted.

The government is drafting new policies aimed at incentivizing digital MSME adoption. These include easier access to financing, digital literacy training, and marketing support through national campaigns, which are expected to accelerate the integration of traditional MSMEs into the digital ecosystem.

Government Initiatives to Improve Internet Connectivity

Minister Meutya outlined several government initiatives aimed at boosting internet connectivity nationwide. These efforts include the expansion of fiber optic networks and the construction of Base Transceiver Stations (BTS) in underserved regions, as part of the Palapa Ring Project, which has already connected over 500 districts and municipalities.

In addition, the government is collaborating with telecommunications operators to accelerate the rollout of 5G networks in urban centers. As of 2024, 5G coverage in Indonesia extends to only 30% of urban areas, according to data from the Ministry of Communication and Information Technology (Kominfo).

"With enhanced infrastructure, digital MSMEs in rural areas can compete more effectively in both national and international markets," the minister explained.

Tackling Online Gambling and Cybersecurity

The minister also highlighted the government’s efforts to maintain a safe and secure digital ecosystem. Over 2 million illegal gambling websites have been blocked in 2024, reflecting the administration's commitment to protecting internet users, including MSMEs, from cybercrime.

"Cybersecurity is one of our top priorities. Digital MSMEs must operate in a secure and trustworthy environment," Meutya stressed.

Empowering MSMEs with Digital Literacy

To support the digital transition, the government is scaling up its training programs for MSMEs. To date, more than 1.5 million MSME operators have participated in training sessions covering digital literacy, online marketing strategies, and digital store management. These programs aim to enhance the competitiveness of Indonesian MSMEs in the global digital economy.

A Vision for the Future

Meutya Hafid expressed her optimism about the future of digital MSMEs, emphasizing their pivotal role in shaping Indonesia’s economic trajectory. She noted that by addressing barriers to internet access and providing targeted support, digital MSMEs could become a significant driver of national economic resilience.

"Digital MSMEs are not just the future of Indonesia but an integral part of our vision to become Southeast Asia’s largest economy by 2045," she concluded.

The government's commitment to improving internet connectivity and fostering the growth of digital MSMEs is a strategic move toward achieving inclusive economic transformation. With the right blend of regulatory measures, infrastructure improvements, and capacity-building programs, Indonesia is poised to emerge as a global leader in the digital economy.