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The Role of SMIEs in Indonesia’s Industrialization

Author

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  • Latif Adam

Abstract

This paper examines the ability of SMIEs (small and medium industrial enterprises) to maintain their important role in the rapid process of Indonesia’s industrialization in conditions where various government economic policies tended to favor their larger counterparts (large industrial enterprises/LIEs) and discriminate against them. It highlights the significance of business cooperation in enabling SMIEs to maintain their role (particularly in creating employment, generating income, and contributing significantly to increasing Indonesia’s industrial exports) by facilitating them to overcome the problem of limited technology, market narrowness, capital constraints, and informational restraints. This suggests that the government should pay more attention to the creation of a competitive business environment to provide incentives for SMIEs to develop business cooperation.

Suggested Citation

  • Latif Adam, 2009. "The Role of SMIEs in Indonesia’s Industrialization," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 57, pages 159-180, August.
    • Handle: RePEc:lpe:efijnl:200908
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    More about this item

    Keywords

    Small and Medium Industrial Enterprise; business cooperation; growth; industrialization; Indonesia;
    All these keywords.

    JEL classification:

    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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