Indonesia Urges SMEs to Strengthen Digital Capabilities as Online Economy Expands
Indonesia’s Industry Ministry is encouraging small and medium enterprises (SMEs) to strengthen their use of digital technology as the country’s online economy continues to expand. With internet usage and e-commerce transactions rising steadily, the government is promoting digital literacy and marketing capabilities to help SMEs reach wider markets and remain competitive. According to the Industry Ministry’s recent statement, these initiatives form part of broader efforts to support national economic growth through digital transformation.
The ministry views digital adoption as an important step for smaller businesses seeking to compete with both domestic and imported products. Strengthening online promotion, improving digital capabilities, and expanding access to digital marketplaces are central to these efforts.
Digital Transformation as a Pathway for SME Competitiveness
Industry Minister Agus Gumiwang Kartasasmita said SMEs must enhance their capabilities to sustain growth in an increasingly competitive environment. Digital tools, particularly in marketing and online engagement, are expected to play a key role in expanding business reach.
“We are consistently implementing a digital literacy improvement program for SMEs to help them use and leverage digital marketing to expand their market reach,” — Agus Gumiwang Kartasasmita, Industry Minister, Indonesia
The programme is delivered in collaboration with regional industry offices, academic institutions, and business practitioners. This multi-stakeholder approach is intended to strengthen the sustainability and effectiveness of SME development initiatives across the country.
Rapid Growth in Indonesia’s Digital Economy
Indonesia’s digital economy has grown rapidly in recent years, creating new opportunities for SMEs. A survey by the Indonesian Internet Service Providers Association (APJII) estimates that the number of internet users will reach 229.43 million in 2025.
Meanwhile, data from the Trade Ministry indicates that e-commerce users are projected to reach 73.06 million in 2025. This represents an 11 per cent increase compared with 2024 and an 89 per cent rise compared with 2020. These figures highlight the expanding digital marketplace available to Indonesian businesses.
A report by Google, Temasek, and Bain & Company estimates that e-commerce transactions in Indonesia reached approximately Rp192.8 trillion, equivalent to US$71 billion, in 2025. Such growth underscores the importance of ensuring SMEs are equipped with the skills needed to participate in the digital economy.
Digital Literacy and Skills Development Initiatives
To support SMEs in adapting to this environment, the government has intensified digital literacy workshops and training programmes. These initiatives aim to help businesses understand online marketing tools, improve digital engagement with customers, and develop more data-informed business strategies.
Indonesia has also been advancing broader national efforts to strengthen digital skills and responsible technology use, including initiatives aimed at building digital competence for a safer and more inclusive society. Such programmes are intended to ensure that individuals and businesses can navigate the digital environment effectively and responsibly.
The ministry’s director general of SMEs, Reni Yanita, emphasised that digital marketing offers practical advantages compared with conventional approaches.
“Digital marketing is a must for businesses, especially SMEs, as it offers advantages over conventional marketing,” — Reni Yanita, Director General of SMEs, Industry Ministry
She added that emerging technologies, including artificial intelligence (AI), are creating new possibilities for businesses to enhance their marketing strategies.
“AI enables businesses to personalize promotions based on consumer preferences, predict market trends, and analyze customer behavior more accurately, thereby significantly increasing marketing effectiveness,” — Reni Yanita, Director General of SMEs, Industry Ministry
These developments align with wider national discussions about building responsible AI awareness and strengthening digital capabilities, including efforts focused on AI literacy while safeguarding critical thinking.
e-Smart IKM Programme Expands SME Participation
The Industry Ministry also continues to expand its e-Smart IKM programme, launched in 2017 to support SME digitalisation. The initiative provides training and guidance to help businesses adopt e-commerce platforms and digital marketing tools.
To date, 31,634 SMEs have participated in the programme through a range of digital literacy activities. By strengthening digital capabilities and encouraging wider technology adoption, the government aims to ensure SMEs remain resilient and competitive within Indonesia’s evolving digital economy.
