Jakarta, INTI - The use of artificial intelligence (AI) is considered increasingly important for micro, small, and medium enterprises (MSMEs) to optimize productivity and competitiveness. However, the adoption of this technology still faces several challenges, ranging from limited digital skills to limited access to technology.
The Organisation for Economic Co-operation and Development (OECD) stated that AI has the potential to help MSMEs improve operational efficiency, productivity, product innovation, and expand market reach. However, the rate of AI adoption among small businesses remains relatively low compared to large companies due to constraints in skills, financing, digital infrastructure, and organizational readiness.
AI Adoption by MSMEs in Indonesia
In Indonesia, this issue has also attracted the attention of several MSME support organizations. KUMPUL Impact believes that digital transformation requires increased capacity among business owners so that technology can be utilized to meet daily business needs.
Faye Wongso, Founder and Chairperson of KUMPUL Impact, stated that the challenges faced by MSMEs are not only related to access to financing, but also the ability to utilize technology and connectivity to markets and supply chains.
"Business growth will not occur in a fragmented system. Therefore, what needs to be strengthened is not only entrepreneurs, but also the connectivity between financing, markets, technology, aggregators, cooperatives, and the supply chains that support them," she said.
Based on data compiled by KUMPUL Impact, less than 1% of the workforce in Indonesia has advanced digital skills, while around 50% of new workers have basic to intermediate digital skills. This situation is considered a challenge to accelerating AI adoption among MSMEs.
Digital Capacity Building Effort
As part of its digital capacity building efforts, KUMPUL Impact, in collaboration with the ASEAN Foundation and AI Ignition Indonesia, is running the AI for MSME Advancement in ASEAN (AIM ASEAN) program. The program targets more than 32,000 MSMEs in more than 20 cities in Indonesia through training on utilizing AI to support business activities.
In addition to digital transformation, the organization also runs a program to strengthen the MSME ecosystem through access to financing, capacity building, supply chain strengthening, and market access. To date, the EmPower II program, in collaboration with UN Women and PT Permodalan Nasional Madani (PNM), has reached over 6,000 women ultra-micro entrepreneurs and farmers.
Thus, the implementation of AI is seen as more than simply keeping up with technological developments, but also as a tool for improving business efficiency.
Conclusion
The use of artificial intelligence is considered increasingly important for MSMEs to optimize productivity, efficiency, innovation, and competitiveness. However, the AI adoption is still slow due to digital skills, financing, infrastructure, and organizational unreadiness. The OECD states that small businesses are still lagging in utilizing AI compared to large companies due to these various obstacles. Founder of KUMPUL Impact Faye Wongso said that digital transformation needs to be supported by strengthening the ecosystem that includes access to financing, technology, markets, cooperatives, and supply chains for optimal business growth.
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