Strengthening MSMEs for Inclusive Growth
How We Combine Data Analytics & Service Design Blog Series
In Indonesia, micro, small and medium enterprises (MSMEs) contribute significantly to the national economy, absorbing 97 per cent of the total workforce in 2020. Whilst opportunities abound with increasing digitalization, many of these enterprises often encounter challenges with respect to accessing financial services, marketplaces, production materials, amongst others. To answer critical policy questions, the Data & Information Center and the Directorate of Cooperatives & SMEs Development within Indonesia’s Ministry of National Development Planning (Bappenas) have been collaborating with UN Global Pulse through Pulse Lab Jakarta to map the geospatial distribution of MSMEs at the district level. Relying on a mixed-methods approach, the research leverages a mix of traditional and non-traditional datasets, as well as service design.
In recent years, the Government of Indonesia has designed numerous support programmes intended to incentivise the country’s MSMEs. Spread across different ministries and institutions, these programmes are generally not well integrated. However, as the COVID-19 crisis has shown, such integration is important for understanding broader policy dynamics, which holds true when it comes to strengthening MSMEs in the post-pandemic recovery.
From programme planning to implementation, having a unified MSMEs database is paramount. This is to ensure that intended policy outcomes can be fully realised through the analysis of comprehensive data that provides actionable insights. The Government’s cash transfer programme for micro enterprises affected by COVID-19 has highlighted this importance, particularly as it relates to identifying beneficiaries most in need, as well as monitoring and evaluating the programme’s impact.
Whilst the Ministry of Cooperatives and SMEs Development is in the process of building a unified database of cooperatives and MSMEs across the country’s extensive archipelago, the current need for reliable data to inform responsive policies cannot be deferred. This was our motivation to develop an informational data analysis tool that could provide empirical insights on the geospatial dynamics of MSMEs. Besides data analytics, below we discuss how we employed service design to explore the intersection between the system and its users.
A Mixed-Methods Approach
We started out with a series of tailored data dives to identify what traditional and non-traditional datasets might be relevant, in addition to surveying their availability and assessing existing data gaps. The dives’ key participants included data scientists, data analysts, policy analysts, and programmers from both Bappenas and Pulse Lab Jakarta, supported by domain experts from the Statistics Indonesia, Padjadjaran University, the Institute for Economic and Social Research at the University of Indonesia, and UKM Indonesia who provided contextual knowledge.
Analysing eight traditional datasets from Statistics Indonesia (the national statistics bureau), in combination with six non-traditional datasets from Facebook, the process not only served as a learning-by-doing capacity building exercise — it was also useful in assessing existing resources to then identify capacity gaps that need to be filled for effective implementation of an integrated, country-wide MSMEs data system. To ensure optimization of any data-driven dashboard, infrastructure and organizational arrangements are a must. In the context of Bappanas, these data dives allowed us to develop recommendations on the skills and capabilities that would be required for effective adoption and maintenance of such tool.
Concurrently, understanding the interactions between a dashboard and its potential users is important. With this in mind, we applied a service design approach, involving user research, systems mapping, user testing and service blueprinting. This was a collaborative process involving Bappenas and Pulse Lab Jakarta, whereby user research was conducted to better understand the roles of potential users and technical custodians, as well as a systems mapping exercise to inform the design of the dashboard.
In particular, the user research unearthed insights on the expected uses of the tool within the Government, in conjunction with existing and emerging policy priorities. The holistic approach of service design also allowed the team to build linkages between the dashboard itself and the Government’s long-term plan for an integrated MSMEs database in Indonesia. From the two mock-ups of the dashboard that resulted, we were able to glean useful insights related to the needs of the users through prototyping and on further improvements needed.
Learnings and next steps
The datasets examined were beneficial for conducting comparative analysis at the district level. For example, by overlaying the Economic Census and Village Potential data we could infer the level of internet access for MSMEs at the district level. We were also able to identify additional datasets that can be used to provide a more comprehensive view beyond MSMEs geospatial dynamics, for example to identify enablers and inhibitors among agriculture-specific enterprises. Altogether, this mixed-methods approach that fused data analytics and service design helped to shed light on some of the key components that should be considered in the dashboard design, as well as on elements needed for its smooth adoption, implementation and optimization. As part of the development of a unified MSMEs database, it is envisaged that this dashboard will also be integrated to ensure data flows and sustainable pipelines for data insights.
In 2022, the research will take on a futures and foresight lens to look at emerging trends and signals on the horizon, and explore how they could potentially influence the future dynamics of MSMEs in Indonesia and the broader Asia Pacific region. Supported by UN Global Pulse as the experts on this futures and foresight approach, the horizon scanning exercise is timely given the preparations for the background study on Indonesia’s National Long-Term Development Plan (2025–2045). These studies are typically undertaken by Bappenas to ascertain actionable insights during the development planning process, where an interdisciplinary group of academicians and practitioners are invited to share knowledge and ideas. Focused on MSMEs, the same will be done this time around to provide critical insights to policymakers, which can be harnessed to formulate responsive and future-proof policies for the next 20 years.
UN Global Pulse is also conducting a similar futures and foresight exploration in Cambodia this year, read more.
Authors: Mariska Yasrie (Associate Planner in the Directorate of Cooperatives & SMEs Development, Ministry of National Development Planning) and Vitasari Anggraeni (Partnerships Manager, UN Global Pulse)
With editorial support from Dwayne Carruthers (Public Advocacy Manager, UN Global Pulse)
Pulse Lab Jakarta is grateful for the generous support from the Government of Australia
