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Small business use of the internet in indonesia: findings from secondary and primary data

Author: 
Tulus Tambunan
Subject Area: 
Social Sciences and Humanities
Abstract: 

This paper is based on a study which aims to explore the use of the Internet by micro and small enterprises (MSEs) in Indonesia. More specifically, it addresses the following four research questions. First, how many MSEs in Indonesia use the Internet for their businesses? Second, does the intensity of Internet usage by MSEs vary by business, region, age and education of the owners? Third, is the profit or income earned by MSEs that use the Internet greater than that earned by MSEs that do not use it? Fourth, what are the main reasons of MSEs that do not use ICT? As an exploratory investigation, it adopts a descriptive analysis. It analyses secondary data obtained from official government publications and primary data collected from interviews with randomly selected 482 owners of MSEs in various cities and types of businesses. services. The interviews took place in 2018. The study results show that as many as 563 thousand MSEs, or only about 2.14 per cent of total MSEs in Indonesia, have utilized the internet media; although it varies by province and type of business. From the analysis of primary data, it reveals three important findings. First, manufacturing industry is the type of business with the most Internet usage. Second, young and high educated respondents use the Internet more than older and low educated respondents. Third, about 36.9 % of the sample do not use the Internet for various reasons such as (i) no need, (ii) lack of knowledge about the internet, and (iii) lack of capital. The novelty of this research is that it is the only extensive research in Indonesia on MSMEs use of the internet with secondary and primary data.

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