By: Sulis Usdoko
Throughout its journey, many institutions have made various efforts to improve the competitiveness of small, medium, and micro enterprises (SMEs). Despite the significant employment absorption of SMEs, their contribution to the Gross Domestic Product (GDP) remains limited. Therefore, a new breakthrough is needed. This breakthrough involves engaging SMEs in three aspects: rational thinking, emotional feeling, and motivation factor, and combining them by placing SMEs as subjects, not objects.
The next pillar in empowering SMEs is emotional feeling, which involves aligning with local customs and habits. Naturally, people, including SMEs, are more receptive to guests who respect and follow local traditions and etiquette.
This approach was confirmed in PT Jamkrindo's areas of empowerment. In Ciletuh Palabuhanratu UNESCO Global Geopark (CPUGGp/Geopark Ciletuh), we entered without offering or promising anything at all. In fact, we engaged in empowering SMEs through an unconventional route—by promoting anti-plastic waste campaigns, which, on the surface, appeared unrelated to SME empowerment. However, this approach proved to be powerful because it addressed the core issues faced by the Geopark Ciletuh area, such as the need to improve the ecosystem, manage plastic waste, and boost the local economy.
We also combined the second pillar, emotional feeling, by engaging trusted community and government leaders. The local culture of respecting these figures opened doors for joint empowerment strategies. Furthermore, the Sukabumi Regency Government showed a strong commitment to driving the economy in the Geopark Ciletuh area. In Sukabumi, PT Jamkrindo first implemented empowerment through a memorandum of understanding with the local government.
The approach through religious leaders also proved powerful in Larantuka, where empowerment strategies were co-formulated with religious leaders and their followers. Similarly, in Kintamani, Bali, strategies were developed with local community leaders and coffee farmers to find solutions for Bali's coffee cultivation.
The third pillar of involving SMEs in empowerment is the motivation factor—embedding motivational elements into every activity. In Ciletuh, this was implemented with the idea that if the Geopark area is free from plastic waste, more tourists will visit. The resulting increase in tourism directly impacts the local economy, such as higher homestay occupancy, increased culinary businesses, and new job opportunities, such as tour guides.
In Larantuka, this motivational factor helped boost the confidence of business owners, showing them that they could escape poverty or the clutches of loan sharks through their own efforts, not by relying on others. Educating them that sending children to higher education, once a distant dream, had now become a reality, while their main commodity—cashew nuts—had been cultivated for generations.
Similarly, in Bali, coffee farmers, who previously sold beans to middlemen at low prices, gradually saw the selling price of their coffee rise. When they were shown that foreign coffee beans could sell for up to Rp1 million per kilogram, they believed that someday, Bali’s coffee beans could fetch the same price.
In addition to the three pillars of SME involvement in empowerment strategies, we also apply the K3 concept: commitment, capacity, and consistency. This K3 concept is similar to constructing a house. Commitment serves as the foundation, capacity is the pillars and walls, and consistency is the roof that protects the structure and its occupants.
In SME empowerment, the structure of the house analogy applies almost identically. The foundation and first aspect we address is the commitment of SMEs to progress. Without this commitment, strategies and explanations would likely remain empty words, as the subject lacks the foundation to build a stronger structure upon.
We were fortunate to receive strong commitments in all three empowerment locations. In Sukabumi, we greatly appreciate the Sukabumi Regency Government’s commitment to seriously implementing the empowerment program. After establishing a strong commitment foundation, it becomes easier to build the capacity structure on top of it. Capacity building can take many forms, such as training, sharing experiences, and improving the quality of products produced by SMEs.
However, these two foundational elements—the commitment and capacity—must be complemented by the roof, which, in philosophical terms, is implemented as consistency in executing the program. Of the three components in the K3 concept, consistency is the most challenging, as it requires endurance throughout the process. Without consistency, it is almost certain that all plans and strategies will fail.
Critical periods always leave valuable lessons to strengthen structures in the next period. SME empowerment and the critical period caused by COVID-19 have shown us that we need to foster the growth of local leaders. PT Jamkrindo’s empowerment activities in Larantuka were successful because of the consistency of religious leaders in supporting cashew farmers. Likewise, the anti-plastic waste campaign in Geopark Ciletuh, which has now diversified its activities into empowering the Homestay Association and food processing sectors by former migrant workers, also succeeded due to the involvement of community leaders who acted without self-interest. The only interest of these local leaders is to create a strong foundation for the local economy.
It is not an exaggeration to say that the Governor of West Java, Ridwan Kamil, has positively welcomed and praised the reduction in the number of Indonesian migrant workers abroad, as economic activities in the Geopark Ciletuh area have increased. The role of local leaders is crucial in maintaining the rhythm of the economy, which is slowly recovering in the aftermath of the COVID-19 pandemic.
From the development of the national economy based on SMEs, we can also see many added values. Socially, the activities of SMEs always give hope to their actors for a better life and gradual upward mobility. A real example comes from the cashew farmers in Larantuka, who once lived in poverty. Similarly, migrant workers from Geopark Ciletuh, who spent years away from their families working abroad, as well as coffee farmers in Kintamani, who had always sold their coffee beans cheaply, are now seeing their livelihoods improve.
SME economic activities, regardless of their scale, contribute to reducing income inequality, which remains a thorn in our economy. Without realizing it, SMEs also serve as a laboratory of innovation for the younger generation. Since the government strengthened the village economy, the younger generation has become the engine of local economies through creative enterprises and maximizing the potential of regions that were previously untapped. The creative processes of SME actors in various areas have successfully nurtured and developed SME ecosystems, especially to meet both demand and supply.
The author is an Entrepreneurship Enthusiast, SME Expert, and Director of PT Jamkrindo.