e-Commerce empowerment for SMEs Onno W. Purbo Independent IT Writer Indonesia

References Industry& Trade Cooperative & SME Post & Telecomm Statistical Bureau MASTEL APJII

Archive e-Discussion Asosiasi-warnet- Asosiasi-warnet-

Term of Reference Life-long learning and the training of information and communications technology professionals Skills retention strategies for trade administration agencies reliant on information and communications technology Collaboration with the business/private sector on skills development Development of skills required to assist APEC members to establish a more pro-competitive policy and regulatory environment Development of skills standards to support e- commerce

Overview

Current Indonesia Situation Population of 220 million people 90+ million labor force Only 3-4 million univ. grads IT penetration correlates to education level.

IT Infrastructure Condition 2.2 million PC 8 million lines (Telco’s “monopoly”). ~150 ISP (liberal / no monopoly) Telecommunication Kiosk Internet Café Access point for 60-70% Indonesian users lines for connecting schools. 1.5 million Internet user Double every year. Hope to reach 20 million by 2004.

Business Structure ~40 Million Enterprises >98% SMEs

Industry Structure (BPS-KOMPAS ) ScaleNo.FirmsNo.WorkerRp. Billion Large-Med22,9974,214,957264,270 Small241,1692,077,29814,858 Household2,501,7354,075,76311,312 Total2,765,90110,368,020290,440

Focus on e-Impact

Identified Major Issues Social & Cultural Aspects Highly related to level of education. National movement on IT literacy. Enable the SMEs for high impact Knowledge Preferably in local language. Human Resource Teachers. Infrastructure Telecomm & Internet Access. PC / Computers.

Basic Belief Mass of qualified Human Resource is the key of success. IT Retention can only be maintained if: Demand side - Enough carrots in marketplace for such IT knowledge. Supply side - Abundant & accessible IT knowledge available at low & no cost. Regulatory & policy framework – Make sure it can be implemented - self-finance & sustainable. Language & number of literature would be the major barrier.

Challenges Simple policy & tech for high impact. Small IT Mass (0.5% of population) Low density: Information access facilities. Computer / PC Telecommunication infrastructure. Slow Distribution of Knowledge.

Example of Real Life Experiences Wayan, Bali & Lombok Share design with European Distribution. Sells their craft & art over the Internet. Anshori, Lampung Butterfly cultivation sell it at US$7 / cocoon. Jerry, Bandung Textile export via B2B marketplace (mailing list).

Real Life Skill Needed for SMEs Ability to Read & Write in English. Limited knowledge of Internet & Web Knowledge of B2B Markerplace mailing lists on the Internet Access to Internet Café / Kiosk ~US$1 / hour (affordable for most people) ~US$5 / month ( only access).

Indonesian e-Environment

E-commerce Community Indonesia Internet Business Community – I2BC Indonesian SMEs network.

Indonesian Internet Activities National IT Movement Internet Café Association Education Community (vocational schools) (rural islamic schools) (private universities) (digital library network)

Create Mass & Demand

Focus Tactical Activities Focus on Mass Centers Schools ~ 18 million students Univ ~ 5 million students Need only ~ lines for schools. Internet & Telco Kiosk ~ 20-30M people Simple policy – high impact. Focus on simple EC mechanism Substitute Telp, FAX with / VoIP. Simple B2B community forum e.g. mailing list. Use conventional payment systems.

Focus Tactical Activities Build & Extend Regional Marketplace Aceh & North Sumatra with Singapore or Malaysia. North Sulawesi with Philippine. Maluku & Papua with the Pacific. Bali, Nusa Tenggara & Maluku with Australia If possible automate the transaction of their activities, e.g. using EDI.

Brief Infrastructure Strategies

Internet Infrastructure Liberalization of ISP ~150 license lines for educational sector 18 million potential internet users Require low cost internet appliance. Internet kiosk – self-finance Contribute 60-70% current users Require internet appliance / terminal. Corporate user – self-finance

Brief Knowledge Strategies

The Actor Small Medium Business & Industry. ~80 million workforce. 30+ million business entities million industries.

Capacity Building Multiplying Effect Education Sector – ~20 million people. Sustainable community-based telecenters. Development Consultants / NGOs.

Real Example of Knowledge Tactical Aspects Knowledge Management Digital Library One way knowledge dissemination Two ways interactions

Knowledge Management Manual Translation Public domain IT Knowledge in CD- ROM. Digital Library Indonesia Digital Library Network Indonesia Cyber Library Society –

Knowledge Generation Encourage writers to put & publish their work in public.

One Way Dissemination ~20 dedicated IT magazines nationally. Reaches couple 100 th thousands people. IT column in most newspapers. Reaches millions people. Public Domain Knowledge on Free CD-ROM. >100 title IT books in Indonesian Need more dedicated IT writers. MoST – Technology Kiosk.

Two Way Interactions Egroups.com mailing lists. Seminar / Workshop Millenium Internet Roadshow – 15 cities 2-6 Internet Seminars / Week in various cities. Min. 2x / week – Internet Radio Talkshow Training for trainers / IT evangelists.

Summary Focus on SME Educational Sector as strategic entry. Proposed Major Strategies: Knowledge generation in local language Incentive for IT writer. Training for trainers / IT evangelists. Create knowledge infrastructure Adopt simple e-commerce mechanisms. Focus on maximizing economical impact.

Thank you