Innovation for MSME Development Initiative

Micro, small, and medium enterprises (MSMEs) hold large potential in driving Indonesia's economic growth due to their large numbers, ability to absorb the workforce, and opportunities for employment for women. Recognizing the contribution of MSMEs, the Government of Indonesia outlined several targets for MSME growth, such as increasing the production of value-added goods, and MSMEs' export contribution. Aligned with these targets, the government, non-governmental organizations (NGOs), the private sector, and development organizations have implemented programs targeted to MSMEs, such as digital onboarding and training, consulting services, and logistic aggregator services. 

However, despite the large number of programs, there is still limited evidence on how recent innovations, such as the digital onboarding of MSMEs, machine learning, digital loans, and logistics services geared toward MSMEs, influence their business outcomes. To address this gap, J-PAL Southeast Asia (SEA), with the generous support of the Millennium Corporation Challenge, and guidance from the Ministry of National Development Planning (Bappenas), established IMDI, to support policymakers and stakeholders working to solve the challenges MSMEs face through:

1. Developing new rigorous research: IMDI aims to expand the base of rigorous evidence on strategies to grow MSMEs. The team seeks to answer high-priority questions that can inform policy and program recommendations to policymakers and program implementers. 
2. Synthesizing available evidence and producing policy insights: The IMDI team actively monitors new and existing MSME programs and maps them to our pool of evidence. The goal is to generate timely insights for policymakers, researchers, and practitioners, and to identify priority areas for future research. 
3. Strengthening the network of MSME stakeholders: The goal of the IMDI team is to also inspire collaborations between policymakers, program implementers, and researchers in the MSME sector to share knowledge and design future evidence-based policies. The team achieves this by hosting a learning collaborative, a policy discussion where key stakeholders in the MSME sector gather to explore challenges and innovative solutions for MSME growth in Indonesia.