A STUDY OF THE BARRIERS AND SUPPORTING FACTORS OF THE EXPORT ACTIVITIES IN THE INDONESIAN SMALL AND MEDIUM ENTERPRISES (SMES)

• Main Author: Nur Inayah, Esti
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/63871
• Institution: Institut Teknologi Bandung

Small and medium-sized enterprises are the initial sector of many countries’ economies, producing about 50-80% of GDP. Historically, Indonesian SMEs have been major players in the domestic economy, accounting for more than 90% of all businesses in all sectors and providing employment occasions for more than 90% of the country's workforce, primarily women and young people in the productive age. Indonesian SMEs cannot take advantage of the export opportunities created by trade liberalization and poor performance compared to larger world SMEs. 90% of Indonesia's total exports come primarily from Java, Sumatra, and Kalimantan Zone. Export barriers can be defined as various obstacles that prevent a company from starting, maintaining, or developing its export activities. Export barriers include unreliability, inaccessibility, and high data costs associated with the target market. Lack of networks to be able to compete with other small business products and large companies. Lack of knowledge to deal with export activities. Lack of reliable and competent employees. Lack of money to raise working capital for internationalization. Difficult to meet overseas product standards. Bad sales performance. Difficulty reaching competitor prices in foreign markets. Economic factors. Limited technology for mass production. Restrictive certification and control of health, safety and technical standards in the host and home country. Raw Materials unavailability for mass Production. Exchange Rate and Currency. Export supporters can be defined as the factors which impact the company's decision to start, maintain or develop a country export business. Export supporters include Availability & accessibility of business in international networks for New Market Development, Local Export Cluster, and Agency Development for Product Innovation. Government support in Simplified domestic export procedure. Owners of small businesses with strong international knowledge. Support for the latest infrastructure, information technology knowledge and skills in transportation / export insurance. The international market provides companies with almost unlimited opportunities for market expansion and thus growth. International business activities can also have a positive impact on business efficiency through organizational and empirical learning, such as knowledge bases, skills, innovation and competitiveness. Governments need to fully understand the nature and seriousness of SME export barriers in order to develop effective strategies and measures to remove them. Government agencies need to actively seek feedback from SMEs and various participants in international networks to obtain accurate information on export barriers.