THE CHALLENGE OF SUSTAINABLE INITIATIVES TO THE GROWTH OF SMALL AND MEDIUM-SIZED ENTERPRISES IN INDONESIA

• Main Author: Rajendra Sadu Wiryawan, Raden
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/67536
• Institution: Institut Teknologi Bandung

Indonesia as a country with the predicate of fourth largest population in the world and largest SMEs numbers in Southeast Asia truly has huge potential in delivering the country’s economic growth. Besides the benefit given to the national economy, the huge number of SMEs in Indonesia also has the potential risk to the environment, especially to their contribution to the world’s pollution and waste accumulation. The initiatives of the government related to this issue were previously discussed in 2017 related to the Low Carbon Development Initiative (LCDI) which aims to promote green economy initiatives on reducing carbon emissions production and enhancing social welfare in Indonesia. Three years afterwards, the Indonesian Government developed Rencana Pembangunan Jangka Menengah Nasional (RPJMN) 2020-2024 which is known as the first commitment of the government toward sustainability adoption in the national development plan. The implementation of these kinds of sustainability initiatives is certainly not only the government task alone but also the task of the private sector in Indonesia such as SMEs which are considered high in number than large enterprises. In this research, there are five samples of Indonesian SMEs as a representation of the private sector in supporting sustainability initiatives. The data gathering method in this research is conducted through structured interviews with five representatives of each Indonesian SMEs sample. Then, the process of data analysis in this research used a coding approach which was based on the combination model between SMEs Growth Determinants and Sustainable Business Model (SBM) to determine the codes related to the potential challenges of SMEs to support the sustainability practices and find the key drivers of SMEs to adopt sustainable business conduct. The findings of this research show that environmentally friendly initiatives are considered more challenging than initiatives to support social inclusivity in their business. The most influential factors of all SMEs to support the sustainability initiatives are primarily sourced from the internal factors of SMEs which refers to the motivation, awareness, and initiative of the owner or manager of the SMEs toward the potential issues happening in the environment and society. In addition, SMEs also need support from the government due to the reality that most of the customers still lack awareness of sustainability practices and also the issue of capital procurement for SMEs, especially those who are considered social enterprises. Keywords: Indonesia, SMEs, sustainability challenges, influential factors of sustainability