ACCELERATING DIGITAL TRANSFORMATION IN MSMES THROUGH EDUCATION
Yet, our education system has been built on the mindset of fear of failing examinations.
Author: Ari Margiono
Antara/Ari Bowo Sucipto
President Joko “Jokowi” Widodo’s East Asian tour last week brought home investment pledges and business deals worth at least US$13 billion (The Jakarta Post, July 29, 2022). In a meeting with South Korean CEOs, the President explained that Indonesia had conducted reforms in regulations and bureaucracy to open investment opportunities in strategic areas.
The call to the South Korean CEOs is aligned with the “three-pronged” strategy to boost Indonesia’s economy that was announced by the President back in August 2021. Three key aspects are the green economy, and digital and downstream strategies (the Post, Aug. 26, 2021).
The push to accelerate these strategies has been done in many key areas. Among them is the digital transformation of businesses. The government has developed a target to ensure that all 60 million micro, small and medium enterprises (MSMEs) are digitalized and participating in e-commerce platforms. Currently, only 20 percent are participating in the digital marketplace.
There have been many efforts to accelerate this process on the government’s part.
However, digitalizing MSMEs so that they can participate in e-commerce platforms is not sufficient. True digital transformation only happens when a business entity can create new digital value propositions for its users, not only just participating on platforms or simply shifting from a traditional to online market.
MSMEs should refrain from stopping short at the digitalization initiatives. Instead, they should move up the ladder as true digital MSMEs.
In fact, Indonesia will become competitive in the global market – as expected by the three-pronged strategy – only if we are able to unlock digital transformation up to this level. The big digital players from Indonesia, such as Tokopedia, Gojek, Traveloka and other household names, were able to seize the regional markets simply because they offered new digital value propositions to existing and untapped customer segments.
An example of true digital transformation in MSMEs would be to transform a traditional coffee seller in Papua and Aceh from just using e-commerce platforms to sell coffee beans to utilizing blockchain technology to ensure the authenticity in the chain of custody of the produced coffee beans.
Blockchain will benefit the farmers as well as the customers since they can authentically identify the origin and the freshness of the coffee beans.
There is so much homework to be done to help Indonesian MSMEs reach this dream level. Seeking high-level collaborations and investment pledges, as conducted by the President in the recent outing, is imperative. These countries and their large global companies can help facilitate new technology transfer, among other things, to Indonesia. Furthermore, appropriate policies and facilities need to be provided to ensure MSMEs can upgrade themselves.
However, one important sector that needs special attention is the education sector. This sector will supply human resources to the MSMEs through employment and entrepreneurship endeavors.
Thus, three critical digital mindsets need to be immersed in the education sector. First is the abolition of the fear of failure. This is important as digital entrepreneurs often need to embrace failure and quickly pivot to completely different new offerings. Many stories of successful digital entrepreneurs start with this painful phase.
Yet, our education system has been built on the mindset of fear of failing examinations. This needs to be transformed to allow students to learn through their failures and to pivot. Instead of grilling and drilling students to pass exams, course structures need to be developed in ways that students are allowed to fail and to pivot in a safe environment.
The second is the iterative mindset. Iterative processes are important in digital entrepreneurship. Education institutions need to help students familiarize themselves with iterative processes. This means students should be allowed to move back and forth in learning; education should help students understand that there is no instant and one-shot solution. Experimentation should be essential in learning processes.
The third is the mindset to promote a human-centered approach as opposed to product-centered development. Many MSMEs learn through copying and reverse-engineering successful products. While this often leads them to sellable products, digital entrepreneurship education should teach students to avoid being product-centered since this approach is often not sustainable.
A human-centered approach, i.e. designing digital products based on the needs of users and customers, is proven to be more sustainable.
This article was published in thejakartapost.com on August 5, 2022
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