The Challenge Of Sustainable Initiatives To The Growth Of Small And Medium-Sized Enterprises In Indonesia

Abstract

Indonesia knowingly has huge potential to pursue national economic growth through its SMEs which are recognized as the largest in Southeast Asia. Regardless of the impacts on local employment and GDP enhancement, the proliferated SMEs in Indonesia certainly contribute to the nation's or even the world’s pollution and waste accumulation. The government's initiative related to this issue was previously poured through the Low Carbon Development Initiative (LCDI) in 2017 and Rencana Pembangunan Jangka Menengah Nasional (RPJMN) 2020-2024 in 2020. However, these kinds of sustainability initiatives are certainly not only the government task alone but also the task of the private sector in Indonesia such as SMEs. This research is taking five samples of Indonesian SMEs through the structured interview method in collecting the data and coding approach in analyzing the data according to the attributes from SMEs Growth Determinants and Sustainable Business Model (SBM). This research finds that environmentally friendly initiatives are considered more challenging than supporting social inclusivity in SMEs. Interestingly, the most influential factors of all SMEs to support the sustainability initiatives are sourced from the internal factors of SMEs toward their responsibility to the environment and society.

Keywords: Indonesia, SMEs, sustainability challenges, sustainability factors