Economic Transformation Via the Job Creation Law in the Era of President Jokowi Accelerates MSME Business

By: Hendry Hermawan*
Indonesia’s economic transformation during the era of President Joko Widodo (Jokowi) has shown significant progress through various policies implemented to encourage the growth of the business sector, including Micro, Small and Medium Enterprises (MSMEs). One of the most influential policy instruments is the Job Creation Law (UU Ciptaker) Number 11 of 2020. This law, together with all its derivative regulations, provides a legal umbrella that facilitates ease of doing business and encourages national economic growth. Through various innovations and integrated structural reforms, the Job Creation Law has become a catalyst in accelerating MSME businesses in Indonesia.
Since the enactment of this law, there have been major changes in the business licensing system, which is now risk-based. This approach is a breakthrough in simplifying the licensing process, reducing bureaucracy which was previously considered complicated and time consuming. Secretary of the Task Force for Accelerating Socialization of the Job Creation Law, Arif Budimanta, explained that this law provides convenience and protection for the business world, especially MSMEs. With a risk-based licensing system, business actors can more easily apply for permits, especially for those operating in low-risk sectors. This approach not only saves time but also provides legal certainty for business actors.
The important role of the Job Creation Law in encouraging economic growth is clearly visible in accelerating the process of issuing business permits. Before this law, the licensing process could take months. Now, with the reforms being introduced, basic permits such as Suitability for Space Utilization Activities (KKPR), which is one of the main stages in the licensing process, can be issued within 20 working days. According to the Director of Synchronization of Space Utilization at the Ministry of Agrarian Affairs and Spatial Planning (ATR)/National Land Agency (BPN), Rahma Julianti, this acceleration is clear evidence that the government is committed to creating a business environment that is friendlier to business people.
However, the successful implementation of the Job Creation Law does not only depend on reforms at the central level. Cooperation between the central government, regional governments and permit applicants is very necessary to ensure the integration of the permit system runs smoothly. One of the important innovations that has been introduced is Online Single Submission? Risk Based Approach (OSS-RBA), a digital-based licensing system that allows applicants to submit applications online. Arif Budimanta emphasized that this system is designed to increase efficiency and make it easier for business actors, especially MSMEs, to access permits.
Apart from providing convenience in licensing, the Job Creation Law also plays a role in encouraging MSMEs to adapt more to developments in digital technology. Challenges in the 6.0 era, especially those related to business digitalization, are of particular concern to the government. Secretary General of the Indonesian MSME Association (Akumindo), Edy Misero, emphasized that MSME players must be ready to adopt digital technology in order to compete and survive in this increasingly modern era. He emphasized that the presence of the Job Creation Law is a golden opportunity for MSMEs to accelerate, but the readiness of business actors to utilize technology is also very important.
Apart from that, Edy also hopes that the implementation of the Job Creation Law will encourage the acceleration of all business activities, including MSMEs, so that it can have a significant impact on national economic growth. He believes that if business actors and the government work in accordance with the provisions that have been set, Indonesia can achieve its vision as a country with a strong economy by 2045.
Even though reforms have been carried out, there are still challenges faced in implementing the Job Creation Law, especially in the human resource and technical aspects of implementation. The government has prepared an accelerated strategy to overcome this problem, including improving the quality of human resources and building a more integrated national data center.
Economic transformation through the Job Creation Law not only includes ease of doing business, but also encourages inclusiveness and empowerment of business actors throughout Indonesia. The government continues to strive to ensure that these structural reforms can be felt by all levels of society, including MSMEs which have been the backbone of the national economy. In this case, the Task Force for Accelerating Socialization of the Job Creation Law regularly holds focus group discussions (FGD) to create a critical forum that involves the community in providing solution suggestions for improving the implementation of this law.
Through the various efforts that have been made, it is hoped that the Job Creation Law will be able to have a real impact on accelerating national economic growth, especially in supporting MSMEs to innovate and compete in the digital era. Improving the quality of licensing services, integrating digital-based systems, and full support from central and regional governments are the main keys in creating a more dynamic and highly competitive business ecosystem.
Ultimately, the economic transformation driven by the Job Creation Law is part of a major effort towards a more advanced and prosperous Indonesia. The accelerated acceleration of MSME businesses through various reforms introduced by the Job Creation Law is clear evidence of the government’s commitment to creating an inclusive and sustainable business climate.
)* The author is an MSME actor