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Job Creation Law Strengthens Empowerment of Indonesian MSMEs


Global economic conditions are facing increasing challenges and risks of uncertainty. In order to maintain Indonesia’s strong economic growth amidst these global challenges, one of the reforms to strengthen economic foundations is the ratification of the Job Creation Law. The Job Creation Law is formally in accordance with the provisions in the 1945 Constitution.

The government, represented by the Coordinating Minister for the Economy, Airlangga Hartarto, emphasized the benefits of implementing the Job Creation Law, such as job loss guarantees, support for Micro, Small and Medium Enterprises (MSMEs), leave rights for workers, the existence of a land bank, a flood of investment and job opportunities, and the construction of community houses. low income (MBR).

Currently, MSMEs have enormous potential for Indonesia’s economic growth. Since the Job Creation Law was passed, the government has continued to strengthen MSMEs in the regions.

The Indonesian Minister of Cooperatives and Small and Medium Enterprises (UMKM), Teten Masduki, said that his party would achieve the target of 40 percent of government spending from MSME products and services in accordance with the mandate of the Job Creation Law.

In an effort to achieve this target, Teten Masduki emphasized the importance of collaboration and joint innovation as the key to prioritizing domestic products as well as regional commitment in implementing e-purchasing or e-cataloging.

Like the East Kalimantan region which also has many potential MSE sectors. Moreover, East Kalimantan is also the location of the Capital City of the Archipelago (IKN), which of course also encourages the need for quality products.

However, MSEs often encounter various challenges in developing their businesses. These challenges include capital, legality, marketing, HR competency, product quality and so on. The National Standardization Agency (BSN) encourages MSEs to improve the quality of their products to be able to move up a class, one of which is by implementing the Indonesian National Standards (SNI). 

Head of the BSN Public Relations, Cooperation and Information Services Bureau, Zul Amri, said that the government is very concerned about MSEs. Through the Job Creation Law, the government wants to make business easier, especially for MSEs. BSN plays a role in realizing this through the SNI development program for MSEs, namely fostering the application of SNI to MSEs who are committed to implementing standards.

Zul explained that when MSEs register their products via Online Single Submission (OSS) to get a Business Identification Number (NIB), MSEs can also get SNI Bina UMK if their product is a low-risk business. Next, a checklist of commitment to implementing SNI will appear. If they declare their commitment, the business actor must fill out a checklist related to fulfilling product quality in accordance with SNI. If so, UMK has the right to include the SNI Bina UMK logo on its products

In line with Zul, Head of the Department of Industry, Trade, Cooperatives, Small and Medium Enterprises of East Kalimantan Province, Heni Purwaningsih, said that with the implementation of MSE product standards it is hoped that there will be an increase in quality and competitiveness. By meeting the set standards, MSE products become more competitive in both local and international markets. It is hoped that more and more MSEs, especially in the East Kalimantan region, will be able to implement SNI.

Likewise, MSMEs in East Java need to be maximized so that they remain stable until 2024. Delivered by Doctoral Professor of Management & Entrepreneurship, Ciputra University, Prof. Dr. Murpin Josua Sembiring SE, M.Si that to strengthen MSMEs, the government needs to strengthen the Job Creation Law no. 11 of 2020 so that MSMEs in Indonesia become more advanced and can compete strongly on the global stage.

East Java is famous as a cooperative and MSME province. So according to him there is a need for cooperation with retailers established in the regions so they can collaborate and market MSME products.

The government’s attention to empowering MSMEs is very high, and always tries to make it easier for people to open micro and small businesses, one of which is by cutting down on complicated procedures and permits.

Director General of General Legal Administration of the Ministry of Law and Human Rights, Cahyo R. Muzhar, said that the government makes it easier for business actors to set up micro and small businesses through Individual Companies which are regulated in the Job Creation Law.

This policy is an implementation of the Job Creation Law, namely making it easier for people, especially micro and small businesses, to open new businesses, overlapping regulations and complicated procedures are cut, establishment is done simply by making a statement of establishment.

The government needs to invite all provincial governments to understand the benefits provided by the Job Creation Law for MSMEs so that the wider community is more confident in building their businesses so that they can advance the economy of their families and this country. Apart from that, Indonesia can become an independent country that can advance the country’s economy and its people so that it can compete globally. The Job Creation Law is expected to illustrate legal developments in Indonesia for the business world and bridge the information gap between policy makers and business actors.

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