Govt to establish innovation agency to help SMEs

The Jakarta Post, Jakarta

The government will establish a national agency aimed at strengthening and improving the competitiveness of small and medium enterprises (SMEs) through better access to information and the development of innovative technology, an official said Wednesday.

The agency, to be called the small and medium enterprise innovation center (PI UMKM), would work together with academia and business associations to develop innovative technology especially designed to strengthen SMEs, said Edy Putra Irawadi, the deputy for industry and trade at the Office of the Coordinating Minister for the Economy, on Wednesday.

The agency, whose establishment will be based on a recent presidential instruction, will be launched early next year after six months of preparations, said Edy, who chairs the preparatory committee laying the groundwork for the agency's establishment.

The committee consists of representatives from 15 ministries, the Agency for the Assessment and Application of Technology (BPPT), the Central Statistics Agency, the Indonesian Institute of Sciences (LIPI), entrepreneurial associations and universities.

Edy said that the agency would furnish assistance and information to SMEs on technical matters, intellectual property rights and marketing, and help them forge links with various communities, such as the leather association in Yogyakarta, textile association in Bandung, West Java, and research centers in the universities.

Dharmawan, the deputy chief of technology policy assessment at the BPPT and a member of the team, said that "The agency will also offer incentives to inventors of innovative technology."

Eddy said that the preparatory committee had started its work in July and had been allocated around Rp 1.4 billion (US$150,000) to disseminate information on the plan and establish a relationship with SMEs, government agencies, private institutions and universities.

"I think our budget for next year will be more or less the same," he said.

SMEs made up 90 percent of the country's 48.9 million business enterprises in 2006. They accounted for 53 percent of the country's gross domestic product of Rp 3,338 trillion and employed 96 percent of the approximately 88 million workers in employment that year, according to data from the Cooperatives and SMEs Ministry. (ind)