Jakarta. Technology giant Grab Indonesia has recently launched a tech center to help the government accelerate digitalization of micro, small and medium enterprises, or MSMEs.

The Indonesian economy lives off the MSMEs who contribute 60 percent to the country’s GDP. Digitizing MSMEs would be Indonesia’s golden ticket towards economic recovery from the Covid-19 pandemic. Digitalization also enables food businesses and mom-and-pop stores to reach out their customers that are now mostly isolating at their homes. 

Based on Cooperatives and MSMEs Ministry data, out of more than 64 million MSMEs, only 16 percent of them have connected to the digital realm. The government has rolled out several initiatives, including launching a self-training portal for MSMEs to get a hold of technology. But closing the large digital gap would require an extra push not just from the government, but also the private sector.

To this end, Grab has launched several digital initiatives with the most recent one being a tech center at Gama Tower in South Jakarta. The center acts as a regional innovation hub where Grab’s research and development (R&D) teams will work on solutions for MSMEs.

“Indonesia’s economic recovery will depend on our MSMEs. If we can boost their resilience through digitalization, we can help prevent more job losses and put the economy in a stronger position to recover,” Grab Indonesia managing director Neneng Goenadi said in an official statement.

According to Neneng, many business-to-business (B2B) tech solutions in the market are designed for larger enterprises. These leave out the MSMEs who lack the budget, time, or knowledge to use the products.

“Our tech center in Jakarta is dedicated to MSMEs. It also builds on our commitment to developing Indonesian talent. We will bring together and cultivate some of the best tech talent in Indonesia to build easy-to-use and reliable solutions that can help even the smallest MSME in their digitalisation journey,” she said.

Among these MSME solutions include the merchant self-onboarding tool which allows MSMEs to run the platform in just 24 hours. Many merchants found this useful especially those who were rushing to go online when the pandemic dawned. Between May and September, over 70,000 merchants in Indonesia joined Grab through self-onboarding.

In June, Grab introduced the #TerusUsaha campaign to encourage MSMEs to keep holding on and build resilience through digitalization. The decacorn also offered training for MSMEs to help them bolster their online presence. And throughout the pandemic, Grab has digitized around 500,000 MSMEs.

Coordinating Minister for Economic Affairs Airlangga Hartarto applauds Grab for their digital initiatives.

“Grab has been a strategic partner to the government on this front, consistently helping drive the digital transformation agenda through programs like #TerusUsaha. Equipping MSMEs with the right tools and technology to navigate the online shift is important. I commend Grab’s decision to set up a tech center that is dedicated to their needs,” Airlangga said.

Rizal E. Halim, economy expert from the University of Indonesia, said Grab’s commitment gives off positive signals to Indonesia’s investment climate amid the pandemic. Indonesia being chosen for Grab’s dual headquarter and tech center is something worthy of appreciation because of the decacorn’s long-term commitment and seriousness to strengthen the market in Asia and Indonesia.

“In today’s technology era, a headquarter is not simply a large building, but it serves as [a place] dedicated for resources and decision-making. This is important because we have seen the government persuading several IT companies to open an office in Indonesia, Rizal said.

Grab’s presence in Indonesia will help the company to become more responsive to the local dynamics. It will also help double their contribution to the economy, he said.

According to IT expert Heru Sutadi, the tech center helps propel Indonesia’s digital economy expansion. Innovation is important in digital economy advancement. But this requires a tool that can bolster and make use of that innovation.

“Digital economy advancement is also achieved if the people also become part of it as the subject, not only as an object or user. By driving these MSMEs, they will play a more beneficial role. [This is done] not just by turning the people into the market, but as the digital economy actors,” Heru said.