Indonesia receives a grant of 5.5 million US dollars from South Korea to enhance the capacity of small and medium-sized enterprises


Jakarta, – The Indonesian government has received a grant worth $5.5 million in the form of a smart factory adoption cooperation and human resource training from South Korea to improve the capacity of small and medium-sized enterprises (SMEs).

Hanung Harimba Rachman, the Deputy for Small and Medium Enterprises (SMEs) at the Ministry of Cooperatives and SMEs, said that the Official Development Assistance Project (ODA) cooperation between the Indonesian and South Korean governments is expected to help local SMEs adopt the Industry 4.0 ecosystem, enabling them to enter the industrial supply chain.

“This is a collaborative step to help SMEs enter the Industry 4.0 ecosystem, implement smart factories, IoT technology, and AI, so they can enter the manufacturing industry supply chain. This is an important step, especially since Korea excels in the manufacturing industry. We hope it will benefit SMEs as much as possible,” he said after signing the MoU between the Ministry of Cooperatives and SMEs and the INNOBIZ Association of Korea on the ODA Project in Jakarta on Tuesday.

The South Korean government initiated cooperation with the Indonesian government to support the development of SMEs through the ODA Project: Project for Supporting the Transformation into Smart Factory and Training Specialized Manpower in Java Province for Innovation in Indonesian Manufacturing Industry.

Under the project, there will be 30 SMEs recommended by the Ministry of Cooperatives and SMEs to receive smart factory adoption training, which will be built at a university. Not only that but there will also be training for 100 experts related to the operation of smart factories in the four-year cooperation.

The targeted SMEs that can participate in the program include those from the automotive, manufacturing, food and beverage, textile, electronics, chemical, and agriculture sectors.

Meanwhile, the Policy Head of the INNOBIZ Institute, Se-jong Kim, explained that a smart factory service center will be built at a university to cooperate on training curricula.

“We have already built 30,000 smart factories in Korea. We will invite them to Indonesia to share experiences, or vice versa, they can also see directly in Korea. We hope this program can improve the capacity of SMEs in Indonesia,” said Se-jong Kim.

Cooperation with INNOBIZ, which is a certification institution for SMEs in South Korea, is also expected to help the Indonesian government in developing schemes, research, and policies related to SME certification that are implementable and suitable for the business ecosystem in Indonesia.

The certification held by SME and entrepreneur actors is expected to become a capital for them to obtain various facilities, including accessing financing from banking institutions and other alternative financing sources based on credit scoring.

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