Strategies and Policies on the Development of Small & Medium Enterprises in Taiwan and Its Application to Indonesia

Abstract

Indonesia and Taiwan have a similarity in their economic engine based on, which is Small and Medium Enterprises (SMEs). The majority of business unit in these two countries is done by SMEs, over 98% of the total of business unit. But, the empirical fact said that Indonesia is qualified as low middle income country (GDP/capita: USD 3,005) and Taiwan is qualified as high middle income country (GDP/capita: USD 17,000). Based on this fact, this research has found the reason behind of these circumstances. Why SMEs in Taiwan are more competitive than the SMEs in Indonesia. More deeply, this research has explored the strategy and policy adopted by Taiwanese government or successful factors from the beginning stage until today. Also, to solve the problem that faced by Indonesians SMEs, this research has found what was the obstacle that can be a blocker for Indonesians SMEs to become better. In order to overcome the obstacle, this research would introduce some government strategy and policy which has been successfully implemented in Taiwan during the development of their SMEs. Therefore, those strategy and policy would be recommended to Indonesian government in order to make Indonesians SMEs more competitive not only in domestic market but also global market as well, and will end up to a great contribution from Indonesians SMEs to lift up Indonesian economy as a one of the great economy in the world.