Analyst says digital literacy is key to MSME transformation in the AI era

Jakarta (ANTARA) - Senior Analyst from the Indonesia Strategic and Economics Action Institution (ISEAI) Ronny P Sasmita stated that expanding digital literacy among micro, small, and medium enterprises (MSMEs) is a key driver for the digital economic transformation of MSMEs amidst the era of artificial intelligence (AI) utilisation.

“In the next five years, AI has the potential to be a game changer for the transformation of Indonesian MSMEs, but with a major caveat. If adoption is successful, AI can increase productivity, efficiency, and competitiveness, which in turn contributes to national economic growth,” Ronny told ANTARA in Jakarta on Tuesday.

He assessed that AI holds significant potential to boost MSME productivity. The technology can help business actors automate financial record-keeping, manage inventory, and predict market demand more accurately. In marketing, AI can analyse consumer behaviour, enabling more targeted promotions. Meanwhile, in customer service, AI-based chatbots can improve response speed without increasing labour costs.

However, the low level of digital literacy among business actors remains a major challenge hindering technology adoption. He noted that most MSMEs in Indonesia are still at a basic stage of digitalisation, such as using social media and marketplaces for marketing, so AI implementation is still considered too complex and far removed from daily needs.

Ronny also highlighted that MSMEs face obstacles such as limited human resources, restricted access to technology, implementation costs, and a lack of understanding of the business value that AI can generate. He added that only a few sectors, generally those already connected to the digital ecosystem, are ready to utilise AI. Conversely, sectors such as traditional agriculture, small-scale manufacturing, or offline-based businesses still require intensive assistance as they are not yet fully digitalised.

“The digital literacy needed is not just the technical ability to use applications, but a deeper, business-driven digital literacy. MSMEs need to understand how AI can improve efficiency, reduce costs, or increase sales,” he said.

Ronny emphasised the need for collaboration, with the government providing regulations, incentives, and supporting infrastructure to accelerate this transformation. Meanwhile, digital platforms are expected to offer AI services that are easier to use and more affordable for MSMEs, while the private sector can contribute through training, incubation, and access to financing. Without improved digital literacy and equitable access to technology, the use of AI could potentially widen the gap between MSMEs that are ready to transform and those that are left behind in the digitalisation process.