Economist: Government Support Needed for AI Adoption Readiness Among MSMEs

Economist Nailul Huda from the Center of Economics and Law Studies (Celios) has said that increasing the readiness to adopt artificial intelligence (AI) among industry players in the MSME sector requires government support through a literacy approach and affordable AI services. Huda stated that the application of AI for business operators can assist with tasks ranging from marketing to bookkeeping, minimising the potential for human error. “Ninety-five per cent of businesses in Indonesia are micro and super micro. By nature, they do not need AI in their business. However, for small and medium enterprises, AI can help their work,” he said in Jakarta on Monday. He noted that although AI can facilitate business activities for small and medium industries, its adoption is still relatively low. Some of the obstacles include low-quality human resources, especially outside Java, and internet access that is still limited to communication and searching for information, rather than utilising artificial intelligence technology. Furthermore, Huda highlighted that the price of AI services is still relatively expensive for most business operators. This price is a strong factor behind the low adoption of AI by small and medium enterprises. “With the relatively low selling price of goods, the high price of AI services is not relevant to them,” he said. He stated that a digital literacy approach is needed for small and medium business operators, especially to increase understanding of the benefits of AI from the government and digital service providers. According to him, collaboration is also needed between the government and service providers to provide understanding to small and medium business operators about AI technology in the business world. “The government can provide incentives for AI services targeting MSMEs, so that the price of services for MSMEs can be affordable. But not for large service providers, only for local providers that focus on improving MSME businesses,” he suggested. With such support, AI adoption among MSMEs is expected to increase gradually and have a real impact on productivity, competitiveness, and business growth.