Ministry of Home Affairs Pushes for Innovation in Public Services and Regional Economy
Jakarta (ANTARA) - The Ministry of Home Affairs (Kemendagri) has emphasised the importance of innovation in managing Regional-Owned Enterprises (BUMD) as a key to improving the quality of public services while boosting regional economic growth.
“BUMD must be able to balance public service functions and business functions. Innovation is the key to ensuring both can operate optimally and sustainably,” said Head of the National Policy Strategy Agency (BSKDN) Yusharto Huntoyungo in his statement in Jakarta on Monday.
He conveyed this while representing the Minister of Home Affairs (Mendagri) Muhammad Tito Karnavian at the Top BUMD Award 2026 event, themed “BUMD Innovation in Sustainable Development,” held in Jakarta.
Furthermore, Yusharto stated that BUMD play a strategic role as one of the local government’s instruments in providing services to the community, while also serving as a driver of the local economy.
In this regard, strengthening innovation is a crucial step for BUMD to adapt to changing dynamics and address the increasingly complex needs of the community.
According to him, the implementation of regional autonomy demands regional independence, including in public service aspects. In this context, BUMD are expected not only to focus on profits but also to provide tangible benefits to the community through the provision of quality goods and services.
Yusharto also noted that the management of BUMD has a strong legal foundation through Law No. 23 of 2014 on Regional Government and Government Regulation No. 54 of 2017 on BUMD.
These regulations comprehensively govern aspects from establishment, management, to coaching and supervision of BUMD based on good corporate governance principles.
With more than a thousand BUMD in Indonesia and total assets reaching trillions of rupiah, the role of BUMD is considered increasingly strategic in supporting regional development.
However, optimising this role requires support from various parties, including strengthening capital, enhancing human resource capacity, and synergies among stakeholders.
Kemendagri also highlighted several strategic issues that need attention in future BUMD management, including accelerating digitalisation, strengthening capital structures, improving governance quality, and developing innovations oriented towards community needs.
In addition, it is important for BUMD to determine their strategic position amid business competition, expand cooperation networks, and improve service quality to meet public expectations.
Synergies between local governments, BUMD, state-owned enterprises (BUMN), the private sector, and the community are also key factors in strengthening BUMD’s contribution to the regional economy.
In this regard, Kemendagri reminded of the importance of risk mitigation in BUMD management to maintain credibility and public trust.
This includes efforts to prevent practices that could cause harm, such as deviations in procurement of goods and services and non-transparent financial management.
“Local governments as owners and BUMD themselves need to map their business portfolios, which BUMD should be pushed faster, which as supporters, and which need to be maintained,” he explained.
The Top BUMD Award 2026 is expected not only to serve as recognition of BUMD performance but also as a momentum to strengthen collective commitment in driving more innovative, professional, and competitive BUMD transformation.
“I hope we can continue and enhance our collective commitment to restore BUMD’s function as the locomotive driving regional economic growth,” he concluded.