The Urgency of MSME Development in Indonesia's Economic Growth

MSMEs play a crucial role in Indonesia’s economic growth. They are not only a source of income for households but also drivers of the people’s economy, providers of employment, and a means of community empowerment. In a growing economy, strengthening MSMEs is a strategic step toward economic equality and social welfare.

In Indonesia, MSMEs have proven capable of withstanding various economic crises, showing that a people-centric economy has substantial power to support national stability.

The development of MSMEs also aligns with the concept of community-based economic development, i.e., development born from the needs and potential of the community itself. In the perspective of socio-legal studies, law and policy should not be viewed merely as written rules, but must take into account social conditions and real needs evolving in the social environment.

Eugen Ehrlich argued that good law is living law, so economic policy must also adjust to the needs of small communities. (Simarmata, Rikardo. Socio Legal Studies and the Movement for Legal Reform)

MSME development cannot be separated from social and cultural approaches of society. Prof. Sulistyowati Irianto explains that public law and policy should be understood through a multidisciplinary approach (an approach to problem solving or research that involves various disciplines, where each field works independently to examine and analyse a topic from its specific viewpoint without merging their methods). Because social problems cannot be solved solely through a textual approach. (Irianto, Sulistyowati. Enriching Legal Studies with Socio Legal Research)

Therefore, empowerment of MSMEs requires education support, training, access to technology, and strengthening institutions so that communities can develop independently, thereby creating a comfortable and prosperous environment as the economy grows more evenly.

One concrete example is the community-based MSME development activities in Medang Village, Pagedangan District, Tangerang Regency, Banten Province. There I observed that the programme structures community empowerment through training, mentoring, and strengthening the local economy.

In the activity report for MSMEs in Medang Village, the organisation’s vision is described as building a community aware of the potential of culinary and creative destination, thereby boosting the economy through the revival of culinary MSMEs. The MSMEs continue to operate in line with the organisation’s vision even though village leadership has changed several times (three leadership changes during my study).

However, Medang Village MSMEs continue to run various training programmes such as digital economy training, MSME financial management, halal certification assistance, business development, and digital product promotion. There is also mentoring for halal certification and the issuing of a Business Identification Number (NIB).

This demonstrates the adoption of Islamic economy values, particularly in product halal status, business honesty, and fair community economic empowerment. From my perspective, programmes like these are precisely ‘from the community, for the community’ and should be supported by the government. (MSME Activity Report for Medang Village)

The concept of Shariah in MSME development is important because a Shariah economy is not solely profit-driven but also about blessings, social justice, and shared prosperity. This kind of system encourages business people to operate honestly, avoid interest, and consider humanitarian values and solidarity.

Empowerment models like in Medang Village can serve as a model for broader society because they not only improve residents’ economies but also build social solidarity and community creativity.

In the framework of critical legal studies, Roberto Mangabeira Unger explains that law and policy should be capable of creating social change and opening space for innovation. (Unger, Roberto Mangabeira. The Critical Legal Studies Movement: Another Time, A Greater Task)

This means the state should not merely make regulations, but also implement policies that genuinely support MSME growth through access to capital, training, protection of small enterprises, and digitalisation of the economy.

MSME development also has a major impact on reducing unemployment and poverty. When MSMEs grow, job opportunities increase and communities become more economically self-reliant. Moreover, MSMEs can strengthen regional economies by leveraging local potential in culinary, crafts, and services.

Thus, MSME development is a key step in strengthening Indonesia’s economic growth. Medang Village MSMEs exemplify community empowerment based on social and Syariah values that can inspire other regions.

Government, society, educational institutions, and the business world are all necessary for MSMEs to continue developing and become a strong, fair, and sustainable foundation of the national economy.