Listen and Design: On Micro, Small and Medium Enterprises

This open access book thoroughly investigates the domain of policy design tailored specifically for micro, small, and medium enterprises (MSMEs) with a central emphasis on harmonizing these policies with the preexisting social capital inherent to these enterprises, consistent with the mandate of Bank Indonesia to guard price stability and to promote financial stability, inclusive, and sustainable growth. The study, grounded in the context of Indonesia, underscores the paramount importance of a systematic approach, necessitating social planners and stakeholders to engage in a preliminary phase of active listening, empathetic understanding, and comprehensive knowledge of the diverse mental frameworks prevalent among MSMEs across the nation before embarking on the formulation of bespoke interventions. Readers of this scholarly work can anticipate gaining insightful perspectives into the nuanced policy preferences of both MSMEs and government officials. The methodologies employed, including the Analytic Hierarchy Process and Analytic Network Process, are not only presented but also subjected to rigorous feasibility assessments using the Mechanism Design Theory. Furthermore, the book delves into the intricate challenges faced by MSMEs, including addressing the financing gap and adapting to the digitalization landscape that considers the prevailing social capital, both of which significantly influence their overall productivity. Ultimately, the study underscores the pivotal role played by networks, rather than mere size and the usual suspects (financing, technology, and management), as the linchpin of social capital that profoundly shapes the performance of MSMEs within a specific socio-economic context.

Iwan J Azis is a professor of Emerging Markets within the Dyson School of Applied Economics and Management and was the director of Graduate Studies, Regional Science program (2005–2010) at Cornell University. He is also a professor of the University of Indonesia, and is currently serving as a research scholar at Bank Indonesia Institute. He consulted several governments and organizations in Asia and was visiting professor in Japan, Australia, Singapore, and Indonesia, and a Founder of a Foundation that supports networking among micro and small enterprises in the Global South. He headed the Office of Regional Economic Integration at the ADB, during which he became the interim chair of the Board of Directors of the Trust Fund-Credit Guarantee Investment Facility (CGIF) and a member of the International Policy Advisory Group. He is currently a research adviser to the Indonesian Central Bank and a member of International Advisory Panel of the Asian Infrastructure Investment Bank (AIIB).