Minister of Investment and Downstreaming concurrently serving as the Chief Executive Officer of Daya Anagata Nusantara (Danantara), Rosan Roeslani, has articulated a bold and unconventional perspective regarding the future of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia. Speaking at the 2026 National Leadership Meeting (Rapimnas) of the Indonesian Chamber of Commerce and Industry (Kadin) in Jakarta, Rosan stated that his ultimate goal is to see a numerical reduction in the country’s MSME sector—not as a sign of economic contraction, but as a direct indicator of successful upward mobility and business graduation.
The statement, delivered on Thursday, October 29, immediately drew attention from business leaders, policymakers, and economic analysts alike. By challenging the traditional narrative that equates a perpetually massive volume of micro-enterprises with baseline economic strength, Rosan’s remarks have sparked a broader national conversation on structural transformation, industrial scaling, and the true effectiveness of state and private sector support mechanisms for grassroots businesses.
Challenging the Status Quo of Micro-Enterprise Metrics
For decades, government reports and economic assessments in Indonesia have heavily highlighted the sheer volume of MSMEs—traditionally cited as numbering around 60 million and accounting for roughly 61 percent of the national Gross Domestic Product (GDP), while absorbing over 90 percent of the domestic workforce. However, Minister Rosan argued that celebrating these static volume metrics without a corresponding upward transition is counterproductive to long-term national development.
"If I may say so, I actually want the number of MSMEs in Indonesia to decrease and become smaller," Rosan remarked during his keynote address at the Kadin Rapimnas. "Because if they remain MSMEs forever, when will they ever graduate to the next level?"
Rosan emphasized that true economic progress should be measured by the rate at which micro and small businesses transform into medium-sized enterprises, and subsequently into large-scale commercial corporations. He questioned the stagnation of structural scaling, noting the absurdity of maintaining the exact same volume of micro-businesses year after year.
"That is why I am not proud if our MSMEs stand at 60 million this year, and then another 60 million next year. When do they graduate? If possible, we should have 60 million this year, 50 million next year, and 40 million the year after that. Why? Because they have graduated to become small businesses, scaled up to medium enterprises, and ultimately evolved into large-scale entrepreneurs," he elaborated.
This perspective shifts the focal point of state policy from mere business sustenance—keeping afloat millions of subsistence-level operations—to active capacity building, structured incubation, regulatory facilitation, and financial integration that fosters genuine commercial growth.
The Strategic Role of Kadin in Grassroots Empowerment
Addressing the gathered members of the Indonesian Chamber of Commerce and Industry, Rosan underscored that large corporations and established business associations bear a moral and structural obligation to pull smaller enterprises upward. He asserted that supporting local grassroots businesses is not merely an act of corporate social responsibility, but a core prerequisite for robust, inclusive national economic resilience.
"Indeed, my colleagues in Kadin who are already large and established, who are present here, have a mandatory duty to assist MSMEs," Rosan stated firmly.
He pointed out that Kadin occupies a uniquely strategic position within the national economic ecosystem. With networks spanning from the capital down to remote regencies, municipalities, and provinces, the organization acts as a critical bridge linking small-scale local producers with broader supply chains, institutional financing, and regional economic opportunities. Rosan expressed optimism that active mentorship from established conglomerates would catalyze sustainable economic growth at the grassroots level, thereby strengthening local purchasing power and reducing regional economic disparities.
The call to action aligns closely with Kadin’s broader developmental mandate, which seeks to integrate regional businesses into national and international trade corridors. By leveraging the mentorship, technological expertise, and market access of major corporations, smaller enterprises stand a significantly higher chance of overcoming the traditional barriers that trap them in the micro-enterprise tier.
Concrete Commitments: Financial Partnerships and Realized Synergy
Moving beyond rhetoric, the Ministry of Investment and Downstreaming has begun translating these strategic visions into concrete administrative initiatives. During the same forum, Rosan highlighted a major programmatic rollout involving direct partnerships between government-backed initiatives and local businesses.
The Ministry has successfully forged strategic collaborations with approximately 1,000 MSMEs spread across various regions in Indonesia. The total economic value of these partnerships is estimated to reach Rp20 trillion. These initiatives are designed not just as financial injections, but as integrated operational tie-ins, helping local producers integrate into the supply chains of large industrial downstreaming projects and foreign direct investment (FDI) ventures.
Rosan noted that these partnerships are structured to deliver tangible impacts on local business capacity, operational standards, product quality, and administrative compliance. By plugging local enterprises directly into high-value industrial ecosystems, the government aims to accelerate the maturation timeline of these businesses, moving them swiftly past the micro and small thresholds.
Investment Quality, Human Capital, and Macroeconomic Foundations
In addition to addressing structural mobility for small businesses, Rosan’s address at the Kadin Rapimnas touched upon the broader macroeconomic architecture of Indonesia, specifically highlighting the pivotal role of foreign and domestic investment.
Following domestic consumption—which has historically served as the primary engine of Indonesia’s GDP growth—investment stands as the second most critical pillar for sustainable economic expansion. However, Rosan stressed that the country must move past the era of chasing investment volume alone. Instead, the focus must shift entirely toward securing high-quality investments.
According to the Minister, quality investment is defined by its ability to achieve three core objectives:
- Enhancing human resource capabilities through intensive workforce training and professional development.
- Facilitating effective knowledge and technology transfer from multinational entities to domestic industries.
- Creating high-quality, stable employment opportunities that offer fair remuneration and career progression paths.
This holistic approach ensures that as downstreaming policies take root and foreign capital enters the market, local businesses and workers are not marginalized as low-skilled laborers, but are instead integrated as critical components of a modernized, high-tech industrial base.
Implications for Indonesia’s Economic Trajectory
Rosan Roeslani’s vision for a shrinking MSME sector carries profound implications for Indonesia’s ambition to escape the middle-income trap and achieve its Golden Indonesia 2045 vision.
For decades, the sheer proliferation of micro-enterprises has often masked underlying structural vulnerabilities, such as low productivity, informal operating structures, limited access to formal banking credit, and heavy reliance on manual labor with minimal technological integration. Many Indonesian micro-enterprises operate out of sheer necessity—subsistence entrepreneurship—rather than high-growth entrepreneurial ambition.
By advocating for a deliberate reduction in the count of MSMEs through upward graduation, the Ministry of Investment is effectively calling for a paradigm shift in industrial policy. The success of this strategy, however, will hinge on the execution of several interdependent policy measures:
- Regulatory Simplification: Reducing red tape, streamlining business licensing, and lowering the cost of formalization so that micro-enterprises find genuine commercial advantages in scaling up.
- Access to Capital: Bridging the persistent financing gap through innovative fintech solutions, venture capital, and commercial banking products tailored for small business expansion rather than just micro-loans.
- Technology Adoption: Accelerating digital transformation across regional business hubs to ensure local enterprises can compete in modern e-commerce and B2B supply chains.
- Supply Chain Integration: Enforcing and expanding partnerships where large corporations—both state-owned enterprises and private conglomerates—are mandated or incentivized to source components and services from domestic small and medium businesses.
As the government continues to roll out its downstreaming agenda and foster strategic alliances between large industrial players and regional businesses, the metric of success will no longer be how many millions of micro-enterprises exist on paper. Rather, the ultimate test will be how effectively those businesses shed their micro status to become the robust, competitive medium and large enterprises driving Indonesia’s future economic prosperity.
