Factors Hindering Micro Enterprise Growth in Jakarta

An Empirical Analysis

Abstract

Micro enterprises account for 107.37 million or 89.04 percent of the total employment in Indonesia. These businesses have become the primary engines of economic growth of the country. Despite for its being a dominant form of business organization, many micro enterprises face obstacles that hinder their growth and development.  This article provides an analysis and a depiction on factors that can limit micro enterprises business development and offers insight for the entrepreneurs to find strategies to tackle the problems. The research focused on four hindering factors, they were lack of entrepreneurial mindset, lack of access to finance, lack of business management experience, and lack of government support. The analysis was based on a field survey of 150 micro enterprises in Jakarta. Various statistical analyzes were used in this study, namely multiple linear regression analysis and correlation analysis. The findings show that lack of business management experience was the factor hindering the growth of micro enterprises in Jakarta. This was due to the fact that most of these entrepreneurs have low education, knowledge and skills in business management such as accounting, financial planning, and marketing skills. Therefore, the study suggests the entrepreneurs to be equipped with appropriate training to enhance their business management skills. It is also important for the government to support the micro enterprises through effective training programs and policies that are beneficial to their growth. This research might not be applicable to micro enterprises in other regions in Indonesia and might prove differently in other populations. Therefore, the study is in need of further rigorous research and development with larger samples.