Small Business or Startup?
    Category: Column By : Hermawan Kartajaya Read : 965 Date : Friday, September 09, 2016 - 00:16:53

    Small business or startup? Is the main theme of the fourth Asian SME Conference, to be held from September 13 to 17 in Jakarta. As the new president of Asian Council for Small Business (ACSB), elected in June, it is my duty to organize this event in Indonesia. Also in June, Indonesia Minister of Cooperatives and Small and Medium Enterprises Anak Agung Gede Ngurah Puspayoga, in the UN headquarters in New York, shared his coaching model for Indonesian Small and Midsized Enterprises (SMEs) in Indonesia.

    At the same event, Puspayoga also received the Presidential Award on Humane Entrepreneurship from the International Council for Small Business (ICSB), the parent organization of ACSB. Founded 61 years ago and based in Washington, the ICSB today has members from 80 countries and all its events are about how to develop small businesses, both SMEs and startups.

    Serving as a Special Adviser to the Minister for nearly two years, I have come to increasingly appreciate the difference between a SME and a startup. SMEs are more reliant on productivity, while startups need creativity. Financing is often considered the primary need for the SMEs, so they expand their production. On the other hand, startups need to identify the right markets and build differentiation.

    Globally, China has become such a big economy, because, ultimately, their SMEs can make products at a cheaper price. Meanwhile, in Silicon Valley, globally successful startups began with creative (ie, innovative) technology. So, whether China or Silicon Valley, what’s most important for SMEs and startups is entrepreneurial spirit!

    Here are three key points:

    (1) Entrepreneurship-Creativity-Productivity (ECP) is the main requirement for growing small businesses. ECP should be combined with Positioning-Differentiation-Branding (PDB) as the core marketing element.

    (2) Support for small businesses isn’t just financing but should also be for marketing and operations. Policy makers supporting small businesses should include the activities of NGOs, civil society and philantropists.

    (3) Ultimately, the small businesses themselves must develop their own management, leadership and innovation to sustain the business.

    Currently, Global Entrepreneurship Monitor (GEM), Healthiness of Business Ecosystems (HEBEX) and Humane Entrepreneurship are the three surveys used by the ICSB to monitor the development of small business in countries worldwide. It should be a thought-provoking contribution from Indonesia to Asia, and the world, on developing SMEs and startups.



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