This article originally appeared in *Garda Indonesia* under the title: "NTT’s Micro and Small Industries at the Crossroads of Digital Transformation." Read more at: https://gardaindonesia.id/industri-mikro-kecil-ntt-di-persimpangan-transformasi-digital/
By: Arumia Mustika Rani, Junior Expert Computer Analyst, BPS (Statistics Indonesia) – NTT Province
It is entirely possible for a piece of *tenun ikat* (traditional woven fabric) from Alor to be sold overseas with just a single click on a mobile phone screen. A single product post on social media can reach thousands of potential buyers, transcending geographical barriers.
A business's competitiveness is no longer determined solely by product quality but also by its ability to adapt to digital technology to expand markets and reach consumers.
However, for thousands of Micro and Small Industry (IMK) players in East Nusa Tenggara (NTT), this scenario remains a luxury. Amidst the booming trend of internet-based markets, the region—known as Flobamora—faces a contrasting reality. Despite its immense economic potential, the sector has yet to fully reap the rewards of digital transformation.
Yet, the potential of this sector is massive. With 145,200 IMK business units spread across the region, NTT ranked fifth in Indonesia for the highest number of IMKs in 2024 (BPS, 2024). This figure demonstrates that the region's economic pulse relies not only on large-scale sectors but is also driven by thousands of micro and small business operators located even in the most remote villages.
Beyond the sheer number of businesses, the IMK sector is also known for being labor-intensive. In 2024, BPS recorded that the IMK sector in NTT employed 219,953 workers—a 3.62 percent increase from the previous year. Notably, approximately 65.90 percent of the IMK workforce in NTT consists of women. This highlights the vital role the IMK sector plays in women's economic empowerment and the improvement of household welfare. The textile industry's dominance—accounting for 51.22 percent—indicates that the majority of Small and Micro Industries (IMK) in NTT are rooted in local community skills and resources. Meanwhile, the food and beverage industry reflects the significant potential NTT possesses for processing agricultural and livestock products.
However, the substantial number of IMK businesses has not been fully matched by an ability to leverage digital technology. Amidst shifting consumer behaviors and the expanding internet-based marketplace, most IMKs in NTT continue to operate using traditional methods that have yet to enter the digitalization phase.
Although data shows an increase in the percentage of IMKs using the internet for business management—reaching 13.83 percent in 2024—this figure is insufficient to demonstrate successful business digitalization in the region.
Statistics Indonesia (BPS) also recorded that, as of 2024, 11.88 percent of all IMKs in NTT utilized the internet for product marketing. Additionally, 22.13 percent used the internet to search for information related to business development. A small fraction of IMKs utilized the internet for purchasing raw materials and processing payments, at 1.61 percent and 1.40 percent, respectively.
Digitalization among IMKs in NTT remains superficial. The internet tends to be used primarily as a tool for information gathering rather than for expanding market reach or enhancing operational efficiency. This is notable given that research titled "The Influence of Social Media on MSME Growth: A Case Study of Digital Marketing Strategies among MSMEs in Sidoarjo Regency, East Java" found that 80 percent of MSMEs experienced sales growth of 20–50 percent after actively using social media. If this situation remains unchanged, IMKs risk becoming mere spectators amidst the rapid growth of the national digital economy.
The low level of internet utilization by IMKs is inextricably linked to the digital landscape in NTT, which continues to face various challenges. According to BPS data, more than 30 percent of the population in NTT still lacks internet access, as evidenced by an internet penetration rate of only 67.75 percent in 2024. This situation aligns with data showing that only 54.84 percent of residents aged five and older have accessed the internet within the last three months. Nearly half of NTT's population has never used the internet, not even for simple activities such as using social media or communicating via messaging apps like WhatsApp. Furthermore, as of 2024, there remain 22 villages without internet coverage due to the absence of a signal—whether via GSM or CDMA networks.
This is where the 2026 Economic Census (SE2026) plays a strategic role. Through comprehensive data collection covering all business operators, SE2026 will provide a more complete picture of the actual business landscape—including IMK—not only in NTT but across Indonesia. This information serves as a vital foundation for formulating policies to develop Micro and Small Industries, expand digitalization programs, improve access to financing, and open up broader market opportunities.
Digital transformation requires not only internet networks and technology but also accurate data to serve as a compass for development. Given the immense potential of IMK, NTT has the opportunity to foster more adaptive, innovative, and competitive businesses.
SE2026 marks the first step in ensuring that no business owner is left behind on the journey toward a digital economy. Please welcome our officers when they visit your doorstep.
