Indonesian SMEs Readying for Global Growth

Oxford Economics’ Global Study Sponsored by SAP Reveals that Small and Midsize Firms in Indonesia are Gearing Up to Compete Internationally through Business Transformation and Investment in Innovative Technology

JAKARTA, IndonesiaSAP (NYSE: SAP) and Oxford Economics today announced survey findings from an Oxford Economics research programme, sponsored by SAP, that show small and midsize enterprises (SMEs) in Indonesia and around the world are making major changes to their business models, products and go-to-market strategies to equip them to compete globally. SMEs are also competing with larger companies by investing in technology to improve operations and become more efficient.

The global survey of 2,100 executives from SMEs in 21 countries, including Indonesia, China, India, and Australia, shows they believe they are equipped to compete with larger firms and have some clear advantages over them. The findings overturn industry stereotypes of smaller companies as local or regional entities that are largely technophobic.

“The overarching finding of the study was that successful SMEs in Indonesia are going outside of their home market to accelerate growth. And by doing so, they face fierce competition from large multinational corporations and more empowered customers in new markets,” said Suraj Pai, Vice President, Platform Solutions, SAP South East Asia. “Indonesian SMEs need to invest in the latest technology innovations to evolve their business models and effectively compete in the new international landscape.”

Important findings from the research include:

  • Indonesian SMEs are expected to grow outside their home market while facing increasing global competition at home. Thirteen percent of Indonesian respondents currently do business solely in the home country and this figure is expected to fall steeply to just 2 percent in three years. Additionally, Indonesian SMEs generating more than one-fifth of their revenue outside of the country is projected to increase from 56 percent today to 74 percent in three years. While 14 percent of the Indonesian SMEs surveyed generate no revenue outside Indonesia today, this number drops to just 5 percent in three years. More than half (55 percent) of respondents in Indonesia say they are competing against more foreign firms now than in the past.
  • In Indonesia, labour and economic concerns top SMEs’ worries. Increasing labour costs are cited by 39 percent of Indonesian SMEs surveyed as the top trend affecting their business today. Economic uncertainty (36 percent) and shifting customer expectations (30 percent) are ranked by the respondents as the second and third major trends influencing their local market.
  • Indonesian SMEs recognise they must embrace business transformation to compete. Indonesian SMEs understand the need to rethink their business strategy in order to adapt to an increasingly global marketplace. Two-thirds of respondents in Indonesia have either recently completed, are in the middle of, or are about to begin a significant business transformation. Sixty four percent of the Indonesian SMEs surveyed agree that transformation is essential to staying ahead of the competition. More than half of the respondents in Indonesia (56 percent) say expanding product and service offerings is essential to driving growth in an era of new markets and empowered customers.
  • Technology is important for SMEs in Indonesia and a major element of business transformation. Investing in new technologies is one of the top strategic priorities as SMEs transform their businesses for the global marketplace. More than half of the Indonesian SMEs surveyed strongly believe technology helps them achieve longevity and sustainable growth. In terms of investment, 55 percent of the firms cite mobile technology as the greatest priority, followed by social media (51 percent) and business management software (42 percent). Sixty-three percent of Indonesian SMEs say their technology investment is contingent on a clear return on investment.
  • Innovative technology is key to improving product and service development and driving cost efficiencies. Indonesian SMEs see improvement of product and service development and driving cost efficiencies as the two biggest benefits from the adoption of disruptive technologies. Cloud computing and mobile technology are expected to see the greatest increase in adoption across Indonesian SMEs, at 100 percent and 40 percent, compared to the global growth rate of 35 percent and 18 percent respectively. Over half of the Indonesian SMEs surveyed (52 percent) expect social media to have a significant impact on revenue growth over the next three years.
  • Indonesian SMEs face obstacles to technology adoption. Nearly half of the respondents in Indonesia (46 percent) say cloud computing is key to driving cost efficiencies, and the adoption of cloud technologies by Indonesian SMEs is expected to grow rapidly in the next three years. Security concerns (54 percent) and lack of understanding of the benefits of cloud computing (40 percent) are the key challenges to cloud adoption, according to the Indonesian SMEs surveyed. In addition, 63 percent of Indonesian SMEs worry about the accuracy and reliability of information when using data analytics.

“The road ahead is well marked for SMEs in Asia Pacific,” said Edward Cone, managing editor and senior analyst at Oxford Economics. “Globalisation, transformation and technology will be the hallmarks of successful small and midsize companies.”

About the research
This research program is based on an online survey conducted in April 2013. Survey respondents came from 21 countries around the world, with the total of 2,100 responses evenly divided (100 respondents each) among the following: Australia, Brazil, Canada, Chile, China, Colombia, the Czech Republic, France, Germany, Hungary, India, Indonesia, Italy, Mexico, Poland, Portugal, Russia, South Africa, Spain, the United Kingdom, and the United States. Industries represented include discrete manufacturing (25 percent), professional services (21 percent), consumer products (22 percent), retail (17 percent), and wholesale (16 percent). Respondents are C-level executives or direct reports, including CEO/President/Owner (10 percent) and a broad mix of senior leaders from IT, sales, finance, operations, marketing, and procurement. Revenue at respondent firms ranges from $20 million–$99 million (27 percent) to $100 million–$249 million (23 percent), to $250 million–$499 million (29 percent), and $500 million–$750 million (20 percent).

About Oxford Economics
Oxford Economics was founded in 1981 as a commercial venture with Oxford University’s business college to provide economic advice and forecasts to international organizations. Since then, it has become one of the world’s foremost independent global economic firms, producing forecasts, analysis, and data on 190 countries and regions, 100 industries, and 2,600 sub-regions and cities. Its team includes over 80 professional economists, industry analysts, and management experts.

Oxford Economics specializes in global quantitative analysis, and business and public-policy advice. The firm offers a sophisticated portfolio of forecasting services, consisting of regular reports, databases, and models on countries, cities, and industries. Oxford Economics is renowned for its evidence-based consulting and thought leadership services, including economic impact studies, scenario analysis, business modeling, risk assessment, market sizing, executive surveys, white papers, and public-sector analysis. The firm is distinguished by the quality of its quantitative analysis, caliber of its staff, and close links with Oxford University. For more information, visit

About SAP
As market leader in enterprise application software, SAP (NYSE: SAP) helps companies of all sizes and industries run better. From back office to boardroom, warehouse to storefront, desktop to mobile device – SAP empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition. SAP applications and services enable more than 248,500 customers to operate profitably, adapt continuously, and grow sustainably. For more information, visit

Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,” “predict,” “should” and “will” and similar expressions as they relate to SAP are intended to identify such forward-looking statements. SAP undertakes no obligation to publicly update or revise any forward-looking statements. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect SAP’s future financial results are discussed more fully in SAP’s filings with the U.S. Securities and Exchange Commission (“SEC”), including SAP’s most recent Annual Report on Form 20-F filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.

2013 SAP AG. All rights reserved.
SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and other countries. Please see for additional trademark information and notices.

Note to editors
To preview and download broadcast-standard stock footage and press photos digitally, please visit On this platform, you can find high resolution material for your media channels. To view video stories on diverse topics, visit From this site, you can embed videos into your own Web pages, share video via email links, and subscribe to RSS feeds from SAP TV.

Follow SAP on Twitter at @sapnews.

For customers interested in learning more about SAP products:
Global Customer Center: +49 180 534-34-24

For more information, press only:
Selina Yeo, (+65) 6664 4436,
Jeremy Eagle, Oxford Economics, +1 (646) 503 3049,