This paper examines the development of micro, small and medium enterprises (MSMEs) in Indonesia. It has three research issues, namely the role of MSMEs, their constraints, and the importance of MSMEs for the creation of business opportunities for women. More specifically, the study aims to answer the following research questions. First, how important are MSMEs in Indonesia? Second, what are their main constraints? Third, how important are they, especially micro and small enterprises (MSEs), for the creation of business opportunities for women? Fourth, is the growth of MSEs a sign of increased entrepreneurial spirit or a reflection of poverty? This study adopted descriptive analysis using secondary data. It shows that MSMEs in Indonesia are dominated by MSEs, and accounted for almost 100% of all existing firms but only contributed between 58 to 61% of gross domestic product (GDP). About 42.84% of MSEs are owned by women, although the ratio of female to male entrepreneurs in MSEs varies by province. Poverty seems to be the main force behind the growth of MSEs. This study ends with some policy recommendations that the government should: (i) conduct trainings that focus on online marketing, entrepreneurship, management, and improving the quality of product and business efficiency; (ii) provide alternative funding facilities with low interest rates and non-burdensome requirements; and (iii) provide assistance directly in the production site for new entrepreneurs in their first years of running businesses. In addition, all gender discrimination treatments that have been burdensome for women to run own businesses must be eliminated. This study has, however, several limitations, especially with respect to the third and fourth research questions. Secondary data used does not have information about the main/initial motivation of MSME owners to run their own business and their socioeconomic profiles.

Small and medium enterprises (SMEs) 1 in Indonesia are very important for employment creation and are important sources of economic growth and foreign currencies. It is therefore not a surprise that SMEs receive ample attention in Indonesia. In recent years, particular attention has been paid to development of SME clusters. The main aim of this paper is to review government policies on SMEs with a clustering approach, in Indonesia. The paper argues that in many cases, the development policy has not been so successful. In essence, most failures can be attributed to the fact that one or more critical factors for successful SME cluster development were either not existing or not addressed correctly. Neglecting cluster linkage to markets is one main reason for the failure. Prerequisite for successful cluster development is the cluster's potential to access growing markets, either domestic or abroad.

Environmental shocks can occur when emerging country governments open their markets to outside influences. We extend research conducted primarily in mature economies on how managers react to environmental shocks by evaluating how environmental shock type, a firm's strategic orientation, and its slack resources affected strategic alliance formation intentions during and immediately following the Asian Financial Crisis. Results from two Indonesian small-and medium-sized enterprises (SME) samples show that these factors influenced alliance intentions, although not always in ways that were consistent with previous research findings in more mature markets. Overall, our results provide critical insights into emerging market firms' strategic actions, particularly related to key managerial motivations for SME alliance formation.