Business constraints, internet use, and partnership among micro and small enterprises in manufacturing: a data mining to official statistics

Abstract

Governments in many countries make programs facilitating micro and small enterprises (MSEs) to grow. However, many MSEs and their numerous sectors and subsectors create complex issues on facilitating them appropriately. This study investigates the characteristics of Indonesian manufacturing MSEs, focusing on the association of business constraints, internet use, and business partnership. The result should assist policymakers in supporting MSEs based on their characteristics, and the problem faced. A data mining approach with the Cross-Industry Standard Process for Data Mining (CRISP-DM) framework was adopted to analyze official statistics about manufacturing MSEs. The data analysis uses the Knime Analytical Platform. The descriptive analysis shows that among 23 manufacturing sub-sectors, the food, wood, and apparel industry contribute 65% of MSEs. Business constraints, the purpose of internet use, and support obtained from partnership vary across sub-sectors. Clustering analysis indicates that sub-sectors with higher internet use associate with higher capital and competitor constraints. In addition, the result specifies that sub-sectors with a higher percentage of MSEs having partnerships perceive higher constraints in finding the capital source, responding to competition, and low constraint in raw material access. This study enriches the literature in the MSEs development by emphasizing analysis of manufacturing sub-sectors and addressing the association among business constraints, internet use, and partnership. This study suggests the policymakers supporting MSEs not with a one-for-all approach but based on the characteristics of MSE sub-sectors. Facilitation to enhance internet use for productive activities and business partnership should be pursued to help MSEs facing business constraints.