Author: Kuncoro Wastuwibowo (Page 1 of 8)

MSME Financing

Now about the MSME ecosystem.

The Govt has repeatedly mentioned that we have 65 million MSMEs in Indonesia, and that the MSME are the very backbone of the national economy: they contribute ±61% of GDP and provide ±120 million jobs, nearly the entire labour force. Yet for all their importance, they are treated with something close to neglect by national financial system. While state banks happily court the large corporates and property developers, the millions of small firms that keep the country running receive less than 20% of their credit. And when the MSME secure a loan, they pay dearly for it, at interest rates of 12%–18% per year, even when BI’s rate rests at 5%. A curious kind of financial apartheid: the majority does the heavy lifting, the minority enjoys the cheap capital.

The Minister of Finance, to add insult to injury, has been swifter at taxing MSME than at financing them. Efforts to broaden the tax base focus on micro firms while the big players continue to enjoy exemptions, incentives, and creative loopholes. Programs intended to strengthen domestic small industry, remain piecemeal, minimally supported, and shifted instead to use the MSME data for taxing. The rhetoric is that MSMEs are the backbone of the economy; the practice is that they are milked like docile cows for easy revenue, without being fed the credit that might fatten them into global competitors.

There is surely the KUR program the Govt always mentions, which offers subsidised credit to small businesses. In H1/2025, around Rp 133T was disbursed to some 2.3 million borrowers. That number is impressive on its own, yet it reaches only 3% or 4% of the total MSME population. And the balance is skewed beyond recognition: nearly 1.9 million of those borrowers were micro firms, a modest 159 thousand were small firms, and a mere 16 thousand were so-called ultra-micro. Medium-sized enterprises are excluded entirely, with the optimistic expectation that they will graduate to commercial loans — a graduation ceremony that only rarely takes place.

KUR is not nothing, but neither is it enough. What Indonesia needs is a breakthrough: a national credit guarantee scheme that shares risks between the state and the banks and, in doing so, brings down lending rates while opening the doors of finance to millions who are currently shut out. The idea is simple. If a portion of loans in a defined portfolio go bad, the state-backed guarantor pays part of the loss. With that safety net in place, banks can lend at lower rates and to a wider circle of borrowers.

This is not some wild experiment. South Korea’s KODIT has long guaranteed up to 85% of SME loans; Japan’s municipal credit guarantee corporations have done the same for decades, usually at 80% coverage. The US Small Business Administration runs its own guarantees on 75% to 85% of small business loans. Europe operates portfolio schemes through InvestEU. The lesson is consistent: when governments shoulder part of the risk, banks lend more, charge less, and the fiscal costs remain entirely manageable.

What would this look like in Indonesia? Imagine a scheme supporting 1.5 million loans per year, with an average size of Rp 150 million, creating an annual portfolio of roughly Rp 225T. The guarantor would cover 40% of first losses, capped at 10% of the portfolio to prevent excess. Banks would pay a fee of 1.8% p.a., softened by a small state subsidy of 0.4%. In practice, this would mean loans to small businesses priced at about 3.5% lower than they are today. The expected fiscal cost to the state would be about Rp 2.3T per year, with a guarantor capital buffer of roughly Rp 8T. For the price of a single prestige infrastructure project, the government could transform access to finance for millions of enterprises.

The institutions are already there. Jamkrindo and Askrindo could act as front-line guarantors just like KUR. PII could serve as a backstop. Multilateral lenders such as the World Bank, ADB, or IsDB could add further insurance, while state and private banks would originate the loans. Oversight and enforcement would fall to the Ministry of Finance, Bank Indonesia, and the Financial Services Authority (OJK), with the Ministry of MSME ensuring that outreach truly extends beyond Java and into women-owned and first-time borrowers.

The expected results could be far from trivial. With 1.5 million new loans guaranteed each year, more small firms would cross into the formal economy. Average borrowing rates would fall from the current 12% to 15% into the single digits. Employment would grow by perhaps one million jobs a year, as enterprises invest and expand. GDP growth would tick upward by at least 0.5%. And because borrowers under the scheme must be formally registered, the tax base would widen, meaning the program could ultimately pay for itself.

Indonesia cannot hope to reach sustained 6%–7% growth while its entrepreneurs are trapped in a high-cost credit desert. This lending guarantee program would provide them with the rain they need. Alongside, the state should push forward with digital credit scoring, drawing on tax, e-commerce, and utility data; it should open the way for SME bonds and securitisation; and it should modernise collateral laws so that machinery, vehicles, and inventory can be pledged as security, not only land and buildings.

Without accelarating these programs, Indonesia risks remaining a dual economy: one world of corporates enjoying cheap capital and tax incentives, and another of millions of MSMEs left to carry the country on their backs while paying through the nose for the privilege.

A Failed Country, A Failed Government

A failed government is not defined by temporary setbacks, nor even by economic hardship. It is defined by a collapse of legitimacy, when the people no longer see leaders as protectors, but as predators. When power is used not to govern, but to plunder. When truth is buried beneath propaganda, and dissent is silenced by force rather than answered by reason.

A failed country is not a land without wealth, but a land where justice is absent. Where security is traded for fear, opportunity for favoritism, and institutions rot from within. It is when corruption becomes the operating system, and the constitution nothing more than a decorative relic.

Here’s the darkened Garuda, stripped of its golden radiance. The bull, once a symbol of democracy, now stares hollow-eyed as public will is sold to the highest bidder. The banyan tree, meant to represent unity, now casts shadows of division and fragmentation. The rice and cotton, symbols of prosperity, lie barren under monopolies and systemic greed. The chain, once the strength of solidarity, rusts into a shackle of oppression. And the star, once a guiding light, dims into the emptiness of hypocrisy.

The government has failed. The system has failed. But a nation dies only if its people surrender. The Garuda in darkness does not signal the end. It signals a choice: accept the failure, or ignite renewal. In that choice lies the fate of the republic.

Sicily

I believe many people use AI like ChatGPT to ask questions about themselves or to see how they’re perceived by the world or the internet. However, I found it unsettling.

I was looking into some travel options, and one of the places I checked was Sicily. ChatGPT gave me some recommendations, ending with something like…

That’s interesting. I was curious, so I asked:

And its answer hit me hard and deep:

Speechless, I just leave it here with no comment.

Ten Feline Principles

Feline Philosophy: Cats and the Meaning of Life, by John Gray, has accompanied my Catterday. Published in 2020 by Penguin Books, the book is a wry and elegant meditation that contrasts the restless pursuit of meaning in human life with the serene indifference of cats. Rather than anthropomorphising animals, Gray invites readers to view humanity through a feline lens — one that reveals the absurdity of our moral pretensions, the futility of our anxieties, and the possibility of a more graceful existence, precisely by abandoning the need to justify it.

Its last chapter offers a feline-inspired rethinking of how one might live with greater clarity and less delusion: Ten Feline Principles for Living Well.

  1. Never try to persuade human beings to be reasonable — Trying to persuade human beings to be rational is like trying to teach cats to be vegans. Human beings use reason to bolster whatever they want to believe, seldom to find out if what they believe is true.
  2. It is foolish to complain that you do not have enough time — If you think you do not have enough time, you do not know how to pass your time. Do what serves a purpose of yours and what you enjoy doing for its own sake. Live like this, and you will have plenty of time.
  3. Do not look for meaning in your suffering — If you are unhappy, you may seek comfort in your misery, but you risk making it the meaning of your life. Do not become attached to your suffering, and avoid those who do.
  4. It is better to be indifferent to others than to feel you have to love them — Few ideals have been more harmful than that of universal love. Better cultivate indifference, which may turn into kindness.
  5. Forget about pursuing happiness, and you may find it — You will not find happiness by chasing after it, since you do not know what will make you happy. Instead, do what you find most interesting and you will be happy knowing nothing of happiness.
  6. Life is not a story — If you think of your life as a story, you will be tempted to write it to the end. But you do not know how it will end, or what will happen before it does. It would be better to throw the script away. The unwritten life is more worth living than any story you can invent.
  7. Do not fear the dark, for much that is precious is found in the night — You have been taught to think before you act, and this may be good advice. Acting on how you feel at the moment may be no more than obeying worn-out philosophies you have accepted without thinking. But some moments may follow an inkling that glimmers in the shadows. You need to know where it may lead you.
  8. Sleep for the joy of sleeping — Sleeping so that you can work harder when you wake up is a miserable way to live. Sleep for pleasure, not profit.
  9. Beware anyone who offers to make you happy — Those who offer to make you happy do so in order that they themselves may be less unhappy. Your suffering is necessary to them, since without it they would have less reason for living. Mistrust people who say they live for others.
  10. If you cannot learn to live a little more like a cat, return without regret to the human world of diversion

The US Trade Imbalance

The US has long been concerned about its persistent trade imbalance, frequently attributing responsibility to its business-partner countries for the gap between imports and exports. However, it should be recognised that most of the imbalance originates internally, driven by American corporations’ strategic pursuit of short-term profits, often through aggressive offshore profit-shifting practices. American businesses with the highest capitalisation, such as Apple, Google, and Microsoft, significantly contribute to this imbalance by establishing subsidiaries in low-tax jurisdictions like Ireland or Bermuda, legally diverting profits and depriving the US Treasury of critical tax revenues.

Apple has routinely utilised offshore structures, holding over $200 billion overseas at one point, strategically positioning intellectual property (IP) subsidiaries in countries with more favourable tax policies. Similarly, Google’s “Double Irish with a Dutch Sandwich” facilitated the shifting of billions in global advertising revenue, resulting in minimal domestic taxation. These practices are typically legal yet ethically contentious, with annual corporate profit-shifting estimated between $300 and $350 billion, leading to approximately $100–$150 billion in lost US tax revenue each year, according to estimates from the Congressional Budget Office and economist Gabriel Zucman.

In addition to technology firms, professional service companies such as McKinsey, other consultancy firms, and numerous US law firms frequently establish regional offices overseas, ensuring substantial earnings remain offshore. Although these practices are mostly legal, they highlight the significant internal roots of the trade imbalance, reflecting structural issues in corporate governance and tax policy rather than external economic aggression.

To meaningfully address these challenges, the US should initiate comprehensive internal reforms, beginning with corporate governance. A decisive shift from shareholder capitalism—prioritising quarterly profits—to stakeholder capitalism, where companies equally value long-term investments in employees, communities, and sustainability, is essential. The 2019 Business Roundtable statement was a symbolic step in this direction, but substantial action has been limited. True reform necessitates redefining executive compensation to incentivise sustainable, long-term growth rather than stock price manipulation through buybacks.

On the policy front, the US government should strengthen anti-profit-shifting measures by enhancing transparency through mandatory country-by-country financial reporting and enforcing stringent economic substance requirements. Implementing the OECD-backed global minimum tax (15%) could curb excessive offshore tax arbitrage by ensuring multinationals pay fair taxes irrespective of where they report profits. Additionally, penalising superficial offshore structures while incentivising genuine domestic investments could significantly mitigate revenue losses.

Ethically, American corporate culture should evolve to reject aggressive tax avoidance as standard practice. Promoting ethical standards and responsible business conduct, supported by public advocacy, investor pressure through Environmental, Social, and Governance (ESG) criteria, and transparent financial disclosures, could substantially reshape corporate behaviour. Institutional investors, pension funds, and even individual consumers can wield considerable influence by rewarding ethical corporate actions and penalising short-termist, exploitative strategies.

Ultimately, resolving the US trade imbalance is not solely about external tariffs or punitive measures against other nations but requires confronting internal structural issues directly. By embracing rigorous regulatory reforms, incentivising ethical corporate governance, and committing to strategic long-term economic planning, America can effectively rebalance trade, recover significant lost revenues, and foster sustainable economic prosperity for future generations.

6G Network

The 6G network represents the next substantial advancement in mobile technology and is anticipated to launch around 2030. Currently in its research phase, 6G technology promises to significantly surpass the capabilities of both 5G and 4G by delivering vastly improved speeds, reduced latency, increased network capacity, and enhanced connectivity. By leveraging Terahertz (THz) frequencies to achieve greater bandwidth, integrating artificial intelligence for smarter network management, and employing quantum communication technologies for superior security, 6G is expected to power ground-breaking applications. These applications include holographic communication, brain-machine interfaces, autonomous systems, and the Internet of Everything (IoE), thus paving the way towards a future characterised by comprehensive connectivity and intelligence.

Fundamental developments in 6G technology suggest substantial performance improvements over preceding generations. Spectrum efficiency is projected to improve by five to ten times compared to 5G, maximising spectrum utilisation to accommodate rising network demands through high-capacity transmissions. Peak data rates exceeding 1 Tb/s will enable next-generation applications, including holographic communication and immersive experiences in ultra-high resolution. Moreover, latency will reduce dramatically to between 10 and 100 microseconds for over-the-air (OTA) transmissions, facilitating ultra-reliable real-time applications such as brain-machine interfaces, autonomous driving systems, and tactile internet.

Furthermore, mobility will be considerably enhanced, with support for speeds of up to 1000 km/h, accommodating high-speed transport systems like hypersonic travel and advanced railway infrastructure. Connectivity density improvements will allow more than 10 million devices per square kilometre to connect simultaneously, essential for managing dense IoT environments, smart city infrastructures, industrial automation, and ambient intelligence applications. In terms of sustainability, energy efficiency is set to increase by a factor of 100, significantly reducing the environmental impact of the expanding digital landscape. Additionally, an area traffic capacity reaching up to 1 Gbps per square metre will ensure stable and reliable performance, particularly in densely populated urban areas or during high-traffic events.

6G is being developed to cater to diverse and futuristic use cases, broadly categorised into distinct vertical segments. Enhanced eMBB (FeMBB) will support applications such as real-time holographic telepresence for virtual meetings, educational purposes, and entertainment; full-sensory digital interactions incorporating multi-sensory experiences; and ultra-high-definition video streaming for cinema-quality remote collaboration. Enhanced Ultra-Reliable Low-Latency Communications (ERLLC) will deliver highly dependable real-time connections for fully automated vehicles in urban and motorway scenarios, as well as precise, responsive connectivity for smart factories, robotics, and the industrial IoT.

Massive Machine-Type Communications (umMTC) will facilitate the realisation of the Internet of Everything (IoE), comprehensively integrating various devices, systems, and environments to support smart cities and personalised services. Enhanced Low Power Communications (ELPC) will enable advanced nanoscale connectivity within healthcare and biological systems, known as the Internet of Bio-Nano-Things. Long-Distance High-Mobility Communications (LDHMC) will ensure reliable communication in extreme contexts, including space exploration and tourism, deep-sea sightseeing and operations, and hyperspeed railway systems travelling at speeds beyond 1000 km/h.

Finally, 6G places a significant emphasis on energy efficiency and environmental sustainability. Innovations in energy harvesting will enable devices to capture ambient energy from solar power and electromagnetic waves, reducing dependency on traditional battery sources. Zero-power communication technologies will allow certain devices to function solely on harvested energy, particularly beneficial for IoT applications in remote or inaccessible areas. AI-driven energy management systems will optimise resource allocation across the network, minimising power usage without sacrificing performance, thus aligning technological progress with ecological responsibility.

IEEE TEMSCON 2024

The IEEE TEMS (Technology and Engineering Management Society) is an IEEE society focusing in engineering and technology management. TEMS serves professionals who work at the intersection of technical and managerial roles, providing resources for innovation, leadership, and strategic thinking in technology-focused business. The society’s mission is to enhance knowledge and skills in managing the processes, resources, and challenges of technology-intensive and engineering-centric projects.

For the 1st time, IEEE TEMS carried out one of its flagship conference in Indonesia. The IEEE TEMS Conference Asia-Pacific (TEMSCON ASPAC) took place in Bali from 25 to 26 September, at the Prama Sanur Beach Hotel. The conference theme, “Achieving Competitiveness in the Age of AI,” focused on the transformative role of AI in modern business and engineering management. The top leaders of the IEEE TEMS, accompanied by scholars, industry leaders, and researchers from around world (beyond only Asia-Pacific region) gathered to discuss topics including updated innovations related to competitiveness, sustainable supply chain management, cybersecurity policies, digital healthcare innovations, and entrepreneurship, etc within the digital ecosystem.

Photo session at the TEMSCON opening ceremony

The conference began with a welcome from Conference Chair Prof. Andy Chen (former IEEE TEMS President and current President-Elect of the IEEE Systems Council). The opening session featured introductory remarks from prominent figures, including Prof. Andrea Balz (current President of IEEE TEMS), and Prof. Imam Baihaqi (Vice Rector of ITS Surabaya).

With Prof Benny Tjahjono and the Coventry University Gang at the TEMSCON opening ceremony

The keynote presentations were delivered by distinguished academics: Prof. Richard Dashwood (Vice-Provost for Research and Enterprise and Deputy Vice-Chancellor for Research at Coventry University), Prof. Alexander Brem (Professor and Vice Rector at the University of Stuttgart); and Prof. Anna Tyshetskaya (Vice Rector at Sankt Petersburg University in Russia). After the opening, the conference continued with breaking sessions for research paper presentations.

The second day of the conference was carried out as an Industry Forum with experts highlighted the challenges and opportunities that AI brings to global competitiveness. The speakers, besides Dr Ravikiran Annaswamy (the Past President of the IEEE TEMS) and Dr Sudeendra Koushik (the President-Elect of the IEEE TEMS), was yours truly. It was surely an honour. The title of my presentation was “Towards Complexity-Based Strategic Management.”

Keynote Speech by Yours Truly at TEMSCON Industry Forum

Following the lunch break, the forum resumed with an engaging panel session on “Accelerating Innovation for a Sustainable Future.” Prof. Marc Schlichtner, (Principal Key Expert at Siemens) served as the speaker, with Prof. Robert Bierwolf (TEMS Board of Governors Member) moderating. The panelists included esteemed leaders in technology and engineering management: Prof. Alexander Brem (Professor and Vice Rector at the University of Stuttgart), Prof. Anna Tyshetskaya (Vice Rector at Sankt Petersburg University in Russia), and yours truly. Truly an honour to share the stage with such distinguished figures.


The conference concluded with a gala dinner that offered a warm and lively networking opportunity for all participants. This included the TEMS Executive Committee, Board of Governors members, and leaders from various universities, fostering valuable connections and camaraderie across the academic and professional communities in attendance.

Quantum Methods in Researches

After attending a meeting with Pelindo yesterday, I attended a seminar hosted by FEB UI as part of a series themed “Conducting Impactful Business Research on an International Scale: Recent Trends, Methods, and Challenges.” Today’s session featured Agung Trisetyarso and Fithra Faisal Hariadi discussing “Research Methods: Quantum Approach to Coopetition Analysis and Disruptive Innovation.” This emerging approach leverages quantum states and mathematical formalisms like Dirac notation to model complex systems in social and economic research. By addressing uncertainty, interdependence, and multidimensional data, it opens pathways to innovative analyses of decision-making, preference patterns, and network dynamics.

Quantum methods uniquely represent probabilities through superposition (coexistence of multiple states) and entanglement (interdependencies between variables). In economics, they can model ambiguous preferences and market uncertainties, while in social sciences, they tackle paradoxical decision-making scenarios where traditional logic falls short. Additionally, entanglement provides insights into deep interdependencies, such as the impact of social ties or market ecosystems. The high-dimensional nature of quantum states allows for representing multifaceted variables, such as consumer preferences, and modeling dynamic changes over time—useful for exploring cultural shifts, policy impacts, or market evolution.

I found the discussion particularly compelling regarding its application to handling volatilities and uncertainties in economic systems and complexity-based strategies. The ability to accommodate multiple states and interdependent variables makes this approach well-suited to ecosystem-based strategies, addressing ambiguous preferences and paradoxical decision-making. I plan to delve deeper into these methods to explore their potential in advancing strategic insights.

Non-Accumulative Adaptability

Exploring the ideas about adaptation and emergence as a part of ecosystem (i.e. complex adaptive system — CAS) development, I think it is more exciting when we see it through the combined lenses of CAS, Schumpeter, Kuhn, Foucault, and Lyotard. Each of these perspectives explores how change does not just happen bit by bit, but instead in bold (stolen from Telkom’s five bold moves program) and disruptive leaps, as transformations that completely alter the playing field, whether we’re talking about economies, sciences, societies, or even our basic understanding of the world.

CAS implies that change is a matter of adaptive cycles — cycles of growth, accumulation, collapse, and renewal. An ecosystem could grow, accumulates the resources until hitting a limit. Then its whole structure becomes unsustainable, collapses, and reboots in a new way — it reorganises itself with fresh relationships and opportunities. This cycle is anything but smooth; it’s like a forest fire clearing the way for new growth, and it’s essential for resilience and long-term adaptability. This model resonates closely with Schumpeter’s idea of creative destruction in economies. Schumpeter saw capitalism as a system where innovation doesn’t build up neatly on top of the old but bulldozes it — new technologies, businesses, and products disrupt markets, toppling established companies and paving the way for the next wave of growth. For Schumpeter, entrepreneurs drive this cycle, constantly reinventing the economy and shifting the landscape in unexpected ways.

Thomas Kuhn brought a similar idea into science with his concept of paradigm shifts. In Kuhn’s view, science isn’t a smooth, cumulative process of adding one discovery to the next. Instead, it moves forward in fits and starts. Scientists work within a “paradigm” — a shared framework for understanding the world — until enough anomalies build up that the whole system starts to feel shaky. At that point, someone comes along with a radically new idea that doesn’t just tweak the existing framework but replaces it. Kuhn’s paradigm shift is a profound reimagining of the rules, kind of like Schumpeter’s creative destruction but applied to the way we think and know. It’s as if science periodically wipes the slate clean and rebuilds itself from a fresh perspective.

As a Gen-X, I must also mention Michel Foucault. Foucault offered a more historical spin on these ideas with his concept of epistemes. Foucault believed that every era has its own underlying structure of knowledge, shaping how people perceive and think about the world. These epistemes don’t evolve smoothly; they’re punctuated by abrupt shifts where the entire basis of understanding changes. Just like in a Kuhnian paradigm shift, when a new episteme takes over, it fundamentally changes what questions are even worth asking, as well as who holds power in the discourse. In Foucault’s view, knowledge isn’t just a collection of facts piling up—it’s tied to shifts in power and perspective, with each era replacing the last in a way that’s not fully compatible with what came before.

Then there’s Jean-François Lyotard, who takes the idea a step further by challenging the very idea of cumulative “progress” altogether. As a postmodernist, Lyotard argued that the grand narratives that used to make sense of history, science, and knowledge are breaking down. Instead of one single, upward trajectory, we’re left with multiple, fragmented stories that don’t fit neatly together. Knowledge, for Lyotard, is no longer a matter of moving toward some ultimate truth but an evolving patchwork of perspectives. This rejection of a single narrative echoes Schumpeter’s and Kuhn’s visions of disruption and replacement over seamless continuity. Lyotard’s work suggests that, in knowledge and culture alike, stability is always provisional, subject to the next seismic shift in understanding.

Let’s imagine they can talk together

So when we look at all these thinkers together, a fascinating picture emerges. In CAS, Schumpeter’s economics, Kuhn’s science, Foucault’s history, and Lyotard’s philosophy, progress is not about slowly stacking up ideas or wealth. Instead, it’s about cycles of buildup, breakdown, and renewal — each shift leaving behind remnants of the old and bringing forth something fundamentally new. This kind of progress isn’t just unpredictable; it’s fueled by disruption, tension, and revolution. These thinkers collectively remind us that the most transformative changes come from breaking with the past, not from adding to it. Progress, in this view, is a story of radical leaps, creative destruction, paradigm shifts, and fresh starts—where each new phase is a bold departure from what came before.

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