Competitiveness of Nations and The Welfare of Society on Indonesia's Small Medium Industries Perspective

Abstract

Small and Medium Industries in Indonesia, since the approval of ACFTA in 1992.The challenges for market opportunities can be seen from the price, export, and investment, but it is quite severe consequences. The consequences of ACFTA for Small and Medium Industry in all cases they must have competitiveness that should be supported by three main components. Three main components include basic requirements for driven economies, efficiency enhancers for efficiency driven economies, and innovations and sophistication for innovation driven economies. Indonesia's position to the third factor is far below than other most countries in Asia and China. Contributing factors are inefficiency of bureaucracy, policy instability, business environment that not conducive and corruption. While China as a major competitor, still doing . process of policy reform through bank restructuring and provide high supports to Small and Medium Industries to enter the open market