THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT

Transcription

1 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT

2 2 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT LEGAL NOTICE CPA Australia Ltd ( CPA Australia ) is one of the world s largest accounting bodies, representing more than 155,000 members of the financial, accounting and business profession in 118 countries. ISBN: For information about CPA Australia, visit our website cpaaustralia.com.au First published 2016 CPA Australia Ltd ACN Level 20, 28 Freshwater Place Southbank Vic 3006 Australia Copyright CPA Australia Ltd (ABN ) ( CPA Australia ), All rights reserved. CPA Australia owns all copyright in these materials or uses it under licence or applicable law. For permission to reproduce any material, a request in writing is to be made to the Legal Business Unit, CPA Australia Ltd, Level 20, 28 Freshwater Place, Southbank, Victoria 3006 Australia. DISCLAIMER CPA Australia has used reasonable care and skill in compiling the content of these materials. However, CPA Australia makes no warranty that the materials are accurate and up to date. These materials do not constitute the provision of professional advice whether legal or otherwise. Users should seek their own independent advice prior to relying on or entering into any commitment based on the materials. The materials are purely published for reference purposes alone. CPA Australia, their employees, agents and consultants exclude completely all liability to any person for loss or damage of any kind including but not limited to legal costs, indirect, special or consequential loss or damage (however caused, including by negligence) arising from or relating in any way to the materials and/or any use of the materials. Where any law prohibits the exclusion of such liability, then to the maximum extent permitted by law, CPA Australia s liability for breach of the warranty will, at CPA Australia s option, be limited to the supply of the materials again, or the payment of the cost of having them supplied again.

3 3 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT OVERVIEW CPA Australia Asia-Pacific Small Business Survey 2015 is the sixth in a series of annual reports measuring small business confidence, the drivers of confidence, technology uptake and access to finance by small businesses. The data is compared across the eight economies included in this survey and over time. In total, 2932 participants completed the survey, including 510 from Australia, 610 from Mainland China, 265 from Hong Kong, 306 from Indonesia, 310 from Malaysia, 311 from New Zealand, 310 from Singapore and 310 from Vietnam. The online survey was conducted with a random sample of small business owners/managers between 24 September and 14 October The sample was obtained through panel providers. To qualify for the survey, participants were required to be an owner, a senior manager (defined as being a director, a principal, a CEO, a CFO, a senior manager or a managing director) or a qualified accountant of a business with fewer than 20 employees.

4 4 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT SUMMARY OF INDONESIA RESULTS Indonesia s small businesses are the most positive, innovative and focused on digital technologies of the eight markets surveyed. CPA Australia s Asia-Pacific Small Business Survey reveals that the outlook for Indonesia s economy and small business sector is very positive and this should persist for some time given the very strong focus by Indonesia s small businesses on innovation, exploiting digital technologies and exporting. This focus is flowing through to business growth, with the number of small businesses from Indonesia that reported growing in the past 12 months rising 15.2 percentage points (to 91.2 per cent) in this survey from the last, the highest reading of the markets surveyed and well above the survey average of 68.2 per cent. This very strong growth sentiment is expected to continue in 2016, with 92.5 per cent expecting to grow in the next 12 months (again, well above the survey average of 70.7 per cent). With Indonesia s economy being impacted by a number of negative external factors, including slowing growth in China, weak recoveries in the economies of the US, Japan and the euro area, and weak commodity prices, the strong increase in the number of small businesses that reported growing in the past 12 months shows the resilience of Indonesia s small businesses. Such resilience and their focus on innovation, exporting and digital technologies should mean that Indonesia s small businesses are well placed to take advantage of improvements in the global economy and recent initiatives by Indonesia s government designed to encourage business activity. This strong growth is translating through to the sector being a large creator of jobs, with two-thirds of Indonesia s small business sector increasing the number of their employees in the past 12 months, up from 48.9 per cent in 2014 and well above the survey average of 33.1 per cent. The survey results clearly show that there are very good reasons to be confident in the future, with Indonesia s small businesses being the most likely to expect to undertake innovation through the definite introduction in the next 12 months of a new product, service or process that is unique to Indonesia or the world (45.8 per cent of Indonesian small businesses compared with the survey average of 22.0 per cent). Indonesia s small businesses also lead the survey results when it comes to: growing their e-commerce presence (86.3 per cent of Indonesia s small businesses expect to grow their e- commerce presence to a large extent in the next 12 months compared with the survey average of 32.2 per cent) growing revenue from overseas markets (57.8 per cent of Indonesia s small businesses expect their revenue from overseas to grow strongly in the next 12 months compared with the survey average of 19.1 per cent) generating revenue from online sales (93.8 per cent of Indonesia s small businesses reported earning some revenue from online sales compared with the survey average of 68.9 per cent). This strong focus on innovation, e-commerce and exporting means that Indonesia s small businesses are in a good position to outcompete their less nimble and tech-savvy competitors and remain competitive against rivals from fast-growing neighbouring economies. The Indonesian government s new emphasis on policies designed to stimulate innovation-led growth should further inculcate a culture of innovation and entrepreneurship in small businesses. Such a culture is fundamental to Indonesia s future prosperity.

5 5 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT With the survey results demonstrating that small businesses that are innovating are more likely to be growing and creating jobs, this is clearly the right policy approach. Indonesia s small businesses are not only growing very strongly, creating jobs and preparing for the future they are in many respects shaping the future. Other results from the survey ASEAN Economic Community A large majority of Indonesia s small businesses (84.0 per cent) expect that the creation of the ASEAN Economic Community will have a positive impact on their business, the highest percentage amongst the four ASEAN nations included in this survey. Demographics Respondents to the survey are typically aged below 40 (79.4 per cent) and the business is 10 years old or less (75.2 per cent). There is a strong correlation between younger business owners and those businesses that expect to grow, sell online, use social media for business purposes, and innovate through the introduction of new products, processes or services. Improved business management Indonesia s small businesses were more likely to state that improved business management had a major positive impact on their business in the past 12 months than the survey average (33.3 per cent compared with the survey average of 25.4 per cent). Access to finance Indonesian small businesses that sought finance in the past 12 months were more likely to find the experience easier than any of the other markets surveyed (60.6 per cent found access to finance easy or very easy in this survey compared with the survey average of 47.6 per cent). The more confident business environment most likely contributed to an increase in the percentage of Indonesian small businesses that required finance over the past 12 months (86.3 per cent required external funds in the past 12 months against 78.4 per cent in the last survey). Funding business growth remains the most important reason for accessing external finance.

6 6 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT MAJOR FINDINGS FOR INDONESIA Indonesia s small businesses, with their very strong focus on innovation, are well placed to grow, create jobs and export in 2016 and beyond. With small businesses with an e-commerce presence being more likely to be growing and creating jobs, Indonesia s very strong focus on e- commerce is a distinct competitive advantage for its business and the economy. With small businesses that expect to grow revenue from exporting being more likely to be growing and creating jobs, Indonesia s very strong focus on exporting is a distinct competitive advantage. With the survey results showing a strong connection between social media use and business growth, the very strong uptake of social media by Indonesia s small businesses is a competitive advantage. Reflecting strong business conditions, over seven in ten of Indonesia s small businesses plan to increase their headcount in Growth prospects for Indonesia s small businesses in 2016 remains very high. The ASEAN Economic Community expected to have a positive influence on small business across the ASEAN region.

7 7 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT KEY SURVEY FINDINGS FOR INDONESIA INNOVATION Indonesia s small businesses, with their very strong focus on innovation 1, are well placed to grow, create jobs and export in 2016 and beyond. Small businesses that in the next 12 months will definitely introduce a new product, service or process that is unique to their market or the world 2 Indonesia 45.8% China 31.6% Malaysia 29.0% Vietnam 26.1% Hong Kong 17.7% Singapore 15.2% New Zealand 6.8% Australia 5.1% 1 Innovation, for the purpose of the survey, is taken to be the introduction of a new product, service or process that is unique to a market or the world. 2 All data for China excludes Hong Kong, which is shown separately.

8 8 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT The relationship between innovation and jobs creation, business growth and exporting EMPLOYEE NUMBERS Percentage that expect to definitely introduce a product, service or process that is new to their market or the world Expecting to increase employee numbers in the next 12 months NOT expecting to increase employee numbers in the next 12 months BUSINESS GROWTH Expecting to grow their business in the next 12 months NOT expecting to grow their business in the next 12 months EXPORTING Expecting revenue from overseas sales to grow strongly in the next 12 months NOT expecting to grow their revenue from overseas sales in the next 12 months

9 9 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT With Indonesia s small businesses being by far the most likely to definitely expect to innovate in the next 12 months, small businesses from the nation are well placed to grow and outcompete their rivals from home and elsewhere. With the survey results showing innovative businesses are significantly more likely to be growing, exporting and creating jobs, it is easy to see why Indonesia s government has an emphasis on policies designed to stimulate innovation, including expanding its higher education sector. As a recent OECD paper on innovation stated, in the long run, it is difficult to imagine growth without innovation. The OECD estimates that innovation can contribute up to 50 per cent of economic growth depending on the country, the level of economic development and the phase of the economic cycle. Such an estimate highlights why Indonesia s government is absolutely right to have innovation as an important policy focus. 3 Businesses are also more likely to definitely expect to undertake innovation through the introduction in the next 12 months of a new product, service or process that is unique to their market or the world if they: have a business owner/manager aged under 40 have between 5 and 19 staff are in the banking, finance and insurance sector, or the manufacturing sector. KEY FINDING Indonesia s small businesses, with their very strong focus on innovation, are well placed to grow, create jobs and export in 2016 and beyond. We suggest that those Indonesian small businesses that are not innovating should consider making innovation a part of their business strategy. 3 OECD Innovation Strategy An Agenda for Policy Action, OECD Publishing, Paris, 2015, p. 4

10 10 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT E-COMMERCE With small businesses with an e-commerce presence being more likely to be growing and creating jobs, Indonesia s very strong focus on e-commerce is a distinct competitive advantage for its business and the economy. Small business that generated revenue from online sales by market 4 Indonesia China Vietnam Hong Kong Malaysia 93.8% 90.1% 85.1% 80.4% 73.2% Singapore 63.6% New Zealand Australia 33.0% 37.0% Small business that intend to grow their e-commerce presence to a large extent in the next 12 months by market 5 Indonesia 86.3% Hong Kong China Malaysia Vietnam 42.6% 36.4% 35.2% 33.5% Singapore 19.4% New Zealand Australia 9.6% 8.2% 4 All data for China excludes Hong Kong, which is shown separately. 5 All data for China excludes Hong Kong, which is shown separately.

11 11 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT The relationship between e-commerce and business growth, jobs creation and exporting BUSINESS GROWTH Percentage that expect to grow their e-commerce presence to a large extent Expecting to grow their business in the next 12 months NOT expecting to grow their business in the next 12 months EMPLOYEE NUMBERS Expecting to increase employee numbers in the next 12 months NOT expecting to increase employee numbers in the next 12 months EXPORTING Expecting revenue from overseas sales to grow strongly over the next 12 months NOT expecting to sell into overseas markets in the next 12 months

12 12 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT Small businesses from Indonesia are the leaders in generating revenue from online sales. This advantage is likely to grow, as Indonesia s small businesses are by far the most likely to expect to grow their e-commerce presence strongly in the next 12 months. With the survey results showing that small businesses that are selling online and seeking to grow their e-commerce presence are significantly more likely to be growing and creating jobs, it is easy to see why many of Indonesia s small business have a strong focus on e-commerce. The focus on e-commerce should also assist Indonesia s small businesses reduce the impact that rent has on their business, as it could allow them to reduce the floor space they need, particularly in high rental locations. It could also allow them to better connect with customers, many of whom are becoming increasingly familiar with purchasing goods and services online. While online sales are not relevant for all businesses, when you combine the results that show a strong connection between e-commerce and growth, and growing digital penetration and literacy of customers, the data suggests it would be wise for all businesses to investigate establishing and growing their e-commerce presence. Small businesses are also more likely to earn income from online sales where: the business has between 5 and 19 staff the business has been established for less than 21 years the respondent is aged under 40 the business is in the manufacturing sector. KEY FINDING The very strong focus by many of Indonesia s small businesses on e-commerce is a key competitive advantage for those businesses and the economy.

13 13 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT SMALL BUSINESS AND EXPORTING With small businesses that expect to grow revenue from exporting being more likely to be growing and creating jobs, Indonesia s very strong focus on exporting is a distinct competitive advantage. Small businesses expecting revenue from overseas sales will grow in the next 12 months by market 6 Indonesia 57.8% 24.2% China Vietnam Hong Kong 15.7% 19.7% 22.3% 46.1% 40.6% 32.8% Singapore Malaysia 17.7% 15.7% 15.7% 15.7% New Zealand Australia 7.1% 6.1% 16.4% 13.3% Grow strongly Grow a little 6 All data for China excludes Hong Kong, which is shown separately.

14 14 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT The relationship between exporting, and jobs creation and business growth EMPLOYEE NUMBERS Percentage that expect their revenue from exporting to grow strongly Expecting to increase employee numbers in the next 12 months NOT expecting to increase employee numbers in the next 12 months BUSINESS GROWTH Expecting to grow their business in the next 12 months NOT expecting to grow their business in the next 12 months Indonesia s small businesses lead the survey when it comes to exporting, with the number of Indonesian small businesses expecting to strongly grow their revenue from exporting over the next 12 months far exceeding other markets in this survey. Given the weak environment in a number of key export markets including the US, China, the euro area and Japan, this is a good result. With the survey results showing that small businesses that are exporting are more likely to be growing and creating jobs, this very strong export focus is a competitive advantage for Indonesia s small businesses and the economy more broadly. While an export focus does come with risks, including foreign exchange risks and the potential for downturns in key markets, the advantages of exporting over focusing on the domestic market are significant. A focus on the domestic market limits growth potential and increases the business s risk exposure should the local economy slow. It also means that the business may be less exposed to competitive pressures, which the survey results show may have a negative impact on innovation and growth. Further, the business may be less exposed to new ideas from new markets, which may also negatively impact innovation.

15 15 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT With the survey results showing a strong link between increasing revenue from exporting and business growth and jobs creation, it is easy to see why governments across the region are taking action to support and encourage international trade with initiatives such as the creation of the ASEAN Economic Community. Small businesses are also more likely to expect strong growth in their earnings from overseas in the next 12 markets if: the business is in the manufacturing sector the business has between 5 and 19 employees the respondent is aged under 50 the business has been established for less than 21 years. KEY FINDING The very strong focus of Indonesia s small businesses on exporting is a competitive advantage for them and the economy.

16 16 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT SOCIAL MEDIA With the survey results showing a strong connection between social media use and business growth, the very strong uptake of social media by Indonesia s small businesses is a competitive advantage. Small businesses that used social media in their business by market 7 China Vietnam Indonesia Hong Kong Malaysia 97.2% 96.5% 96.0% 93.2% 88.2% Singapore 79.6% New Zealand Australia 50.2% 56.5% With the survey results showing a connection between social media use for business purposes and business growth, the very strong uptake of social media amongst Indonesia s small businesses gives them a competitive advantage, particularly over businesses from Australia and New Zealand where the number of small businesses using social media is significantly lower. With customers being increasingly likely to seek to communicate and transact with businesses via social media, a robust social media presence should enhance a small business s ability to attract, retain and transact with customers. It may also enhance their brand reputation and assist them to grow their business. Those that use social media use it for a variety of purposes including communicating with existing customers, promoting their business to potential customers, and selling their products or services. Small businesses are significantly less likely to be using social media for business purposes where: the respondent is aged 50 or over the business has been established for over 20 years the business has four or fewer staff. 7 All data for China excludes Hong Kong, which is shown separately.

17 17 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT KEY FINDING With small businesses using social media being more likely to grow, the large-scale adoption of social media by Indonesia s small businesses is a competitive advantage that should help generate future growth.

18 18 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT JOBS AND SMALL BUSINESSES Reflecting strong business conditions, over seven in ten of Indonesia s small businesses plan to increase their headcount in Small businesses that plan to increase employee numbers in the next 12 months by market 8 Indonesia Vietnam 66.1% 71.2% China 55.2% Malaysia 46.8% Hong Kong Singapore 27.7% 32.8% New Zealand Australia 16.7% 19.9% 8 All data for China excludes Hong Kong, which is shown separately.

19 19 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT Relationship between jobs creation and business growth, innovation, exporting and e-commerce BUSINESS GROWTH Percentage that expect to increase employee numbers in the next 12 months Expecting to grow in the coming 12 months NOT expecting to grow in the coming 12 months INNOVATION Definitely expecting to introduce a new product, service or process unique to their country or the world NOT expecting to introduce a new product, service or process unique to their country or the world EXPORTING Expect to grow export revenue strongly NOT expecting to sell into overseas markets

20 20 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT E-COMMERCE Expect to grow their e-commerce presence to a large extent NOT expecting to grow their e-commerce presence The increase in the number of Indonesian small businesses that are expecting their business to grow in 2016 from 2015 is having a positive impact on jobs, with 71.2 per cent of small businesses planning to increase employee numbers in the next 12 months. Other factors contributing to this very healthy jobs growth projection is the very strong focus on innovation, e- commerce and exporting by Indonesia s small businesses. Over the next 12 months, businesses that expect to increase employee numbers are also significantly more likely to: intend to significantly increase their e-commerce presence strongly grow their revenue from overseas sales innovate through definitely introducing a new product, service or process. Small businesses are also more likely to expect to increase employee numbers over the next 12 months if: the business is in the manufacturing, accommodation or food services industries the business has between 5 and 19 staff the respondent is aged under 40. KEY FINDING Indonesia s small business sector should continue to be a large creator of jobs.

21 21 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT BUSINESS AND ECONOMIC CONDITIONS Growth prospects for Indonesia s small businesses in 2016 remains very high. Small businesses that grew over the past 12 months by market 9 Indonesia Vietnam China 57% 63% 70% 34% 26% 8% Malaysia Hong Kong Singapore 51% 49% 55% 9% 12% 14% New Zealand 41% 15% Australia 32% 13% Grown A Little Grown Strongly Small businesses that expect their business to grow in the coming 12 months, 2009 to 2015 by market 100% 90% 80% 70% 60% 50% Vietnam Mainland China Singapore New Zealand Malaysia Indonesia Hong Kong Australia 40% 30% All data for China excludes Hong Kong, which is shown separately.

22 22 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT Small businesses that expect their local economy to grow over the next 12 months, 2011 to 2015 by market 100% 90% 80% 70% 60% 50% 40% Australia Hong Kong Indonesia Malaysia New Zealand Singapore Mainland China Vietnam 30% 20% Small businesses from Indonesia are the second most likely to expect their business to grow in the next 12 months, with over nine in ten (92.5 per cent) expecting to grow, a 10.2 percentage point increase from their forecast for 2015 and well above the survey average of 70.7 per cent. Small businesses in Indonesia were also the second most likely to expect their local economy to grow, with over eight in ten (83.7 per cent) expecting Indonesia s economy to grow in the next 12 months, a 5.4 percentage point decrease from their forecast for 2015, but well above the survey average of 61.1 per cent. Both of these forecasts demonstrate the resilience of Indonesia s small business sector in the face of a range of external pressures including China s slowing growth (although it remains very robust), uncertainty over US interest rates, weaker commodity prices, and weaker than expected recoveries in the economies of the US, Japan and the euro area. Small businesses that expect to innovate, grow their e-commerce presence to a large extent and strongly grow revenue from exports are significantly more likely to expect their business to grow in the next 12 months. In addition, small businesses are more likely to expect to grow if: they have between 5 and 19 employees the respondent is aged under 50 the business reported growing in the past 12 months. Further, small businesses are more likely to expect their local economy to grow if: they have between 5 and 19 employees they are in the manufacturing, property or construction sector the respondent is aged under 40.

23 23 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT KEY FINDING Confidence amongst Indonesia s small businesses in 2016 is very high despite external pressures.

24 24 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT ACCESSING FINANCE Access to finance remains relatively easy for Indonesia s small businesses. Access to finance the percentage that experienced easy to very easy financing conditions in the previous 12 months Indonesia 60.6% Indonesia 56.3% China 59.3% New Zealand 53.7% Australia 54.3% Australia 48.1% New Zealand 50.0% China 33.4% Hong Kong 43.5% Malaysia 32.3% Singapore 34.1% Vietnam 32.0% Malaysia 31.8% Singapore 30.9% Vietnam 29.7% Hong Kong 29.9% Access to finance remains significantly more likely to be easy than difficult for Indonesia s small businesses. These relatively easy financing conditions could be having some impact on the demand for finance, with 86.3 per cent of small businesses requiring funds from an external source in 2015, up from 78.4 per cent in The Australian and New Zealand results, however, demonstrate that relatively easy access to finance does not necessarily translate into increased demand for finance. Banks are the most popular source of finance for Indonesia s small businesses, followed by investors. Indonesian small businesses are the most likely to source finance from an investor. The Indonesian paradox of borrowing for both growth and survival continues to be evident in this survey. Indonesian small businesses are among the most likely to have borrowed for growth and the most likely to have borrowed for business survival. In contrast, fellow high-growth nation Vietnam is also highly likely to have borrowed for growth over the past 12 months but the least likely to have borrowed for survival. KEY FINDING Access to finance remains relatively easy for Indonesia s small businesses, which may be helping to fuel business growth. 10 All data for China excludes Hong Kong, which is shown separately.

25 25 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT SMALL BUSINESS AND THE ASEAN ECONOMIC COMMUNITY The ASEAN Economic Community expected to have a positive influence on small business across the ASEAN region. Expected impact of the creation of the ASEAN Economic Community on small businesses in Indonesia, Malaysia, Singapore and Vietnam 13.4% Very positive 50.0% Positive Small businesses in Indonesia, Malaysia, Singapore and Vietnam are most likely to expect the establishment of the ASEAN Economic Community (AEC) to have a positive impact on their business. Small businesses in Indonesia and Vietnam are especially positive about the AEC, while Singaporean small businesses were the most likely to believe it will have no impact or that it is too early to tell. Larger small businesses, manufacturing businesses and businesses that were established between five and ten years ago are the most likely to see the formation of the AEC as having a positive impact on their business. Businesses that are expecting strong growth in export revenue over the coming 12 months are also significantly more likely to state that the AEC will have a very positive impact on their business. Very few businesses think the AEC will have a negative impact on their business, while some are still undecided. KEY FINDING The ASEAN Economic Community is a positive initiative for businesses across the ASEAN region and should improve business and economic performance for member nations.

26 26 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT APPENDICES INDONESIA DATA SNAPSHOT Business and economic growth Small businesses that expect their business to grow - Indonesia against survey average Indonesian small businesses that expect their business to grow against small business growth expectations for Indonesia's economy 90% 90% 70% 50% 30% % 50% 30% Survey average Indonesia Expect local economy to grow Expect their business to grow 2015 Rank Rank survey average Businesses that grew in the last 12 months 91.2% 1/8 76.0% 1/8 68.2% Businesses that expect to grow in the next 12 months Businesses that expect the local economy to grow in the next 12 months 92.5% 2/8 82.3% 1/8 70.7% 83.7% 2/8 89.1% 1/8 61.1%

27 27 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT Business activity over the past 12 months 2015 Rank Rank survey average Increased employee numbers 66.3% 1/8 48.9% 2/8 33.1% Improved business management had a major positive impact on their business Increasing costs had a major negative impact on their business 33.3% 2/8 N/A N/A 25.4% 36.9% 5/8 N/A N/A 39.0% Required funds from an external source 86.3% 1/8 78.4% 3/8 59.9% Found it easy or very easy to access external finance 60.6% 1/8 56.3% 1/8 47.6% Sought external funds for business growth 64.0% 2/8 52.0% 5/8 56.3% Planned business activity over the next 12 months 2015 Rank Rank survey average Expect to increase employee numbers 71.2% 1/8 69.4% 1/8 41.8% Definitely expect to introduce a new product, service or process unique to their country or the world Expect to grow their e-commerce presence to a large extent Expect revenue from overseas markets to grow strongly Expect to significantly increase spending on marketing and promotion Expect to grow their investment in assets strongly 45.8% 1/8 N/A N/A 22.0% 86.3% 1/8 N/A N/A 32.2% 57.8% 1/8 N/A N/A 19.1% 49.7% 1/8 N/A N/A 22.8% 64.1% 1/8 N/A N/A 23.1% Definitely will seek external funds 45.8% 2/8 25.9% 4/8 29.2% Expect easy to very easy access to finance 59.7% 1/8 54.8% 1/8 43.3% Expect to seek external finance to fund growth 62.7% 2/8 56.0% 5/8 59.7%

28 28 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT Social media and e-commerce 2015 Rank Rank survey average Earned revenue from online sales 93.8% 1/8 96.5% 1/8 68.9% Used social media for business purposes 96.0% 3/8 98.1% 1/8 81.4% ASEAN Economic Community Creation of the ASEAN Economic Community will have a positive impact on their business 2015 Rank survey average 84.0% 1/4 63.4% Demographics 2015 Rank Rank survey average Business is 10 years old or younger 75.2% 2/8 58.6% 6/8 65.6% Respondent is aged 39 or younger 79.4% 2/8 61.9% 4/8 53.3%

29 29 THE CPA AUSTRALIA ASIA-PACIFIC SMALL BUSINESS SURVEY 2015 INDONESIA REPORT ABOUT THE SURVEY The CPA Australia Asia-Pacific Small Business Survey 2015 is part of a longitudinal annual study of small business conducted by CPA Australia since This report presents a cross-market comparison between the eight markets surveyed and, where applicable, a comparison of results from 2009 onwards. The survey was conducted between 24 September and 14 October The mainland of China and Vietnam were included in the survey for the first time in Indonesia and New Zealand were included in The survey in the mainland of China was conducted in Beijing, Chongqing, Guangzhou and Shanghai. All data for China excludes Hong Kong, which is shown separately. Interview method In each market, the online survey was conducted amongst a random sample of small business owners/managers. The sample was obtained through online panel provider Research Now and their Asian panel partner ipanelonline. To qualify for the survey, participants were required to be an owner, a senior manager (defined as being a director, a principal, a CEO, a CFO, a senior manager or a managing director) or a qualified accountant of a business with fewer than 20 employees. Sample In total, 2932 participants completed the survey, including 510 from Australia, 610 from the mainland of China, 265 from Hong Kong, 306 from Indonesia, 310 from Malaysia, 311 from New Zealand, 310 from Singapore and 310 from Vietnam. Of the 610 participants from the mainland of China, 155 were from Beijing, 152 were from Chongqing, 147 were from Guangzhou and 156 were from Shanghai. Questioning Questions on small business confidence, employment, social media, costs and access to finance were drawn from previous surveys. Some slight modifications to question wording were made to a number of those repeated questions. Questions on innovation, major influences on the business environment, e-commerce, spending on marketing and assets and exporting are new in this survey. Questionnaires in Australia, Singapore and New Zealand were administered in English. The Hong Kong questionnaire was administered in traditional Chinese, the questionnaire for Malaysia was administered in both English and Bahasa Malaysia, Indonesia s questionnaire was administered in Bahasa Indonesia, China s questionnaire was administered in simplified Chinese, and Vietnam s questionnaire was administered in Vietnamese. Rounding All percentage results shown in this report have been rounded.

30 29 cpaaustralia.com.au