Client: Ministry of National Development Planning of the Republic of Indonesia

This study aims to map the Indonesian SMEs in the manufacturing sector and explained the distribution of SMEs based on their performance. Using the criteria of employment and turnover, Indonesia's manufacturing SMEs which perform well are SMEs in office, accounting, and computing machinery; Food products and beverages; Other non-metallic mineral products; Machinery and equipment; textiles; Wood and products of wood except furniture and plaiting materials; Furniture and manufacturing; wearing apparel; and Radio, television and communication equipment and apparatus.

In-depth interviews with SMEs which perform well indicate that the idea of establishing a business is based on educational background, experience, inspiration from other people's business, and an abundance of production inputs at the business location. In the early stages of business establishment most SMEs use their own capital, with the method of marketing products through friendships or family.

It also concluded that there are four factors that support the success of SMEs to expand: the characteristics of entrepreneurs/owners of SMEs, the characteristics of the business/ product, business network, and the business climate. Three impediments experienced by SMEs in the development of business including licensing, access to finance, and information and the ability to access the market.