Small medium enterprises (SMEs ) has been an active part in various improvements in the economy in a country. Globalization is an era that is inevitable. Today, all nations are competing to be the leader in the era of competition. One way is to create competitiveness through the implementation of Knowledge Management in SMEs . To go on such a needed institution building measures approach towards SMEs to understand the problems of the mastery of knowledge to businesses, especially those related to knowledge management efforts.

1. Knowledge Management for Small and Medium Enterprises
to Win the Competition on the Knowledge Economy Era:
Case of SME Knowledge Management Model of KADIN Tasikmalaya
Djadja Achmad Sardjanaa, Asep Sufyan Tsaurib
a
Informatics Department, Faculty of Engineering, Widyatama University, Bandung
E-mail : djadja.sadjana@widyatama.ac.id
b
COMLABS-USDI, Institut Teknologi Bandung
E-mail : tsauri28@comlabs.itb.ac.id
ABSTRACT
Your paper abstract should convey the importance of your research in a concise and logical manner. The
abstract is a synopsis of the original study that addresses the research problem, the information and
methods used to address this problem and your conclusions. It should present only key points without
exceeding a length of 200 words. The use of technical jargon and the citing of references should be
avoided.
Keywords
Knowledge Management, Small Medium Enterprise, Knowledge Economy, Competition
1. INTRODUCTION
Small medium enterprises (SMEs) has been an active part in various improvements in the economy in a
country, not only in Indonesia, but also in developing countries. The SME has helped people become
prosperous through the provision of jobs, trade transactions, the creation of added value for consumers
households as well as contribute in increasing revenue through paid area.
However, problems often arise that hinder the development of SMES and pertumbungan. These problems
come either from outside or from within the SMES themselves. One of the problems in the internal
environment of SMES is the limitations of the mastery of knowledge.
In addition, the existence of SMES are increasingly threatened when large companies through quality
products and high competitiveness of power with the bid price to enter the market in Indonesia.
Thus required a solution that can also simply to confront this challenge. One way is to create
competitiveness through the implementation of Knowledge Management in SMES. According to Kosasih
and Budiani, this along with the opinion of the Priambada that Knowledge Management can improve the
performance of an enterprise through a culture of knowledge sharing.
2. BASIC CONSIDERATION OF KNOWLEDGE MANAGEMENT MODEL
Globalization is an era that is inevitable. Today, all nations are competing to be the leader in the era of
competition. Talk about competition between Nations, of course each nation is required to have high
competitiveness. Nations that have high competitiveness was marked by the ability of the human resources
(HR) a reliable, high knowledge mastery, and mastery of the global economy.

2. Based on the Global Competitiveness Report (2006) issued by the World Economic Forum (WEF),
Indonesia was ranked 50th. We compare with some neighboring countries, Singapore (5), Malaysia (26)
and Thailand (35).
Based on the Human Development Report (2006) issued the UNDP, the position of Indonesia in terms of
the quality of HUMAN RESOURCES (human development index) is ranked 108th of 177 countries.
Compare with some neighboring countries, namely Singapore (25), Brunei Darusallam (34), Malaysia
(61st), Thailand (74), Philippines (84), Viet Nam (109), Cambodia (129), Myanmar (130), Laos (133), and
Timor-Leste (142). The Data shows that the competitiveness of Indonesia have yet to comply with
expectations. The independence that had lasted more than 61 years have not been able to give prosperity to
the people of Indonesia. This is the result of a bad system.
Small medium enterprises (SMEs) is one of the elements of the nation economy of Indonesia. The amount
of Labor which includes the blue collar workforce (informal) around 70,2 million or 74 per cent (BPS,
2005). The rest is white collar labor (formal), which is about 24.7 million or 26 percent. Most of the
workforce in the agricultural sector (44 percent), followed by trade, housing and hospitality (20 percent),
industrial processing (12 percent) and social and civic services, individual (11 percent).
The size of the workforce in the sector of SMES is not followed by high productivity. In 2003, the amount
of the gross domestic product (GDP) generated by small and medium industries sector only 199 trillion
rupiah with the number of business units as much as 3.02 million and the amount of labor as much as 8,09
million. Compare with major industry that produces GDP amounted to 312 trillion rupiah with the number
of business units only 7593 fruit and labor of 4,39 million.
2.1 Knowledge Management for SME
In General, the problems that often happen on SMEs is capital, marketing, lack of knowledge and human
resources of less quality. In the context of increased competitiveness, the mastery of knowledge are
important factors to boost competitiveness. This is where the greatest weakness of SMES. Low mastery of
knowledge in SMEs affected factors internal and external factors. The internal factor is (1) lack of
awareness and the will to implement appropriate knowledge, (2) the limited capital to improve the mastery
of technology, (3) lack of ability to take advantage of the business world and (4) lack of access to sources
of technology and knowledge.
External factors that affect is (1) the results of research and development are not yet right for SME
development, (2) the process of technology on SMEs not maximum, (3) the limitations of the publication of
results of research and development and (4) the financing is still limited to skim in the development of
science and technology.
The concept of knowledge management is a new concept in the world of business has been applying a
variety of large companies in the world. In principle, the concept of knowledge management aims to
increase profits by improving communication between all parts of the company and improve the mastery of
knowledge with the transfer of knowledge (knowledge sharing).
Knowledge is divided into two types, tacit knowledge and explicit knowledge. Tacit knowledge is
knowledge that is saved in the human brain, for example in mind, memories and others. Explicit knowledge
is knowledge that is outside of the head, e.g. books, journals, documents and others. The concept of
knowledge management attempted to blend and combine the knowledge to improve the competitiveness of
SMEs.
2.2 Coaching sustainable SMEs
The concept of knowledge management can be a solution to improve the mastery of the knowledge of
SMEs. The concept has a broad scope, covering information technology, support from management,

3. culture, strategy and objectives, organizational structure, motivation and HUMAN RESOURCE
management. Its application can be done by analyzing the basic needs of SMEs, mapping the concepts and
objectives, implementation and receive feedback.
Strategy implementation of knowledge management can be done through two approaches, from the point of
external and internal. From the external, the role performed by the Government, i.e. by doing ongoing
coaching, conduct studies appeal against neighboring countries who succeed in developing SMEs, facilitate
the implementation of the transfer of knowledge, providing information technology facilities and help
SMEs in building the network.
The internal approach is the role of SMEs, namely the building networks between SMEs in the fields of a
type (cluster), building a culture of mutual learning, active in fostering HUMAN RESOURCES, provide
support leadership and utilize information technology. The approach of the two sides simultaneously and
continuously will increase the mastery of the knowledge of SMEs.
According to Nonaka and Takeuchi, most corporate Japan has advantages and high competitiveness
because they understand that knowledge is the key to improve innovation. Knowledge must be maintained
(managed), planned and implemented.
SMEs in Tasikmalaya could learn from the application of the concept of knowledge management in Japan.
Currently, the mastery of knowledge is the key to win the competition. Mastery of knowledge can be
realized in the form of technology, working methods and work culture. Increasing the competitiveness of
SMEs will effect against productivity and contribute to the country. With the increasing competitiveness of
SMEs, competitiveness of Indonesia will increasing up.
The direction of coaching model SMEs in terms of institutional of Coaching-Companion (for example
involves a KADIN Tasikmalaya, Dinas Koperasi PKM, other service and may NGO) which capable to
stimulaze, encourage, and facilitate a coaching SMEs from SMEs to the interests of the SMEs themselves.
About its shape may be in the form of Physical and Virtual SMEs Tasikmalaya Community or other form,
which can be called Knowledge Management Agency for SMEs or “Lembaga Manajemen Pengetahuan
UKM” (LMP-UKM). To go on such a needed institution building measures approach towards SMES to
understand the problems of the mastery of knowledge to businesses, especially those related to knowledge
management efforts. Patrons or coach provide the motivation that the best solutions to address the issue of
effort in particular field of knowledge management should be a SMEs units rallied together to resolve the
issue under a form of organisation/institution that they form themselves. The constructor function provides
facilities and assistance in various areas of expertise necessary include early knowledge management
systems for SMEs. The coach also obliged to provide guidance, consultation, advocacy against SMEs
members of either the requested or not. The services this constructor has the right to get coaching fee from
the Fund the project.
2.3 What is knowledge management for SMES will be made
In General, weak competitiveness is a major factor that causes the small medium enterprise (SME) are less
developed in the global market. When we study further, it turns out the problem on a lack of knowledge
that entrepreneurs. Fair enough, because the majority of Indonesia small to medium entrepreneurs in the
education still low.
But as already known, knowledge have very important role in the advancement of the company. The
superior knowledge of a company and its human resources (HR) then will gain the higher competitiveness
of enterprises in the global market. An example is Microsoft's success in becoming one of the Company
Information Technology (IT) in the world. Very proven, that Microsoft is successful because of the power
of knowledge which is owned by the founder and employees. See, Microsoft's share price appreciated by
the community is not calculated on the basis of assets owned, but more because Microsoft has employees
with the knowledge that is above the average of other companies.

4. However, the question now is how effective and efficient in increasing the knowledge in a company? How
much money should be spent to send employees to training institutions, schools, or seminar so that an
increase in knowledge? Then, what if your company has employees who are pretty much? How long does it
take?
Above are some questions commonly asked businessmen and corporate leaders. However, inevitably, the
increased knowledge remains to be done. Because, one of the keys to winning the competition is the power
of employees who are intelligent or knowledge worker. The more intelligent and smart employees in your
company, it will be increasingly easy for company to deal with the change and won the competition. One
interesting solution today is to implement a system that is able to increase the knowledge in the company's
internal called knowledge management system.
In the system of knowledge management, there are at least three processes that should be done. The first is
the process of exploration, i.e. do the mapping in the Organization of knowledge possessed by each
Division/Cluster, whether related to human resources, product, market, and customers. So, it will be easy to
do the search and collection of all the knowledge that the company as well as the knowledge held by each
employee.
Second, The Learning Process. At this stage done to utilize that knowledge to the maximum gain with the
exchange between individuals as well as individually. Or, it could be done through an interactive forum to
share the knowledge online. At this stage, would be created a culture of learning that the longer the more
powerful. Why? Because basically everyone is hungry for information and knowledge. As a result, the
company will be more rich people are powerful knowledge.
Third, the process of searching and creating new knowledge. This stage occurs when there has been a
strong learning culture within the company. And also, a collection of knowledge that previously owned the
company in the system of knowledge management is no longer sufficient. So, everyone in the company
will attempt to search for and find new knowledge. Consequently, a collection of knowledge in the system
"knowlegde management" to be continued at the kernel will be the source of the knowledge of the company
are complete and update or continue to be updated.
3. DESCRIPTION OF THE MODEL
3.1. The conception Model of Knowledge Management for SMEs
Simply, knowledge management is a web-based database system which is useful in managing the entire
knowledge owned by the company/institution and its employees/communities. Clear here is not only a
saving, but also create a culture of learning in an environment of employees through the process of
knowledge exchange. So, it will make easier for employees to conduct learning independently and
facilitate in providing solutions for the problems that it finds itself as well as customer facing. That way,
then the process improvement knowledge across employees not cost great and a long time. And slowly but
surely, the culture of learning will increasingly grow in a corporate/communities environment.
Consequently, the company/institution can confidently compete to be the best.
Seeing from big companies that are successfully implementing knowledge management, arising out of the
question. Whether small medium enterprises (SMEs) need to also apply the system of knowledge
management? How important is it?
The answer is quite simple, it is very important. Why? As we know, one of the causes of the SMEs lack of
competitiveness are high is because the majority of its only JUNIOR and HIGH SCHOOL educated. So,
the ability to compete on a global level to be limited. To that end, increased knowledge for SMEs and the
entire staff became a necessity.

5. Or when using simple logic, when big companies implement knowledge management for the growth of his
company, surely the SME must be more serious in implementing knowledge management. So that SMEs
can make the leap further in order to quickly become large companies. Well, if the company still on the
level of SMEs, then the application of knowledge management would be an interesting challenge.
Especially when there have been many proven would the competitiveness of the company.
From above prerequisite, below is the model conception of Knowledge Management Agency for SMEs or
“Lembaga Manajemen Pengetahuan UKM” (LMP-UKM) developed on the basis of the fact that:
(1) Very large number of SMEs.
(2) Population associated with very large SMEs
(3) Business performance challenges facing SMEs continue to be heavy, especially the ability to
compete
3.2. Purposes of LMP-UKM
Some purposes of LMP-UKM are :
(1) Expanding access to knowledge for SMEs;
(2) Remove the abyss between knowledge of SMES with existing competitors;
(3) Create opportunities for utilizing completely untapped human resources to work;
(4) Unites SMEs which the underprivileged in order to be united to gain business opportunities. In
this way they can find the power of the social and economic;
(5) Avoid the SMEs circle of powerlessness

6. The steps will be commenced to achieve above goals are:
(1) Promotion & Seminar (1 day); The promotion was made the event "Launching Program" and a
description of a KADIN Tasikmalaya as organizers. Seminar material regarding the scope of the
program and when you need to be accompanied by the registration process to follow the program.
(2) Selection; only candidates who have a business idea that prospect who can follow the program
incubator. The results of the selection into the reference implementation for designing training,
market research program strategy and internship program.
(3) Analysis of Participants & design training; The design of the training organized by characteristics
of participants from the results of the selection.
(4) 1st Training, Awareness to start a business; It focuses on the process of judging their self (training
attendee) as an entrepreneur, the clarification of ideas business that will be facing and get to know
potential markets.
(5) Marketing research; After passing 1st Training, participants will conduct market research in
accordance with its business. The results of market research will be made of materials at the time
of the 2nd training.
(6) The apprentice; It would be better in this phase, participants do an internship in a similar effort to
deepen their understanding of the business idea that would be facing.
(7) 2nd Training, Financial and marketing plans; The results of their market research become
reference when drawing up a marketing plan, business management, determine the cost of
production and sales plan, financial plan and costs.
(8) Financial analysis; draft financial plan, in this phase of the process of mentorship is already
running.
(9) 3rd Training, Completing a business plan; Participants complete their business plan include:
financial Plans, working capital needs, decide whether the business can be realized and action
plan. The business plan will be examined by the Committee to determine the form of intervention
that will be given; whether the capital, market access, linkages etc.
(10) Startup Business: participants start effort is accompanied by a process of mentoring based on plan
of their business.
(11) Process Monitoring: done for 4 months since the business running
3.3. The components of the LMP-UKM
Need of some effort to support and encourage the SMEs, especially in the utilization of Knowledge
Management, i.e. by increasing community resources (HUMAN RESOURCES) in order to be intellectually
ready and able to compete, and effectivy of natural resources and human resources so able and have the
competitiveness. One element that is very supportive of the quality of knowledge management is the
utilization of information technology in the company/communities optimally.
As can be quoted from Gauthama (1999), there are four components of knowledge management that can be
described as follows:
(1) The human resources which mastery of knowledge, skills, attitudes, behavior and work ethic;
(2) Technical Devices include machinery and equipment which was created/planned to increase the
value added or productivity;
(3) Organizational Device that allows the improvement of performance and productivity of the
Organization;
(4) Device of information and knowledge related to the technologies applied, among others
concerning the data base (database), which can be used to optimize the achievement of the goals
and targets of the utilization of knowledge and technology.

7. 5. CONCLUSION
To increase information literacy, SMEs need to utilize ICT to enhance the competitiveness of the company,
given in the era of globalization is becoming very competitive arena of competition, and global/worldwide.
Small and medium enterprises (SMEs) should be able to compete in this competition, for it required a
strategy to improve the competitiveness of the company. In order to survive in the era of competition, small
and medium enterprises (SMEs) need to think of a strategy to improve the competitiveness of the company
to get export opportunities as well as other business opportunities.
One of this strategy is to use Information and Communication Technology (ICT), because the utilization of
ICTs for small and medium enterprises (SMEs) can improve the competitiveness of the company to get
export opportunities and business opportunities.
REFERENCES
[1] R. McAdam, R. Reid “SME and large organisation perceptions of knowledge management: comparisons and
contrasts,” in Journal of Knowledge Management, 2001, Vol. 5 Iss: 3, pp.231 - 241
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adoption in the SME sector”. Journal of Knowledge Management, Vol. 9 NO. 3 2005, pp. 64-82.
[3] Nazar Rasheed, “THE IMPACT OF KNOWLEDGE MANAGEMENT ON SME’s”
http://www.knowledgeboard.com/download/2539/THE-IMPACT-OF-KM-ON-SMEs.pdf, accessed Nov. 12, 2011.
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[5] Meliha Handzic, “Knowledge Management in SMEs - Practical guidelines,” in CACCI Journal, Vol. 1, 2006.
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