Developing Small Business in West Papua

The Importance of Developing Small Business

WestPapua has abundant natural resources, such as gold mines, palm oil plantations, and tourism. However, on the other hand, West Papua also has a high poverty rate. Therefore, developing small businesses in West Papua can be one solution to reduce poverty in the province.

What is Small Business?

Get to Know Small Business

Small businesses refer to enterprises characterized by their limited scale and capital. Individuals or small groups who possess limited capabilities in managing commercial endeavors typically own and operate these businesses. Small businesses encompass various types, such as trading businesses, service businesses, and production businesses [1].

The Current State of Small Businesses in West Papua

The government has been providing financing for micro, small, and medium enterprises (UMKM) in Papua Barat to help them recover from the economic impact of the COVID-19 pandemic. 

The available data also shows that the financing for UMKM in Papua Barat has been increasing over the years, indicating the high hopes of UMKM entrepreneurs in obtaining easy and fast business capital to recover from the economic downturn.[2]

However, the distribution of UMKM financing is still dominated by areas with relatively more advanced economies, indicating the need for more optimization of UMKM financing to increase the economic growth rate in the region and to help more ultra-micro communities in all districts in Papua Barat. 

Small Businesses Potential in West Papua

Developing Small Business in West Papua

West Papua possesses abundant natural resources, including gold mines, palm oil plantations, and tourism.[3] These resources present opportunities for the development of small-scale businesses in the region. Various types of small businesses that could thrive in West Papua are as follow:

1. Trading Businesses

Firstly, trading businesses offer a straightforward path to development. Such businesses could encompass grocery stores, clothing boutiques, or general merchandise stores. Entrepreneurs can initiate trading businesses with limited capital and operate them conveniently from home. Furthermore, the utilization of appropriate transitions can enhance the flow of ideas.

2. Service Businesses

Additionally, service businesses are another viable option that can be established with limited capital. These businesses may involve laundry services, car wash facilities, or electronic repair shops. Similar to trading businesses, service businesses can be run with minimal financial investment and managed from the comfort of one’s home.

3. Production Businesses

Furthermore, production businesses are those involved in creating goods or providing services. These enterprises could be handicraft businesses, food and beverage establishments, or agricultural processing ventures. Production businesses typically require more significant capital compared to trading or service businesses.

Strategies for Developing Small Businesses in West Papua

Strategy for Developing Small Business in West Papua

So, how to grow a small business into a large business? To develop small businesses in West Papua, the right strategy is needed. Here are some strategies that can be done to develop small businesses in West Papua:

1. Improving Product or Service Quality

Firstly, improving product or service quality is one strategy that can be done to improve the competitiveness of small businesses in West Papua. Good product or service quality will satisfy customers and return to buy the same product or service.

2. Increasing Promotion

Then, one strategy to increase sales of products or services is to promote them actively.  Promotion can be done by using social media, brochures, or banners. [3] Good promotion will make products or services more known to the public.

“Developing small businesses in West Papua, utilizing the region’s abundant natural resources, is a potential solution to alleviate poverty.”

3. Improving Skills and Knowledge

Additionally, improving skills and knowledge is one strategy that can be done to improve the quality of products or services. Good skills and knowledge will make small businesses more professional and can compete with other small businesses.

4. Increasing Access to Capital

Finally, increasing access to capital is one strategy that can be done to develop small businesses in West Papua. Sufficient capital will make small businesses grow faster and can expand their market reach.


Developing small businesses in West Papua can be one solution to reduce poverty in the province. Utilizing the abundant natural resources in West Papua enables the development of small businesses. To foster the growth of small businesses in the region, it is essential to employ appropriate strategies, including enhancing product or service quality, intensifying promotional efforts, refining skills and knowledge, and expanding access to capital.