Legal Protection of MSME Data in Government Digitalization Programs as an Instrument for Enhancing National Economic Competitiveness

Abstract

The digital transformation agenda promoted by the Indonesian government through various digitalization programs for Micro, Small, and Medium Enterprises (MSMEs) has generated a substantial accumulation of business-related data, encompassing identity information, transaction records, and financing histories. This development raises a fundamental legal question concerning the extent to which the national legal framework is capable of safeguarding such data against misuse and data breaches. This article aims to examine the scope and adequacy of legal protection afforded to MSME data within government-led digitalization programs and to assess its relevance to enhancing national economic competitiveness. The study employs a normative juridical method using both statutory and conceptual approaches, examining Law Number 27 of 2022 on Personal Data Protection in conjunction with sectoral regulations governing MSMEs and public data governance. The findings indicate that although the Personal Data Protection Law has established the foundational principles of data protection, its implementation within MSME digitalization programs continues to exhibit significant gaps. These include weak accountability mechanisms for data controllers within government institutions, limited legal literacy among MSME actors, and the absence of comprehensive integration of data protection principles into the National One Data policy framework. Therefore, strengthening implementing regulations, enhancing inter-agency oversight, and expanding legal education for MSME actors are essential to fostering digital trust, thereby contributing to the improvement of Indonesia’s national economic competitiveness.