Indonesia:Digital entrepreneurship leads forward
  • 2023-05-04
  • Entrepreneurship Research Center on G20 Economies
  • Edit
  • Despite the fear and uncertainty looming over global and domestic economic development, there is still optimism that Indonesia can achieve 5.3 percent growth in 2023. Against all odds, the country recovered from the domestic recession caused by the pandemic after a rapid, lockdown-induced digital transformation. Now, a rising number of digital entrepreneurs are ready to spearhead Indonesia’s further economic growth. Indonesia is blessed with a large, young and digitized population to support a growing market of start-ups and investment in the tech sector. The significant growth of the digital economy is also brought about by the rising popularity of e-commerce platforms and online services. In turn, these new digital avenues are readily embraced by a tech-savvy consumer base consisting of young people and an expanding middle class. Transitioning from just selling and marketing their products using digital platforms, the digital entrepreneurs born from this generation are able to leverage new technologies to increase productivity. As a result, digital entrepreneurship is able to boost businesses in Indonesia by automating processes, managing operations in a cost-effective and efficient manner and even creating new job opportunities. In addition, small businesses also benefit from digital entrepreneurship by providing access to the global market, opening up opportunities for growth and an increase in revenue. In a more competitive environment, these businesses are also more likely to be creative and innovate ahead of their peers by developing new products, services and even business models to further Indonesia’s overall economic growth. By unlocking the potential of digital entrepreneurship, Indonesia will be able to diversify its economy, break away from its dependence on the traditional economy and become more resilient to economic shocks, like the pandemic-induced recession. The government has also acknowledged the potential of digital entrepreneurship by actively promoting it. It has launched various initiatives to assist start-ups and stimulate investment in the tech sector, as well as programs that provide training and mentoring to tech talent and aspiring digital entrepreneurs. 

    But despite these promising developments, Indonesia’s digital ecosystem is still fraught with various challenges, including lack of access to funding and investment. Without such access, digital entrepreneurs are unable to grow or even start their businesses. The government and private sector can tackle this problem together by providing early-stage financing, venture capital and other forms of financial support to digital start-ups. Meanwhile, digital entrepreneurs in rural areas are hindered by limited infrastructure and connectivity. Governments need to step in and invest in the development of digital infrastructure and connectivity, starting with broadband internet, data centers and cloud computing services. Another challenge is the shortage of skilled human resources in key areas, such as software development and data analysis. Tech talent can be fostered by governmental programs that teach them the necessary skills and expertise within the local workforce. 

    Indonesia:Higher entrepreneurship prerequisite to become developed nation

    Entrepreneurs must make up at least 4 percent of the population for Indonesia to become a developed country by 2045, Cooperatives and Small and Medium Enterprises (SMEs) Minister Teten Masduki has said. According to the minister, Indonesia's entrepreneurship rate currently stands at just 3.47 percent. Meanwhile, in Singapore, whose population is around 5 million, the entrepreneurship rate has reached 8.6 percent of the total population.

    In Malaysia and Thailand, the rate is above 4 percent, and it is more than 10–12 percent on average in developed countries.

    The minister emphasized that by 2045, when the nation will mark its 100th independence anniversary, Indonesia is predicted to be among the four largest economies in the world after the US, China, and India.

    To push the achievement of the 4 percent entrepreneurship rate, this year, the government is targeting to create 1 million new entrepreneurs so that the entrepreneurship rate can increase from 3.47 percent to 3.95 percent.

    Indonesia: Entrepreneurship hub established in university

    The Cooperatives and Small and Medium Enterprises (SMEs) Ministry is hosting an “Entrepreneur Hub” at Malang Merdeka University (UMM), East Java, as part of an effort to develop students' entrepreneurship ecosystem through workshops and networking. Students are expected to become agents of change by taking up entrepreneurship, which will become a driving force for economic development through the creation of job opportunities, she said. The initiative is also aimed at anticipating the demographic bonus in 2030.

    The “Entrepreneur Hub” program comprises a workshop, field trip, and coaching forum for 150 university students, wherein they will be taken to Malang's small and medium enterprises to learn about business development. The program has also involved 50 SMEs from Malang as well as the Batu Integrated Services Unit for Cooperatives and Micro, Small, and Medium Businesses and its counterpart in Malang district.

  • Partners

  • Global Health Innovation Center (GHIC)
  • World Intelligent Incubation Network (WIIN)
  • National University of Singapore
  • Canada-China Institute For Business & Development
  • TusPark Research Institute for Innovation
  • Cross-strait Tsinghua Research Institute
  • Tsinghua X-Lab

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