More voices have joined the call for increased entrepreneurship in Indonesia. This time it’s Bedjo Sujanto, chancellor of Jakarta State University (UNJ) saying the country’s education system doesn’t instill in its students the values necessary to become entrepreneurs, despite some improvements in government support in the last few years.
A representative of the Ministry of Education estimated that only 0.5% of Indonesia’s 240 million people could be classified as ‘entrepreneurs’ (operators of businesses with around 20 employees). This compares with 7% in the United States and 6% in Singapore, who have long understood small business’ integral contribution to economic development. Chancellor Bedjo also mentioned that of Indonesia’s 0.5%, only 30% were university graduates.
The value of university degrees and government plans to entrepreneurship growth is debatable. Comments on the article in the Jakarta Globe suggest Indonesia is teeming with sole traders and street vendors who definitely don’t lack an entrepreneurial spirit, but don’t have the opportunity to grow their businesses beyond the micro level thanks to corruption and other barriers.
The government, for its part, has promoted the teaching of more practical vocational skills at high schools and universities, raising the entrepreneurship rate from 0.3% just a few years ago. It launched the KUR (People’s Business Loans) Program in 2007, offering loans of up to Rp 500 million (US$56,000) with risk shared by the government. Operated through six government-appointed banks, the program has been criticized for being too inaccessible to the businesses it could benefit.There is also the PNPM (National Program for Community Endowment) which distributes funds to 4,805 local districts around the country.
Both Chancellor Bedjo and Prasetyantoko, an economics analyst at Atma Jaya University, say the government plans and educational improvements aren’t changing the situation fast enough. The government’s target is a 4% entrepreneur population by 2014, but at current growth rates, it’s more likely to be 1-2%.