- The failure rate is high especially with entrepreneurs in the early stage
- Entrepreneurs need success stories, role models, and mentors
THE number of entrepreneurs in Indonesia has increased significantly in the past decade. Data from the Central Statistics Agency (BPS) shows that there were 26.7 million entrepreneurs in 2016 compared to 22.7 million in 2006, mainly thanks to the flourishing digital sector in the past five years.
While these statistics are positive, growing and maintaining the number of entrepreneurs is an issue the country needs to address.
“The failure rate is high especially with entrepreneurs in the early stage. However, once they enter the scale-up level, the failure rate is narrowing, but the number of entrepreneurs is also smaller,
“Entrepreneurship has been the new growth catalyst for Indonesia, and this can only happen once we have strong and impactful entrepreneurs who are not afraid of aiming big,” says head of Indonesian Creative Economy Agency (Bekraf) Triawan Munaf.
Speaking with Digital News Asia (DNA) at the sidelines of Endeavor Indonesia’s Scale-Up Asia 2017 event in Jakarta, Triawan adds that building the quality rather than quantity of entrepreneurship should be the focus of government right now, as good quality entrepreneurs can improve the country’s resiliency.
“We need to support entrepreneurs that are in the scale-up level so they have what they need to grow. They mainly need more mentorship, access to various networks, aside from funding, as well as technology skillsets. Remember whatever your sector is, you need to be digitally savvy in this day and age,” he says.
The leading indicator for quality and impactful entrepreneurs is the number of employment opportunities an endeavour creates, not only low-level jobs, but also high-value jobs. It must have a significant impact on the community, as well as inspire other entrepreneurs to follow suit.
Collaborating with non-profit organisation Endeavor Indonesia, Bekraf is hoping to improve the success rate of entrepreneurs in the country by providing them access to mentorship and a global network.
Globally, Endeavor has 1,400 entrepreneurs from 880 companies, which has created 600,000 jobs, and in total has generated US$8.16 billion in revenue in 2015-2016. In Indonesia alone, Endeavor has screened around 2,000 companies and selected 35 entrepreneurs from 28 companies.
“What we want to create is a high-impact entrepreneurship, those who are going to employ 500 people, those who wants to serve the people, those who wants to go to other cities not limited to big urban cities only, those who will make a difference in the economic scale for the country.
“We need more of these entrepreneurs to create sustainability in the country’s economy, to compete with global brands, and to win the market. Our goal is to push more entrepreneurs to scale so that they can be more impactful,” Endeavor Indonesia founding board member Husodo Angkosubroto says.
Endeavor aims to increase the number of jobs created by its companies to two million, with a total revenue of US$20 billion, and US$2 billion equity capital raised by its entrepreneurs by 2020.
In order for entrepreneurs and potential entrepreneurs to aim big, they need role models, success stories, and inspiration, Husodo says.
“When we have success stories, and role models, we bring the fact that being impactful is attainable and possible. The next step is to provide the mentorship for these entrepreneurs to achieve that level and to grow bigger.
“Most Indonesian small and medium business players are very comfortable being small and lack the aspirations to scale to a large organisation. We need to change that by giving them more role models to look up to,” he adds.
He argues that while numbers of SMEs is important for the country, strong and robust entrepreneurs who can create 500 jobs are more important as they brings more impact to the country.
This year’s Scale-Up Asia brings together 150 mentors from various industries and expertise from Indonesia, Singapore, and Malaysia as well as 500 entrepreneurs in a speed mentoring session in which covers five main topics such as marketplace and e-commerce, sales, talent management, branding and marketing, as well as finance and fundraising.
“We believe that high-impact entrepreneurs can generate a virtuous cycle of entrepreneurship, which in the long run will lead to Indonesia’s sustainable economic development.
“Scale-Up Asia is here to serve as a platform in creating a stronger culture of high-impact entrepreneurship and build a stronger entrepreneurial ecosystem,” says Endeavor Indonesia board chairman Harun Hajadi.
Supporting the Endeavor Indonesia Scale-Up Asia 2017 and the year before, Maybank Indonesia’s chief executive officer Taswin Zakaria concurs with Triawan and Husodo, saying that high-impact entrepreneurs can help accelerate financial inclusion in the country.
“When the SMB players become bigger and employ many people, they become bankable; they will need financial products and support more than before, they will need loans, hence they will become the next customers of the financial institutions.
“Rather than going one by one to each customer, once Indonesia have more high-impact entrepreneurs, they will become bank’s best channel to reach the unbankable people of Indonesia, every employee can be bankable, they help push the financial inclusion agenda,” Taswin explains.
Taswin who is also participating as a mentor in the speed mentoring session says that there are tons of ideas generated from the entrepreneurs, however excitement and innovation are not enough to build a sustainable business.
“This is the value of mentorship becomes precious. Entrepreneurs need advice in the financial and operations sector that can be filled by senior professionals, who were trained to prioritise sustainability/
“The key to high-impact entrepreneurship is also figuring out how to be sustainable and to keep the business running with minimum capital injection. With mentorship we can improve the number of successful entrepreneurs,” he concludes.
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