Entrepreneurship indonesia
- 1. Entrepreneurship in the Context of Indonesian National Development Rama Manusama
- 6. Entrepreneurship ??? No consensus on definition Persons who are ingenious and creative in finding ways that add to their own interest (Veblen, 1904) Own interest could be wealth, power, prestige, or mental satisfaction Persons who take risks in the name of an idea , spending much time as well as capital on an uncertain venture (Knight, 1921; Drucker, 1970) In this session, let’s narrow down the definition of entrepreneurs to business entrepreneurs only
- 7. A (very) simplified model Natural Resources Entrepreneur Value-added goods Human Resources Capital Entrepreneurs mix resources and use them to create value
- 8. Importance of Entrepreneurship in the Indonesian context
- 9. Indonesians always complain about this High unemployment 9 million documented 2 million have university education Low wages Average National Minimum Wage Rp. 414,500 Average Starter Wage in Jakarta, with University Education ~ Rp. 3mln p/m Low wages are necessary to keep unemployment under control
- 10. Adding value = job creation Too many people competing for too few available jobs!! Indonesia has abundant natural and human resources, but lacks entrepreneurs and access to capital In 2008, entrepreneurs only accounts for 0.18% of total population (Source: Ministry of Small Business and Cooperatives) The United Nations recommends at least 2% More entrepreneurs are desperately needed to create jobs Are we lacking entrepreneurs?? Natural Resources Human Resources Entrepreneurs Value added goods
- 11. Another look into entrepreneurship However, when incorporating the informal sector, it is documented that in 2006, 16.3% of Indonesian people in productive age At a glance, there are ~16.2% gap between “informal” entrepreneurs and formal ones This would imply two things: Entrepreneurial spirit already exists somehow But most of them lack the ability to innovate and add significant value What is missing??? What do you think??
- 12. The missing entrepreneurial mindset: value creation Ciputra: I soon realized what was missing from our education system. We don't teach entrepreneurship. In more than fifty years in business, I learned not only how to emerge from poverty, but also how to generate wealth and create prosperity. “ I call entrepreneurship the ability to turn dirt and scrap into gold.” Do you remember what they taught us at school??
- 13. In other words, entrepreneurs have to aspire to make impact Entrepreneurship must include opportunity creation, innovation , and calculated risk taking (Ciputra) In this context, value creation comes from innovation Informal entrepreneurs already have the foundation, but it is driven by necessity not opportunity Natural Resources Human Resources Entrepreneurs Value added products Capital + = What is innovation?
- 16. Innovation Change in the thought process for doing something or "new stuff that is made useful“ – a contrast to invention (McKeown, 2008) Types of innovation according to Schumpeter New product / new quality of product New method of production / better method of production Opening of new market Conquest of new supply of raw materials The carrying out of new organization
- 17. Stages of development according to Global Entrepreneur Monitor Stage 1 - Factor-driven economies Stage 2 - Efficiency-driven economies Stage 3 - Innovation-driven economies Do we have to wait until stage 3 to start innovating intensively?
- 18. Simple, cheap product, high value Affordable and valuable for these people
- 19. How about this?
- 20. Innovation to prevent ecological degradation
- 21. As long as the world remains imperfect, there is always room for innovation
- 22. The Innovative Entrepreneur has to be Passionate and Strongly Motivated There is something more in entrepreneurship, which is to make meaning (Guy Kawasaki) Although sounded romantic, companies set out to make meaning tend to be more successful Steve Jobs – motivated to increase the quality of life of the users Bill Gates – motivated to take the computer to every single household Profit is the reward for a successful value creation By believing in something strong, the entrepreneur is more likely to withstand difficult obstacles
- 23. Most probably, these guys only care about making money
- 24. You don’t have to be Bill Gates “ Celebrity Entrepreneurs” only account for minority of all entrepreneurs There are many unknown “everyday entrepreneurs” who successfully make a difference 12% of the American working force are entrepreneurs, 9% claim to be driven by opportunity not necessity (Kaufmann Foundation, 2003) We never heard of them, but they seize new opportunities
- 25. Innovative Entrepreneurship is on the rise in Indonesia
- 26. Conclusion Entrepreneurship is about creating value by implementing ideas and taking risk Innovation is a key factor in value creation Indonesia needs more entrepreneurs Start planning your venture !!