Understanding Indonesian Entrepreneurship through Foreign Eyes and Paradigms

What does it take for a student to get from being a clueless freshman to the next Steve Jobs? How big a role does the academe play in nurturing an entrepreneurial mindset among the youth? Sadly, in Indonesia, the world’s largest island country, only 400,00 of the country’s 250 million people are innovation-driven entrepreneurs (IDEs).

While the government and venture capitalists surely play a part in creating infrastructure supportive of business, there is a unique relationship between the corporate sector and universities. While there are more and more universities that are focusing on raising the new generation of innovators and start-up stars, Indonesia is weighed down by an education system with blinders: a bias for memorization-based “learning” and an emphasis on acing exams. An entrepreneurial spirit is, most of all, taught. Indonesian schools are starting to take the hint. They’re paying attention to the business landscape and training the next generation accordingly.

What follows is an excerpt from an essay written by Alanna Hughes of the Harvard Kennedy School of Government and the MIT Sloan School of Management, who joined the Asia Leadership Fellowship Tours in 2015. In Rethinking Asia 2: Entrepreneurship and Economic Development, she talks about her insights into Indonesia’s enormous potential for economic growth and how a younger generation of entrepreneurs can succeed only when the government, corporation, the academe, and venture capitalists work together to provide a healthy entrepreneurial ecosystem.  

 

Corporate and University

In our four, jam-packed days in Jakarta, we Trekkers managed to visit two large corporations that shape media and energy in Indonesia and one university just outside the capital. While our conversations at these places did not focus directly on innovation-driven entrepreneurship, our discussions, encounters with current leaders and students, and immersion in their offices and campuses enabled me to find many sources of connection with Indonesia’s entrepreneurs.

SCTV and MedcoEnergi are two vastly different Indonesian enterprises. SCTV—Surya Citra Televisi—has become a major Indonesian TV channel since its founding in 1990. Its parent company, Emtek, is the second largest media group in Indonesia; it runs this channel, provides media consulting and media communications services to other companies, and manages “Solutions” and “Connectivity” business divisions that covering everything from infrastructure to retail services.4 MedcoEnergi, on the other hand, is a publicly listed Indonesian oil and gas company founded in 1980. Given the two companies’ differences, I was surprised to find commonalities in terms of what they could offer to the growing entrepreneurial ecosystem.

Stepping into each posh, modern high-rise in Central Jakarta, I realized that these companies each provided an example of the scale to which new entrepreneurs should aspire. In the decades that they have been in existence, the two have succeeded in becoming highly profitable leaders in their respective industries, on a national and international scale. Whether sitting in the brightly lit recording studios at SCTV or chatting over dinner with MedcoEnergi’s executives, who had flown in from all over the archipelago, I sensed the depth of resources and expertise that each of these companies can provide to those who are just starting out.

To date, these companies have engaged with entrepreneurs of varying scales; for example, MedcoEnergi provides micro-financing to small-scale companies as part of its sustainable growth strategy, and SCTV made a series-B investment in a local online marketplace, BukaLapak, just last month. Each of these two companies possesses the potential to be a powerful investor in new ideas. Additionally, both of them could take another step to mentor and incubate new ventures that crop up in their own industries. Although this may sound like breeding competition, it might in fact have the opposite effect: MedcoEnergi and SCTV could help entrepreneurs grow businesses that relate to their core competencies, with the hope of eventually acquiring them, forming a joint venture, or contracting their services. This is just the tip of the iceberg for Indonesia’s lucrative corporations, which have the privilege of viewing society from the top.

 

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When I stepped onto the grounds of Universitas Pelita Harapan (UPH)—although the campus was clean, green, and located well outside the chaos of the city center—I could still sense the familiar bustle of ambition and excitement emanating from the students who rushed among the class-buildings, athletic facilities, and student center.

Through our half-day conference for young adults, I hoped to pinpoint the degree of entrepreneurial spirit existing in the student body. As it turned out, in such a short amount of time the level of enthusiasm was tough to gauge; nevertheless, I attempted to read between the lines whenever possible. During our keynotes and panels, UPH’s students impressed me with their challenging questions—they were certainly thinking creatively about the problems they observed. When we divided into smaller groups for a series of workshops, I chose to shadow a friend running a session on social entrepreneurship. Seated in a stiff desk at the back of a classroom, I listened as the students came up with their own ideas for social ventures. Chatter buzzed as the participants collaborated in small teams to come up with concepts that met needs they cared about. Yet, when it came time to present their solutions in front of the room, most sat silently, their hands glued to their sides and their eyes focused anywhere but on the facilitator.

This seemingly counter-intuitive combination of eagerness and reluctance encouraged me to conduct more research on Indonesia’s entrepreneurship pedagogy. Although I cannot claim to be an expert on UPH, I noticed when reading through their course descriptions online that they embrace “entrepreneurial spirit” as part of the curriculum. From the descriptions, however, it appears that most of this “spirit” is focused on family businesses as opposed to larger-scale IDEs. Based on my reading on Indonesian learning approaches, I surmise that campuses need to encourage more “outside the box” thinking; Indonesia has received criticism for “teaching to the test” and favoring rote learning and memorization over problem-solving.

One potential model for overcoming this restrictive system was created by a successful entrepreneur named Ciputra, a sort of Indonesian Donald Trump who has launched a university for entrepreneurship in Surabaya called “Universitas Ciputra.” Convinced that Indonesian universities tend to train students to be employees rather than entrepreneurs, Ciputra aspires to assist pupils in starting high-growth, innovative companies. His approach is one that I believe could be woven into the curriculum of most academic institutions; At MIT, for example, we foster innovation, R&D, and venture creation through a holistic set of offerings: not just classes but business-plan competitions, seed funding, accelerators, venture-mentoring advisors and services, technical-skill building, and assistance in team formation. These opportunities—and a population of solutions-oriented students that tend to take risks and think creatively—generate a culture of hacking, iteration, and trial and error until success is reached.

Indonesia is starting to develop each piece of this educational puzzle in isolation. For example, Binus University and Multimedia Nusantara University have both launched technology venture accelerators, and some conferences have already been held to enable stakeholders to collaborate on entrepreneurial curricula development. But there remain ample opportunities to put all of the pieces together, giving students a more complete picture of what it takes to form, launch, and scale an IDE.

Recalling the intent expressions of the students listening while we presented during our conference, I am confident that there is a lot of interest among Indonesian youth in learning new ways to change the world and to obtain financial and reputational prosperity. But, as I learned first in my REAL course at MIT, putting these ambitions into practice requires the collaboration of governments, VCs, corporations, and universities, so that academic-level entrepreneurial ecosystems can feed into the country’s broader economic landscape.

By Alanna Hughes

2018-10-07T20:54:01+00:00