Entrepreneurship in

Indonesia: Facts & Challenges

Yudha Pratomo, M.Sc., Ph.D.
Rector of Universitas Sumatera Selatan (USS)
Republic of Indonesia
South Sumatera Strategic Regional Location
THAILAND LAOS
Two economic driving forces surrounding South
Bangkok
Ban Mabtapud
CAMBODIA VIETNAM Sumatera:
South
Phn
om
Pen China I. Singapore as the biggest regional hub
Ho Chi Minh
h City
Sea
and key trading partner
Khanon Erawan

Songkhla Bangkot II. Java as the biggest regional market

Lawit
Jerneh
Banda Aceh
Kota Kinibalu
Guntong
Penang Alpha BRUNEI
Lhokseumawe West Natuna
WEST Kerteh Duyong
Natuna Bandara Seri
MALAYSIA

Kuala
Begawan
Bintulu
Area = 91,774.99 km2
Port Klang
Medan Lumpur EAST

Dumai
SINGAPORE Kuching
MALAYSIA
Population = ± 8.05 million
Bintan
Duri

Padang
Batam

450 km
KALIMANTAN
Samarinda
Attaka
Tunu
Bekapai
Economic Growth (2014): 4.68 %
Balikpapan
Jambi

Tj. Api-api
Income per capita (2013): USD 2,170
Banjarmasin

PALEMB A N GPalembang
G rissi k
GDP (2014): USD 17 Billions
Ujung
480 km Java Sea Pa nda n g
SU M B A
WA
CirebonSemarang MADURA
JAKARTA JAVA Surabaya
Bangkalan

BALI
Pagerungan

LOMBOK
4
Indian Ocean
 Energy Resources

• Reserve:22.24 billion Tons (38.45% National)

COA • The Latest Data (2008) : 47.1 billion tons
L (48,45%)
• 2014 Production : 24 Million Tons

NATURAL • Reserve : 19.15 TSCF (12% National)

• 2014 Production: 621.6 million
GAS
MMBTU

• Reserve: 812,960 MMSTB

PETROLE • 2014 Production: 27.3 million
UM barrels

COAL BED • Reserve : 183 TSCF (39%

METHANE National)
(CBM) • (status of exploration/research)

• 1,911 MWe
GEOTHERMA • (status of exploration &
L FS)
Source: Agency of TSCF = Trillion Standard Cubic Feet
Mines and Energy South MSTB = Metric Stock Tank Barrel
Sumatra Province
 Agriculture Resources

RICE • 3,669,587
TON
CORN
• 191,908 TON
RUBBER
• 1,171,859
PALM OIL TON
COFFEE • 2,251,410
TEA TON

COCON • 113,495 TON

UT LOGS • 3,375 TON

BEEF • 50,066 TON

FISH • 4,090,881
TON
SHRI
• 63,342 TON 7
Problems
• Indonesia is still categorized by the World Bank (2021) as a Lower
middle income country (GNI per capita US$3,840)
• Comparison: Malaysia US$10,460 and Thailand US$6,610 (upper
middle income), Singapore US$58,770 and Netherlands US$51,280
(high income)
• South Sumatera is the last ten poorest province economically in
Indonesia (BPS – Indonesia Central Bureau of Statistics)
• Getting worse in Covid-19 pandemic
Challenges
• Contradictory: Rich Country/Province but Poor People
• Malaysia and Singapore don’t have that luxury of natural resources
and big population, but these countries are much more prosperous
than Indonesia based on GNI per capita
• Indonesia is not a country without any natural resources, like some
other poor countries in Middle East and Africa. We have a lot of
natural resources but still the people are not prosperous.
• WHY?
Facts
• The number of entrepreneurs in Indonesia is low (2-3%) compared to
neighboring countries such as Thailand (4.26%), Malaysia (4.74%),
and Singapore (8.76%) - (Source: Indonesia Ministry of Cooperatives
and SMEs)
• Indonesia also has the lowest of Global Entrepreneurship Index score
among Southeast Asia countries
Global Entrepreneurship Index (2019)
(Highest = Best)
Why, What and Who
• Why? Theoretically, in many literatures, entrepreneurship is very
important as an engine of job creation and a catalyst for economic
growth. World Bank (2021) says that, ‘Entrepreneurial activity will drive
economic recovery, as it did following the 2008 financial crisis’.
• Maybe in Indonesia, there are not enough entrepreneurs to exploit and
add value of those resources and deliver to the market nationally and
globally
• What should we do? Increase the number of entrepreneur in Indonesia,
especially in South Sumatera
• Who is going to do it? Government, academic institutions and industries
Government Role: Ease of Doing Business
• Problem: low DB rank and score compared to other Southeast Asia
countries Economy Ease of Doing Business (Global Rank)
Singapore 2
Hong Kong SAR, China 3
Malaysia 12
Taiwan, China 15
Thailand 21
China 31
Brunei Darussalam 66
Vietnam 70
Indonesia 73
Mongolia 81
Philippines 95

• Uncertainty, bribery, dirty and corrupt officers: these are the common
problems when people want to do business in Indonesia.
University Role: Shifting the Paradigm
• Many schools and universities are not preparing students to be
entrepreneurs. They educate student to be labors, not
entrepreneurs.
• Even if someday they will become an employee, it is good to have an
employee with entrepreneurial mindset. It is also good to have
researchers with creative mindset of entrepreneurs.
• Nadiem Makarim, Minister of Education, was GoJek Founder & CEO.
He created ‘Merdeka Belajar, Kampus Merdeka’ concept to be
implemented in universities, which is very much supporting
entrepreneurs.
USS Role: Entrepreneur University
• Not only giving more lectures, courses and webinars on
entrepreneurship, but ‘entrepreneurship is embedded and integrated
in the whole system’.
• Start-up companies as a parameter
• Everything we do, we do it with entrepreneurial mindset.
USS Business Incubator
• To achieve USS vision – Entrepreneur will be a
“Entrepreneur University”. compulsory courses for
students

• USS Business Incubator – Business Incubator

Collaboration with PUM Netherland provide materials,
and UniKL. module and training for
students

• Teamed by USS lecturers and Students can choose their

practitioners. final report (skripsi) –
academic research or
business model/projects
 Universitas Sumatera Selatan (USS)
University of South Sumatera (USS)

Website : https://uss.ac.id

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