Young Man, Where's Your Courage?
Indonesia's entrepreneurship ratio is still low. The "fear of failure" factor is the main obstacle to people's interest in entrepreneurship.
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Five months after receiving his bachelor's degree in International Relations, Muhammad Rayhan (24) boldly established a photo studio in the Ciputat area of South Tangerang, Banten. Prior to that, he had applied for jobs but had not been successful.
After graduating from the Syarif Hidayatullah State Islamic University in Jakarta in August 2023, this person abandoned their desire to become an employee if they were only going to be paid the minimum wage of the city/regency.
There were several job applications that he had sent, from applications to law firms, non-governmental organizations, to medical companies. Even Rayhan had taken the civil service candidacy test to please his mother who believed that the safest job was being a public servant. He also volunteered in several activities.
I thought, if I worked in an office I should be able to provide for my family by now. I just want to remain confident in this business someday,it'sgonna work.
Rayhan dared to enter the business world after meeting a friend who had been running a similar photo studio in Bekasi, West Java for a year. Despite not having graduated from college, the friend had been successful in his business, as evidenced by his profits being able to be used to pay off a car loan. Rayhan and his friend then agreed to start a business named Rumafoto Studio. They converted a rented three-bedroom townhouse into a photo studio.
Every day, without any breaks, Rumafoto serves customers from 10:00 AM to 8:00 PM. As they haven't employed anyone yet, Rayhan himself manages, maintains the studio, and serves customers. This business can now generate between IDR 75,000 to IDR 100,000 per day. When doing well, they can earn up to IDR 700,000 to IDR 800,000 per day. The total monthly income is sufficient for the studio's operational costs, and there is even a leftover of around IDR 2 million that Rayhan can take home.
The marketing is still not optimal, though. (Muhammad Rayhan)
Rayhan is one of the young entrepreneurs who graduated from college. Entrepreneurship in this category is the fastest growing in this country. Processed micro data from the BPS National Labor Force Survey (Sakernas) Team Data Journalism Kompas shows that the growth of entrepreneurs from the college graduate group is an average of 10.4 percent per year during 2007-2022. This figure is higher than the growth of entrepreneurship from lower education groups, namely SMA/equivalent (5.6 percent) and SMP/SD (-0.1 percent).
However, in terms of quantity, the number of entrepreneurs who are college graduates is still small. In 2022, the proportion of entrepreneurs with higher education background is only 5.6 percent compared to the total number of entrepreneurs. The highest proportion is entrepreneurs with an educational background of junior high/elementary school (68.4 percent), followed by high school graduates or equivalent (26 percent).
Among the higher education groups, graduates of education and teaching majors always appear in the top three groups of entrepreneurs, followed by graduates of economics majors, then graduates of administration/financial management majors.
Entrepreneurial ratio
Researcher at the Center of Reform on Economics, Eliza Mardian, said that despite growth, so far Indonesia's entrepreneurship ratio is still relatively low compared to other countries in Southeast Asia.
The entrepreneurship ratio is the ratio between the number of entrepreneurs and the population. "Fear of failure" is considered to be the main barrier to Indonesian people's interest in entering the world of business.
"There is something called Global Entrepreneurship Monitoring, a dashboard containing entrepreneurial indicators. "Indonesia has the worst score on the 'fear of failure' indicator," said Eliza.
Dean of the Faculty of Economics and Business at the University of Indonesia, Teguh Dartanto, said that an increase in the number of entrepreneurs must be accompanied by an improvement in quality. Therefore, its growth will be sustainable and in turn will be beneficial for the economy as a whole.
"Education, training and mentoring are important for the continued development of community businesses from the smallest scale to the upper class. "Don't let there be broken ladders or broken ladders that bridge between informal micro and small businesses, to industries that can open up formal employment opportunities," said Teguh.
Concentrated on the island of Java
Apart from the small number, the distribution of entrepreneurship in Indonesia is also not evenly distributed. More than half of the concentration is on the island of Java. Processed Sakernas BPS data by the Kompas Data Journalism Team shows, in 2007, as many as 58.45 percent of entrepreneurs were on the island of Java. Fifteen years later or in 2022 the proportion will shrink to 53.74 percent. However, the largest concentration remains on the island of Java.
With technological advancements, starting a business in today's era will be greatly aided by the development of technology, as stated by Leonard Theosabrata, CEO of Smesco Indonesia. Smesco is an institution under the Ministry of Cooperatives and Small and Medium Enterprises that is tasked with marketing Indonesian SME products, as well as providing training to SME entrepreneurs.
Technology makes the playing field more level and competition fairer for all groups. (Leonard Theosabrata)
For those who want to start a business, according to Leo - the familiar name of Leonard Theosabrata - there are several tips that can be done, including being sensitive to the surrounding environment, being confident, having many discussions to mature business ideas, and returning to the hometown.
"If you feel that there are no job opportunities in your hometown, you can use the first tip again, which is to sharpen your sensitivity in becoming a provider of solutions to issues in your local community," said Leo.