Youth Entrepreneurship Ecosystem of Indonesia

Advisor:
Coordinator:
Team Member: Akhmad Ramadhan Fatah, Dyan Widyaningsih, Fatin Nuha Astini
Completion Year:
2021
Area:
Indonesia
Topic:
Children & Youth, Microfinance & Small Medium Enterprises

Collaborating Partners

Project Donor/Funder: UNDP

 
 

Description & Progress

Background

Youth unemployment in Indonesia is among the highest in the region (World Bank, 2020). Youth also dominates unemployed population. Latest figure from SAKERNAS (National Labor Force Survey) 2019 showed that one-third of unemployed in Indonesia are youth. On the other hand, youth workforce is often viewed as a vulnerable group that suffers from poor quality jobs, low pay, less experience, and bad working conditions. COVID-19 pandemic magnifies the youth unemployment challenges. Youth unemployment rate is predicted to increase at a faster rate than adult unemployment due to higher layoffs among the younger age group.

As the demographic dividend will come in the next 5-10 years, Indonesia has an opportunity to levelling up its economy. Encouraging young entrepreneurs is seen as one way to overcome current youth unemployment as well as a step to build a robust economic growth in the future.

Youth interest in becoming entrepreneurs is high in Indonesia (U-Report Indonesia, 2019). However, the challenges to enter its ecosystem are enormous. BAPPENAS (2020) highlights that youth face challenges in terms of lack of entrepreneurship competencies and education, experience, resources, networks and family support to start and run their businesses. Other challenges come from enabler side such as lack of incubators or spaces to grow their business, and policy supports from authorities/governments at all levels (UNDP, 2020). In addition, inequity in terms of the proportion of youth entrepreneurship exists across regions/provinces in Indonesia. Most provinces outside Java have less than 1% youth entrepreneurs. This low proportion of youth entrepreneurs might have an impact on those provinces’ future development.

Youth economic empowerment through decent work and employment is a commitment of not only UN but also the Government of Indonesia. Initiative such as Youth Entrepreneurship Initiative takes in place to achieve long-term related-youth goals under SDGs. UNDP Indonesia and Citi Foundation has developed a scoring method to measure the ecosystem of youth entrepreneurship in Indonesia using five pillars. They are 1) Talent, 2) Culture, 3) Capital, 4) Density, and 5) Regulatory. Nonetheless, in the last two years, participation from Eastern and Western provinces in Indonesia were not captured perfectly in the ecosystem scoring result.

Given this context, this study aims to assess youth entrepreneurship ecosystem with emphasizing an inclusion of pictures and condition of all regions in Indonesia. Youth entrepreneurship ecosystem is an important support for the growth of youth-led entrepreneurship intentions and is also a catalyst for the manifestation of youth-led entrepreneurship roles in economic growth, job creation, as well as poverty reduction. Thus, at the end the study results could support evidence-based policies regards to inclusive youth-led entrepreneurship

Objective

The Study aims to be a descriptive research regarding the context of youth entrepreneurship in Indonesia and the current progress of youth entrepreneurship development in Indonesia. The final output is a report on youth entrepreneurship ecosystem in Indonesia.

The report will capture the detailed picture of youth entrepreneurship ecosystem with qualitative summary of national youth entrepreneurship landscape. At the end, this study will come up with recommendations in national levels that may represent ecosystem of all regions in Indonesia better based on 5 pillars of youth entrepreneurship ecosystem framework (i.e. Capital, Density, Culture, Regulatory, and Talent) that had been developed by UNDP and Citi Foundation.

Methodology

This study will apply different approaches and methodologies in developing the report of youth entrepreneurship ecosystem in Indonesia. A mix of quantitative and qualitative methods will be adopted in developing report.

The report will employ the UNDP analytical framework using 5 pillars of youth entrepreneurship ecosystem. The report particularly will address research objectives on concept description, stakeholder mapping, policy interventions mapping, and strengths and weaknesses of youth entrepreneurship ecosystem at national level. We explore numerous data sources to answer those subjective.

Data collection methods utilized in this study are literature reviews (include policy reviews and media tracking), in-depth interviews, focus group discussion (FGD), and secondary data analysis. The first three methods intended to collect qualitative information, while the fourth one collects the quantitative information. Quantitative data collection focus on the entrepreneurs. Meanwhile, qualitative data collection from policy reviews, media tracking, and in-depth interviews will focus more on stakeholders who are youth entrepreneurship enablers (those who have programs/activities on developing youth entrepreneurship).


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