What Can Social Entrepreneurs Do for the Future of Indonesia?

By Nancy Margried on 08:45 pm Jun 10, 2014 in the Jakarta Globe
Category CommentaryOpinion

(JG Graphics/Josep Tri Ronggo Laksono)

With the upcoming election the question of who we prefer to lead the country has become one of the most discussed topics in Indonesia. But putting aside political debate that we are being exposed to these days, it will be a lot more enlightening to evaluate another type of leader that may profoundly change Indonesia in the future.

These leaders come from the business world, and are known as entrepreneurs. Many people disregard the fact that entrepreneurship comes in many packages; sure there are some conventional ones who focus almost solely on making as much money as possible. But we often overlook the other kind of entrepreneurs, those whose desire is not to acquire more wealth for themselves but mainly to empower others through their business ventures. They offer long-term solutions by embracing others in their social business and offer much more than just temporary aid. These entrepreneurs, who utilize entrepreneurial principles for the benefit of society, are called ‘social entrepreneurs.’

In a developing country such as Indonesia, the existence of social entrepreneurs is crucial and their number has expanded in the last 10 years. Indonesia needs leaders who can not only help people but also teach them how to independently achieve a better economic and social standing. Leaders with these qualities will not only help the country in terms of economic growth, but they will also promote equality, social engagement and public participation.

It can even be argued that the activities of social entrepreneurs will decrease the potential of social turmoil, which is often caused by a widening gap between a country’s haves and have nots.

One of the main factors that make social entrepreneur a great leader is his or her ability to inspire action that leads to positive change. Simon Sinek, who wrote the influential book “Start with Why: How Great Leaders Inspire Everyone to Take Action,” explained that there always is strong reasoning — or a strong ‘why?’ — behind a great leader’s actions.

These leaders are deeply invested in their ideas and often prefer to change the direction of their field. Social entrepreneurs are the people who best fit these criteria; they are individuals who collectively desire to tackle major social issues and offer new ideas for wide-scale change through their business.

The pursuit of excellence in their business is not dedicated only to achieve individual success, but most importantly they are trying to make improve the quality of living for people in need.

Strong reasoning is the vital root that will help these social entrepreneurs survive in spite of the criticism and rejections coming from the general public and sometimes even those communities they are trying to help. Yet, if they manage to overcome these obstacles, they will be able to instigate radical change and inspire the community to take action according to their vision.

To survive and prosper, Indonesia needs more than the leadership coming from the big cities or the central government alone. This is simply not enough. Each and every rural area in Indonesia needs the presence of a leader.

Those who are neglected for whatever reason, like a lack of education, urgently need people who can awaken their fighting spirit. Time and time again we witness people forfeit in the game of life because of their personal economic turmoil. But social entrepreneurs are the leaders who may help these people cope.

For these reasons, it is very important for us to recognize the future social entrepreneurs in our midst as early as possible. Many big companies who are concerned about leadership organize events and competitions to select those among the younger generations whose eyes are set on the target to incorporate business models that are both socially responsible and economically viable.

Some companies hold annual competitions to honor university students for their creative and innovative social entrepreneurship ideas.

At the same time, universities in Indonesia have also introduced social entrepreneurship in their programs and see it as one significant aspect of economic development.

Thomas L. Friedman, the author of the famous book “The World Is Flat,” has stated that one of the newest figures to emerge on the world stage in recent years is the social entrepreneur:

“This is usually someone who burns with desire to make a positive social impact on the world, but believes that the best way of doing it is, as the saying goes, not by giving poor people a fish and feeding them for a day, but by teaching them to fish, in hopes of feeding them for a lifetime.”

Ultimately, whether it is in the realm of politics or economics, Indonesia needs such great leaders, those whose solutions are sustainable and long-lasting.

It may sound overtly ambitious to hope that we can achieve economic equality in a country with more than 250 million citizens any time soon. However, the existence of great leaders that can inspire people to create and make use of equal opportunities may be just one of the solutions for this crucial challenge.

Nancy Margried is an entrepreneur.

 

Potential for Emerging Markets in Indonesia

Interesting article by Guy Nelson about emerging opportunities in Indonesia, and what the growth of the country’s middle class means for investment

As an expatriate in Indonesia you probably chose to live here for a job assignment, or an extended visit or retirement, preceded by one or more preliminary visits to Indonesia. Now you’ve settled into your expat lifestyle, and like others who became expat-entrepreneurs, you see potential for developing a new business in Indonesia. Surmountable start-up details aside, your primary challenge is to choose a business to start.

As a foundation to a new enterprise, Indonesia’s economy is quite stable. Gross domestic product ranges between 5%-6% annually, largely produced internally since 60% of Indonesia’s economy comes from domestic consumption. With GDP of nearly $850 billion last year, Indonesia is the world’s 16th largest economy, following only China, Japan, India and South Korea in Asia. Indonesia has significant exports of raw materials but limited exports of manufactured goods.

The government is now slowing exports of natural resources, and imports into Indonesia are relatively limited, so economic dependency on trade with other countries is minor compared to most. Consequently, the country can weather storms in the global economy better than others. This capacity for Indonesia to drive its internal economy means your new business will largely be shielded from world economic changes, especially if you target internally at the increasing purchasing power of the country’s growing “consumer class”.

It should impress you to know McKinsey (2012) reported Indonesia’s consumer group could increase from 45 million currently to more than half the population at 135 million by 2030 – an increase only to be exceeded in India and China. By then, Indonesia’s economy will be the 7th largest in the world, greater than the economies of Germany and the UK.

Let’s assume you are persuaded to focus your new business on this growing consumer group. That’s a big target which you can further narrow down. With Indonesia’s burgeoning middle class at an average age of 28, the youthful demographics promise their attachment to new technology and will boom for a long time. The business drivers here are increased access to the internet and e-commerce via mobile phones, especially smartphones which are rapidly dropping below the Rp.2 million price point. The boom is also cheered on by broad acceptance of social media and access to new forms of personal credit.

Indonesia’s population of 240 million exceeded 300 million mobile phone subscriptions last year, as many subscribers carry two or more handphones. Naturally the technology start-up opportunities are mainly mobile-focused, and others are in social media, e-commerce, payment systems, digital advertising and business-to-business markets.

Large numbers of new businesses have chosen the tech sector, with enterprise creation speeding up since 2010. Don’t worry though; there is plenty of open space for more.

If this sounds too fast-paced and high-tech for your taste there are plenty of other new business opportunities in Indonesia. Beef is popular in the country but there is limited selection of good beef products, so high quality beef is mainly imported from Australia. Why not develop excellent beef here? Also, someone needs to develop a strain of wheat that will survive in Indonesia, to support the increasing demand for wheat products.

After-sale customer service is not a regular concept in Indonesia and enterprises that provide it will generate businesses that succeed more easily. Apparent areas of ineptitude in Indonesia that slow things down and irritate you and other expats are potential areas for change.

However, seeing business and life in Indonesia move more slowly than in your home country does not make Indonesia a lesser country. The order of life is different here. It takes some time to appreciate the local culture and find related weaknesses in your business plans. Spending a few months doing reconnaissance will be worth the time. After that it just comes down to doing it.

As an expat you have two paths to instigate a registered Indonesian business. The most costly path is to set up a ‘PMA’. Some business sectors are allowed 100% foreign ownership through a PMA company, while other sectors require an Indonesian partner. The expensive part of the PMA is the government requirement for US$1.2 million in investment; luckily only 25% (US$300 thousand) is needed as ‘paid-up’ capital. For some this may not be affordable and the second route is via a ‘PT’ company with an Indonesian partner, whereby the foreigner is not allowed to own the PT in their own name. This path naturally has more risk.

Whatever business direction you choose, take the precaution to establish relationships with a recommended lawyer, notaris and accountant to help guard your rights and investment as you navigate the setup process.

Guy Nelson is a Canadian expat, living and working in Java and Bali since 1997. He initiated BizPlanPlus (www.bizplanplus.com) an Indonesian business consultancy to help expat clients “avoid failure on your way to success”. – guy.nelson@bizplanplus.com

– Originally posted at: http://indonesiaexpat.biz/business-property/indonesian-expat-entrepreneur/#sthash.F0YKaQrI.dpuf

Intellectual property law and the politics of scale in Indonesian arts

Intellectual property law and the politics of scale in Indonesian arts

Most Indonesian arts have historically operated without Intellectual Property (IP) regulation. As we know, it is important to find ways to benefit traditional artists and their communities. In the old days, wealthy art owners also owned a work’s IP. Most countries have enacted laws that stipulate that living artists receive a percentage of subsequent sales of their works. Similar laws now also exists in Indonesia. The link to this journal article about IP and traditional arts is very much on the academic/anthropologist side of things and one for those who have the attention span for academia – but it is a valuable read:

“International and national agendas are redesigning the terms of intellectual-property (IP) laws to create cultural property for developing nations. Debates over IP and cultural-property “rights” or legal needs for “protection” are critical to … [efforts] to reflect on how the production of knowledge, even culture itself, is variously construed to originate with, or “belong to,” particular individuals, ethnic communities, or nation-states. [This journal article explores] the implications of two Indonesian legal documents to show the disjunction between discourses of regional artists who describe the ritual exchanges, relationships, and transgenerational messages their arts shape and (inter)nationalist legal initiatives that bypass artists’ concepts of process, access, and authority in an effort to disembed and control ritual-based expressions as products with exclusive owners”.

Indonesia’s Burgeoning Creative Industry

Indonesia is a vast country with a population of at least 240 million people living across 17,000 islands. If you’ve ever visited the country you will have noticed the very DIY (do it yourself) attitude of Indonesians and their accompanying creative approach to life. Everywhere you look you’re likely see someone engaged in an actively making something. Whether they’re building, painting, strumming a guitar, carving intricate pieces of furniture, busking, cooking intricate cuisine. From the street seller or the inter-generational craftsman, to graduates of the nations finest art schools to those who sell works at international art auction houses, Indonesia is a country bursting with creative talent.

Not surprisingly, this attitude is also spilling into the creative sector of Indonesia’s economy, and Indonesia’s creative industry is emerging as a major economic sector in the country’s rapidly developing economy.

Indonesia’s culture and history and was inspired by the untapped potential the country has to monetize its arts and culture industry. The country’s first president, Sukarno, recognised the power in public art and engaged artists to create sculptures and artworks to inspire and evoke national pride after centuries of colonisation.

Indonesia’s creative industries are similar to the those abroad and include everything from film, music, fashion, architecture and gaming, and many other. Indonesia is clearly reaping the benefits of this fast-growing industry which has an output accounting for 7 percent GDP in 2011.

The power of the Indonesian consumer market is also growing at a rapid pace. In total there are about 74 million middle-class and affluent consumers (MACs) in Indonesia and this number will double by 2020 to roughly 141 million people. As the number of MACs increases so does the amount of disposable income, meaning individuals are more inclined to spend — and invest — on lifestyle choices, such as fashion, art, performance.

But Indonesia is not only looking towards it’s own MAC market. The country’s tourism and arts ministry is actively promoting inter-country partnerships across the creative industries to further develop its creative economy.

During November 2012 Indonesia and the UK signed an MOU relating the the creative industries between the two countries. Partnerships between the two countries’ creative industries had been grown out of a successful partnership linking the British Council (BC), Femina Media Group for Jakarta Fashion Week (JFW), UK’s Centre of Fashion Enterprise (CFE), and the Indonesian Ministry of Tourism and Creative Economy (MTCE).

Image

Jakarta Fashion Week (a mix of the traditional and modern). Photo courtesy news.cn

The MoU strengthened the connection between the UK and Indonesia for exchange of information and share of best practice, knowledge, and resources providing a framework to replicate the success of the Fashion partnership for the other Creative Industries such as performing arts, film and animation, arts and crafts and design.

Indonesia and South Korea have also joined forces for developing further partnerships between the two countries around the creative industries. In October 2013 the two countries signed a memorandum of understanding (MOU) to boost cooperation to promote creative industries. They agreed to bolster cooperation in art, crafts, music, film, performing arts and video games.

Activities resulting from these MoU will create greater opportunities to engage creative talent to develop innovation and greater collaboration. Openness to engagement with other nations who prioritise the creative industries will also, of course, open doors to Indonesian creative entrepreneurs to further develop businesses to create employment and economic growth for Indonesia. The creative industries will develop local, regional and international influence.

Indeed, it is widely recognised that tourism and the creative sector sectors, combined, have the power to bring much economic benefit to Indonesia, and can also be a powerful economic stream through which Indonesia can work toward alleviating poverty. As such, thedeep melting pot of creativity bubbling away in Indonesia has a huge potential to not only assist the lives of artists and artisans themselves, but also the economy of Indonesia as a whole.

 

Kate Grealy, Tresno Artisanry Indonesia

@tresnoartisanry @kategrealy