Indonesian students want to be entrepreneurs, but lack plenty of skills

Photo credit: ximagination / 123RF Stock Photo.

In my master’s thesis “Development of young technology companies across Asia-Pacific,” I conducted a survey to assess the motivations and perceptions of Indonesian university students on technology entrepreneurship.

What I found was a high level of entrepreneurial spirit. Around 69 percent of the students wanted to start their own business after finishing their studies and, from that, almost 62 percent wanted to become technology entrepreneurs.

Innovation was the main drive for entrepreneurship while the main barriers are the lack of information, creativity, professional skills, and capital.

Indonesia: an entrepreneurial society

As opposed to other East Asian societies, Indonesia is characterized by a low level of “uncertainty avoidance.” Entrepreneurship is a respected career choice in this society because of its perceived benefits — control of daily work, choice of the desired job, and application of available knowledge and skills.

Most Indonesians also believe that entrepreneurship has a positive impact on society, a fact that universities seem to agree with. According to the Survey, 68 percent of students indicate that their home universities encourage them to become entrepreneurs through courses and seminars. Some universities offer programs focused on “Entrepreneurship” and Binus University (Jakarta) even has its own startup accelerator for technology entrepreneurs.

Potential of technology startups in Indonesia

Perceived as innovative and flexible with low-hierarchical workplaces, technology startups are popular with Indonesian students. 91 percent of them would like to work for tech startups with social media and entertainment as the most preferred sectors.

With high numbers of internet users, a young population, and the increasing middle-income consumer class, new opportunities for tech entrepreneurs are booming in the country.

Human capital challenges

The economic outlook is optimistic for tech startups in Indonesia, but human capital from this country still requires significant improvements. According to the Survey, the main barrier for students to start their own business is their “lack of creativity and professional skills.”

The most concerning issues for many analysts on Indonesian fresh graduates are also their lack of professional skills and their low performance in the country’s educational system. Although school attendance has increased dramatically in the last 20 years, Indonesia’s PISA education ranking usually scores the lowest.

Although school attendance has increased dramatically in the last 20 years, Indonesia’s PISA education ranking usually scores the lowest.

The OECD reports that Indonesian employers are concerned about students’ low qualifications. Numerous companies indicate that most get into the labor market without the proper job skills to satisfy employer needs.

Companies are demanding students to improve their English proficiency, computer knowledge, problem-solving, and critical-thinking skills.

Currently, educational institutions in the country are not training students with these qualifications. This makes it difficult for many young people to enter the labor market and may harm the economic development of Indonesia in the short and long term.

Solutions for the future