Academic journal article International Journal of Business

Entrepreneurial Employee Activity in Indonesia

Academic journal article International Journal of Business

Entrepreneurial Employee Activity in Indonesia

Article excerpt


Based on Global Entrepreneurship Monitor (GEM) data, Indonesia has the highest new business entrepreneurship rate among other Southeast Asian countries. Indonesia also has a relatively high established business ownership rate, it is the second highest among Southeast Asian countries after Thailand. However, almost all businesses still focus on the trading or selling products that do not show an example of risk taking and has little innovation. This research captures entrepreneurial employee activity (EEA), which is acknowledging the existence of different types of entrepreneurship (early-stage entrepreneurs, established businesses, and ambitious entrepreneurial employee activity) among non-entrepreneurs. This study elaborates how different profiles of entrepreneurship, related to different conditions, leading to different forms of socio economic output. The study indicates that there is a low rate of employees who are taking an active and leading role in the entrepreneurial activity are very low, and the rate tends to decrease between current situation and the last three years.

JEL Classifications: 01, 02, 04, 05

Keywords: adult population survey: entrepreneurship; entrepreneurial employee activity; economic development


Entrepreneurship has been considered as an important driver in developing a stronger economic condition of a nation, and this also applies to Indonesia. The emergence of start-up businesses has given a significant contribution into the Indonesian GDP (Tambunan, 2000). Nandram and Samsom (2006) described entrepreneurship as an inner mechanism within the spirit of a person. Tambunan (2009), furthermore, stated that entrepreneurs, even in small and medium levels of business (or SMEs) in Indonesia have contributed an important role in creating job opportunities, poverty reduction, growth in exports as well as improvement of income distribution. Hence, being an entrepreneur or having an entrepreneurship spirit is a good indication of being a person that always has a positive mind, challenge the risk, and act with determination.

Based on the global and national data, it is found that unemployment rate is increasing. International Labour Office (ILO) (2013) estimated that 73 million young people around the globe were unemployed in 2013. Data from Statistics Indonesia shows that youth unemployment level is 22.2% in 2009 (BPS, 2010). Indonesian demographic dividend could result a drawback for a productive labor force since a limited employment opportunities. Cultivating the entrepreneurial spirit may promote productive individuals to start a business and to have a positive contribution into the economy, such as what cases given by Kaijun and Sholihah (2015) in Indonesia and China.

Entrepreneurship has become a term that is increasingly widespread around the world, also, entrepreneurship tends to be associated with economic development and well-being of society. Entrepreneurship represented by small medium enterprises (SMEs) has a positive impact to national economy; SMEs is believed to be less sensitive to the economic crisis than the larger enterprise. Furthermore, when the business has been established, the upscaling business from micro into small, medium, and large enterprises has a prominent role in the growth of the local economic development.

Indonesia is identified as one of the middle-income economy, with the efficiency driven category based on World Economic Forum (Schwab, 2015). Indonesia has relatively a strong economy and a stable political life. The economic crisis in 1998 brought significant changes as Indonesia severed quite badly in this crisis. However, based on study of Tambunan (2010), in the crisis in 2008-2009, although Indonesia has been affected by the crisis, it recovered much quicker and grew faster than other countries in the region. Tambunan argued that the reasons for easy recovery is employees that had job cut chose to create entrepreneurial activities in the informal sector, such as become an owner of micro or small businesses, such as starting a kiosk to sell products or creating food catering or food stalls. …

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