Understanding Indonesian Perceptions of Starting a Business

The Global Entrepreneurship Monitor (GEM) report examines the characteristics of individuals intending to start businesses in numerous countries.

For Indonesia, several findings emerged. The majority of respondents (87.2%) agreed that their local environment was supportive of business ventures.

Respondents also rated their skills and knowledge highly, with 75.5% agreeing they possessed sufficient capabilities. Furthermore, 72.2% felt it was easy to start a business.

A significant portion (71.4%) reported knowing individuals who had already started businesses, indicating a strong business network.

However, 36.8% admitted to fearing business failure. Additionally, 33.3% of respondents, not yet involved in business or entrepreneurship, lacked a firm intention to pursue entrepreneurial activities.

Indonesia last participated in GEM in 2020. That year, it ranked first among 45 participating countries in the GEM National Expert Survey (NES) for entrepreneurial environment quality, achieving a National Entrepreneurship Context Index (NECI) score of 6.4, indicating a sufficient entrepreneurial framework condition (?5.0), largely by a wide margin.

By 2022, Indonesia's position had significantly changed. GEM noted a considerable decline in nine of the country's framework indicator scores.

"While this shift could be linked to the pandemic, Indonesian national experts in the survey assessed the recovery from the economic impact of COVID-19 as reasonably good, scoring 6.4 points, placing them 11th out of 51 countries," the research team wrote.

The sample data originated from the Adult Population Survey (APS), randomly surveying 2,000 adults (aged 18-64) in each participating country. The national sample was designed to reflect the overall population in terms of age, gender, and location.

The APS provides detailed information on the characteristics of entrepreneurial individuals, their activities, attitudes, motivations, and ambitions.

It also allows for exploration of entrepreneurs' involvement in starting or running new businesses at various stages of development, including nascent, established, high-growth, and others.

Interviews were conducted face-to-face, by telephone, and occasionally via online surveys.