While the exact number varies according to different sources and methodologies, it is clear that there are a large number of women entrepreneurs in Indonesia (Table A).
Table A. Estimated number of women entrepreneurs in Indonesia
However, these encouraging statistics provide an incomplete picture of women’s entrepreneurial activities. More than 50% of these female entrepreneurs own micro enterprises and on average most of these are informal enterprises. Additionally, while women own 52% of all microenterprises in urban areas of Indonesia, they own only 34% of the medium sized enterprises. There is much less representation of woman entrepreneurs further along the enterprise growth trajectory (Figure A).
Figure A. Number of women-led enterprises across growth stage in Indonesia
Source: International Finance Corporation
A large number of women entrepreneurs in the micro stage is due to a lack of formal paid employment for women, which tends to push them to earn income through entrepreneurship. In other words, they are more likely to be pushed into entrepreneurship out of necessity rather than entrepreneurial opportunity. Additionally, there are lower barriers to entry in the form of capital, skills, and technology required at the micro stage. There also appears to be a lower representation of growth-oriented 37 women – who want to focus beyond the micro stage in the Indonesian ecosystem. GEM reports that globally, women’s intention to start a business is increasing over the years. However, there is a wide gender gap in early entrepreneurial activity, implying that there is discontinuation in translating the intention into an actual entrepreneurial activity by women.
ID Startup Founder believe that there is a need to address the lack of female entrepreneurs across the growth spectrum in Indonesia, because an increase in new women-led ventures and the longevity of existing ones can lead to a more prosperous economy through the following:
- An increase in female labor force participation: Women business owners tend to hire more women than men. In Indonesia, women owners are 16% more likely to have more women employees than men owners. This will happen if there are more women-led SMEs, as micro entrepreneurs cannot normally hire full-time employees.
- An increase in worker’s productivity: The World Bank estimates that the average output per worker will increase by 7 to 18% if women entrepreneurs have the same access to productive resources as their male counterparts.
- Social transformation as a result of women’s empowerment. The increase of growth-oriented women entrepreneurs will create more success stories, which will likely invite more women into entrepreneurial activity.
The low representation of women in entrepreneurship across the enterprise growth trajectory can be associated with many external and internal challenges, such as lack of access to finance, lack of access to networks and information and lack of self-confidence. There is a need to further explore the unique challenges faced by women entrepreneurs in the Indonesian context.
There are a number of programs provided by the Indonesian government that support MSMEs. Often, such programs provided by the government have a different mission to the above. According to IFC, the majority of these programs target microenterprises with the main objective of providing support to make the best of entrepreneurship as a way to earn wages. However, none of these programs focus specifically on women-led businesses.
Therefore, there is an opportunity for ID Startup Founder to make the entrepreneurial ecosystem more gender inclusive, by supporting and promoting more women entrepreneurs. In the following section, ID Startup Founder briefly outline the current progress of the ecosystem and Startup Assistant Organizations (SAOs) in this field. With private and public sector support, ID Startup Founder could play a critical role in addressing the issue of ensuring everyone, regardless of gender, is given the same level of support. And support government programs to realize Indonesia Hebat!