Southeast Asia’s dynamic entrepreneurial landscape is undergoing major changes, with women entrepreneurs spearheading business and trade ventures across the region, spurred by evolving trends. Indonesia, Southeast Asia’s largest economy, is a key market driving this change.
Indonesia, the world’s fourth most populous country with 275 million people, is home to a vibrant community of entrepreneurs. With over 65 million micro, small and medium-sized enterprises (MSMEs) contributing 60% of the country’s gross domestic product (GDP), totaling Rp 9.6 trillion (US$ 603 million), Indonesia’s entrepreneurial sector is a key part of the economic framework. plays an extremely important role. . Notably, women-owned MSMEs are a significant part of this picture, accounting for 64.5 percent of all MSMEs, higher than the global average of only one in three MSMEs being women-owned. ing. In developing and low-income countries where wage labor is not widespread, entrepreneurship has emerged as an important means of economic empowerment.
Through a collaboration between Boston Consulting Group (BCG) and Stella Women, a dedicated community platform supporting and connecting empowered women in Indonesia, we surveyed over 500 women entrepreneurs. I grasped the realities faced when navigating entrepreneurship.
Clarifying the current situation of women-owned MSMEs in Indonesia
Our research shows that 83% of women entrepreneurs operate mainly in the main provinces of Java Island, such as Jakarta Capital Region (DKI) and West Java, and their average age is 34 years old. It became clear. This concentration is consistent with Java’s status as an economic powerhouse. It is the hub and contributes to her 56% of the country’s GDP.
These entrepreneurs mostly began their business journeys at the age of 30 and were often initially single or married with no children, which may indicate fewer family-related burdens that impede early business development. there is. Seventy percent of the women surveyed had at least a bachelor’s degree, underscoring the importance of education. However, only 24% succeed in business on their first try, highlighting the transformative role that experience plays alongside education.
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The study also revealed that there is little difference in the motivations for running a business, with earning an income and pursuing passion being the top motivations for both groups, with female entrepreneurs in Indonesia It shows that there is a common desire.
The food and beverage (F&B) sector stands out as the most widely operated industry among these women entrepreneurs, accounting for 48% of the sample, an industry that offers end-to-end management opportunities. It reflects that you like it. Despite the prevalence of F&B business, the monthly income of most of them is less than Rp 10 million (US$ 628.77).
Furthermore, approximately 75% of these women-owned and managed enterprises (WSMEs) operate with a compact workforce of 0 to 4 people. In particular, 55 percent of WSMEs employ more women than men, creating a virtuous cycle and further empowering women in employment.
Unraveling the unique challenges affecting women-owned MSMEs
Although WSMEs represent a significant majority (64.5%) of Indonesia’s MSMEs, they face multifaceted challenges that can hinder their active participation in business ownership. These challenges include various aspects such as acquiring resources and closing the digital literacy gap.
However, there are also deeper systemic issues that need to be addressed across the socio-economic spectrum, such as societal expectations and biases, to create a truly inclusive business environment.
Our research identified 13 distinct challenges facing women entrepreneurs. [Exhibit 1.]
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These 13 key challenges facing WSMEs can be broadly categorized into four central themes:
- networking: A G20 survey of nine companies around the world found that mentoring and networking were considered the top two best practices for promoting women to leadership positions. Despite the value of such a structured environment, women-led MSMEs often lack formal platforms to connect with fellow entrepreneurs. This reality is reflected in our research, with more than half of the WSMEs surveyed highlighting difficulties in accessing mentors and support communities, especially for women based outside Jakarta. This was noticeable in the case of
- Funding and infrastructure: For the female entrepreneurs surveyed (70%), securing resources, especially funding, and dealing with regulatory uncertainty are major challenges. Therefore, the majority of these women rely on traditional sources such as personal savings to fund their businesses. However, more sophisticated funding sources such as venture capital remain difficult to obtain.
- skill: In our research, 66 percent of women surveyed believe they lack the knowledge needed to run a business. Interviews with women entrepreneurs revealed their enthusiasm for upskilling to improve business acumen, especially in leveraging digital capabilities and platforms. It is clear from the survey results that the Indonesian population is technologically savvy, with an internet penetration rate of 77% and a social media penetration rate of 60.4%. A remarkable 86% of her WSMEs are already leveraging digital platforms to drive business growth. For the minority who are not yet using digital platforms, the desire is there, but knowledge gaps in selecting and operating the right platforms are a challenge. Of the 86 percent who already use digital tools, social media and e-commerce platforms are the main choices, with 96 percent and 67 percent of women respectively incorporating these platforms into their business.
- family: Women in leadership roles face different social and cultural expectations than men, creating additional challenges unique to women. These expectations require women to strike a delicate balance between authority and affability, to advocate for themselves while caring for others, and to be assertive yet empathetic. In our survey, more than half of women mentioned the difficulty of balancing household chores and entrepreneurial roles.
Traditional and emerging enablers are essential to the success of women entrepreneurs
Empowering women entrepreneurs in Indonesia is important not only for gender equality but also for promoting economic growth and innovation. More than 64.5 percent of MSMEs in Indonesia are owned or managed by women, giving them a strong presence in the entrepreneurial world.
Recognizing the multifaceted challenges faced by women entrepreneurs, it is necessary to establish comprehensive support mechanisms to foster their growth and prosperity. Government intervention, the private sector, and self-help efforts all play a vital role in fostering an environment conducive to WSME success.
Government intervention: To stimulate the growth of WSMEs, it is important to prioritize financial support as the basis for economic empowerment. Establishing a clear and consistent definition of women in MSMEs is essential and important, including the classification of MSMEs and introducing transparent methods to distinguish between male- and women-led enterprises. Gender-specific reporting is essential for national indicators.
It is essential to develop support programs with clear objectives and guidelines tailored to the specific needs of WSMEs, including training, workshops and mentoring that are aligned with government objectives. Policies should be enacted to encourage private sector support for WSMEs, recognize the potential of WSMEs, and foster an ecosystem that enhances and nurtures WSMEs.
Additionally, the government will prioritize progress monitoring and reporting to ensure initiatives lead to tangible results, and further empower women entrepreneurs, while maintaining transparency and accountability in supporting WSMEs. It should allow for adjustments, improvements and targeted interventions to be delivered.
Private sector: The private sector’s role in developing WSMEs is exemplified through dedicated programs that provide comprehensive support to women entrepreneurs, from education and mentoring to access to capital and networking opportunities.
Self-support: Internal drive, determination, and confidence are the foundation for success and complement external resources and guidance. Networking and building a robust support system is key, and organizations like Stellar Women and her BCG offer mentorship programs and networking opportunities.
Establishing concrete support systems will not only impact women entrepreneurs and the Indonesian economy, but will also have a global impact, highlighting the paramount importance of women in MSMEs and the broader agenda of gender equality and empowerment. It has power.
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Lenita Tobing is a managing director and partner at Boston Consulting Group. Samira Shihab is the co-founder of Stellar Women.
