Women Entrepreneurship in Indonesia: Constraints and Motivations (ongoing study)

8/2/2019 Women Entrepreneurship in Indonesia: Constraints and Motivations (ongoing study)

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WOMEN ENTREPRENEURSHIP IN

INDONESIA: CONSTRAINTS AND

MOTIVATIONS

(ongoing study)

Tulus T.H. TambunanCenter for Industry, SME and Business

Competition Studies, USAKTI

The views expressed in this paper are the views of the author and do not necessarily reflect the views or policies of the AsianDevelopment Bank (ADB), or its Board of Governors, or the governments they represent. ADB does not guarantee the accuracy ofthe data included in this paper and accepts no responsibility for any consequence of their use. The countries listed in this paper donot imply any view on ADB's part as to sovereignty or independent status or necessarily conform to ADB's terminology.


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Main objective: to examine the development of women

entrepreneurs in Indonesia with the focus on MSMEs.

Three research questions:

how has been the development of women entrepreneurs,

especially in MSMEs in Indonesia recently?

what are the main constraints for women to become

entrepreneurs in Indonesia?

what are the main motivation/reasons that women conduct

their own business instead of working as wage-paid

employees or staying home doing domestic works.

Methodologically,

analysis of secondary data

review on key literature on women entrepreneurs in

developing countries and Indonesia

field survey


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DISCUSSION:

1) Key Characteristics of MSMEs

2) Development of MSMEs (in brief)

3) Picture of women entrepreneurs in Indonesia

4) Field survey: Preliminary findings


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Aspect MIEs SEs MEs

ormality operate in

informalsector,

unregistered

& pays notaxes

some

operate informal

sector,

registered &pay taxes

all operate in

formal sector,registered & pay

taxes

ocation Majority in

rural areas/villages

Many in

urbanareas/cities

Mostly in urban

areas/cities


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Aspect MIEs SEs MEs

Organization

&

management

- run by the

owner

- no internal

labor division

-no formalmanagement

&

accounting

system

(bookkeeping)

- run by the owner

- no labor division

(majority),

-no formal management

and accounting system(bookkeeping)(majority)

-many hire

professional

managers, -many

have labor division,

formal organizationalstructure & formal

account-ting system

(bookkeeping)

Nature of

employment

majority use

unpaid family

members

some hired wage

laborers

-all hired wage

laborers

-some have formal

recruitment system

Nature of

productionprocess

- degree of

mechanizationvery

low/mostly

manual

- level of

some use up-to-date

machines

many have high

degree ofmechanization/access

to modern

technology


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Aspect MIEs SEs MEs

Market

orientation

majority

sell to local

market and

for low-

incomeconsumers

-many sell to

national market

and export

-many serve

also middle tohigh-income

group

-all sell to

national

market and

many also

export- all serve

middle and

high-income

consumers

Social &economic

profiles of

owners

- low oruneducated

- from poor

households

- main

motivation:

survival

- some havegood education,

and from non-

poor households

- many have

business/profit

motivation

- majorityhave good

education

- many are

from wealthy

families

- main

motivation:profit

Sources of

inputs

- majority

use local

raw

- some import

raw materials

-some have

- many use

imported raw

materials


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Aspect MIEs SEs MEs

External

networks

- majority

have no

access togovernment

programs

and no

business

linkages

with LEs

- many have

good relations

withgovernment

and have

business

linkages (such

as

subcontractin

g) with LEs

(including

MNCs/FDI).

- majority

have good

access togovernment

programs

- many have

business

linkages

with LEs

(including

MNCs/FDI)

Women

entrepreneur

s

ratio of

female to

male as

entrepreneur

s is the

highest

ratio of

female to

male as

entrepreneurs

is high

ratio of

female to

male as

entrepreneur

s is low


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Total enterprises by size category in all economic sectors

(000 units)ize

ategory

2000 2004 2007 2008 2009

IEs &Es 39,705 44,684.4 47,720.3 52,327.9 52,723.5

Es 78.8 93.04 120.3 39.7 41.1

Es 5.7 6.7 4.5 4.4 4.7

otal 39,789.7 44,784.1 49,845.0 52,262.0 52,769.3


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Women Entrepreneurs in Indonesia

Some indicators

1) Global Gender Indexfrom the World Economic Forum (WEF):gender gap in:

-in economic participation and opportunity

-education

-health and survival

-political empowerment

2) Gender Equity Index (GEI) developed by Social Watch: gender-

based inequities in:

-education,

-economic participation

-empowerment


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The Gender Gap Index of Indonesia, 2010


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Ranks of ASEAN Countries for GEI and Its Dimensions, 2009

Country GEI Education Economic

Activity

Empowerment

Cambodia

Indonesia

Lao, PDR

MalaysiaPhilippines

Singapore

ThailandViet Nam

62

55

52

5876

63

7074

78.1

96.8

80.6

98.698.5

95.0

98.396.5

83.5

52.8

59.2

46.663.5

58.6

71.781.3

23.2

16.0

16.8

29.764.8

36.5

40.644.0


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3. National Labour Survey: Employment by

Status and Gender4. National Enterprise Survey by Gender of

Owners


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Table 5: National Labour Survey: Employment Status by Gender in Indonesia, 1990-2006 (%)1990 1995 1996 1997 1998 1999 2002 2006 2011

Male

Paid worker 31.9 39.1 38.4 39.4 36.1 36.2 29.4 35.2 35.9Doing own business with paid worker 1.1 2.1 1.8 2.2 2.3 3.4 4.1 4.0 4.4

Doing own business without paid worker 53.6 50.1 52.1 50.3 52.7 51.9 59.4 53.2 39.99

Family worker 13.5 8.7 7.7 8.0 8.8 8.5 7.0 7.7 19.71

Female

Paid worker 22.8 29.2 27.4 29.0 27.7 28.1 37.3 31.5 32.1

Doing own business with paid worker 0.3 0.7 0.8 0.8 0.8 2.0 1.1 1.1 1.7

Doing own business without paid worker 30.2 36.8 38.5 34.5 34.9 35.8 25.4 33.2 28.5

Family worker 46.6 33.3 33.4 35.7 36.6 34.2 36.2 34.1 37.7

Male + Female

Paid worker 28.4 35.6 34.2 35.5 32.9 33.1 32.3 33.9 44.6

Doing own business with paid worker 0.8 1.6 1.4 1.7 1.7 2.9 3.0 3.0 3.4Doing own business without paid worker 44.5 45.4 46.9 44.3 45.9 45.7 47.2 46.2 35.7

Family worker 26.3 17.4 17.5 18.5 19.5 18.3 17.6 16.9 16.3

Owners of MSEs by Gender and Non agricultural Sector 2003 (unit)


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Owners of MSEs by Gender and Non-agricultural Sector, 2003 (unit)

Sector Total

units

Owners

Male Female

ining, electricity (non-Statedwn/PLN) & construction

ndustry manufacturing

rade, hotel, & restaurant

ransportation & comm.

inancial inst, real estate,

enting, and services

otal

(100.00)*

(100.00)

(100.00)

(100.00)

(100.00)

(100.00)

(93.64)[2.21]

(61.93)

[15.25]

(61.21)[52.64]

(98.60)

[19.94]

(71.80)[9.97]

(68.00 )

[100.00]

(6.36)[0.32]

(38.07)

[19.91]

(38.79)[70.86]

(1.40)

[0.60]

(28.20)[8.32]

(32.00 )

\

[100.00]


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Owners by Gender of MSMEs in Manufacturing Industry, 2006 (%)

Gender Size

MIEs and SEs MEs MSMEs

Male

Female

Total

77.33

22.67

100.00

83.75

16.25

100.00

71.01

28.99

100.00


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Main Constraints to Become Entrepreneurs:

- Education- Heavy household works/responsibility

- legal, traditions, customs, cultural or religious

constraints- lack of access to formal credit and financial

institutions.


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Field Survey: Personal Motivation

Options:

(1) to be independent

(2) to explore or to develop own hobby/skill;

(3) because of difficulty in finding jobs

(4) to support family/household income or to add extra incometo husbands low income;

(5) to response to market opportunities;

(6) to continue family traditional business;

(7) to realize long personal wish or dream;

(8) want to be rich or famous.


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Total Respondents by Main Motivation/Reason to Undertake Own Businesses 2011 (person)


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Research Agenda

Issues:

what institutions facilitate or hinder women decisions to enterinto entrepreneurships?

do female entrepreneurs face more constraints than male

entrepreneurs in running their businesses?

are the majority of women entrepreneurs in Indonesianecessity entrepreneurs or opportunity entrepreneurs?

as Indonesia consists of more than hundred different ethnic

groups with their own local languages, cultures, traditions,

and adopted norms, does the intensity of women

entrepreneurship vary among these different ethnic groups?

Women Entrepreneurship in Indonesia: Constraints and Motivations (ongoing study)

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