Norimasa Shimomura and Batara Sianturi
Sun, May 30, 2021
When it comes to recovering from the economic downturn triggered by the COVID-19 pandemic, Indonesia should only seek to take advantage of its largest resources: the country’s 60 million more young and productive population, particularly young entrepreneurs.
But as the effects of the pandemic went beyond human health, the crisis has amplified existing threats to climate change, with pollution and extreme weather playing a key factor in worsening human well-being. Therefore, our path to recovery should place young entrepreneurs at the center of the climate discussion, as we try to reduce emissions and reduce consumption.
The strong participation of young entrepreneurs in the green recovery makes perfect sense, as entrepreneurship in Indonesia has long been a magnet for young people. According to a UNDP survey conducted in 2019, about 81% of young Indonesians surveyed said they were interested in starting a business. Another World Economic Forum survey found that more than a third of young people in the country between the ages of 15 and 35 want to become entrepreneurs.
In addition, young entrepreneurs in Indonesia have been building the initial landscape with more than 2,000 startups registered in 2019 alone, including several US $ 1 billion unicorns and even a $ 10 billion decacorn.
UNDP and the Citi Foundation are participating in the Youth Co: Lab entrepreneurship program, which saw more evidence of this potential last week at our third national meeting of youth entrepreneurs. During this meeting, many of Indonesia’s young and most promising entrepreneurs learned from the best experts on how to become Indonesia’s next major economic players.
Youth Co: Lab’s youth entrepreneurs have integrated their business practices with the goals of sustainable development. Among them, Sahabat Sanitasi Nusantara, run by women, develops ecological sanitation products to reduce water waste and Pipet Kite, founded by young women who produce sustainable straws. The other common feature is the use of digital technology to expand companies such as the learning application Komerce, which has supported more than 1,300 young people in digital marketing.
However, youth companies in Indonesia cannot thrive without a transparent business landscape and equal access for all to knowledge, capital resources, as well as comprehensive infrastructure support. One of the key findings of the national dialogue of our youth entrepreneurs is that capital owners are reluctant to invest in young entrepreneurs because of their inability to manage business financing and a low rate of financial literacy. This perception was evidenced by a recent survey conducted by the Financial Services Authority (OJK) which reveals that less than 40 per cent of young Indonesians have a strong awareness of financial literacy.
Young entrepreneurs will also rely on digital architecture and public infrastructure to overcome their movements in the green economy. But the latest findings from the Ministry of Information and Communication indicate that incubators located outside the main island of Java, where public infrastructure is generally more limited, tend to receive less support compared to their Java counterparts.
This image of inequality leads to the loss of opportunities for more young people working to address Indonesia’s social and environmental problems. Improved connectivity and infrastructure outside of Java can pave the way for youth-led business solutions to address greenhouse gas emissions, plastic pollution, and the protection of endangered species, including others.
Women entrepreneurs play a key role as we empower young people to become the “agents of change” in our green economic transition. Several studies have shown that women have expressed greater concern for the environment than men.
A special effort needs to be made to expand women’s participation in the green economy, therefore, to empower women, their leadership and their participation in the decision-making process. In this way, we can contribute to increasing incomes and, ultimately, to improving the working and living conditions of both young women and men.
Leveraging women’s voices also leads to a win-win situation for our growth. A recent study revealed that by closing gender disparities, $ 4.5 trillion can be added to gross domestic product in Asia Pacific countries alone. It is logical, then, that we expand resources for an inclusive green economy, where women’s capacities and leadership are fully mobilized.
During our national dialogues on youth entrepreneurship, the Indonesian government reiterated its commitment to boosting the youth business ecosystem. A promise makes us responsible for taking action. What is now needed are stronger joint actions to reduce the access to capital and knowledge gap, as well as the development of digital technology and improved policies that can encourage private and public investment in youth entrepreneurship and the green sectors.
The pandemic has given us a rare opportunity to redesign our economic workforce and transform it into a growth model that better protects our planet. As we take steps to rebuild ourselves from the pandemic, we should share the baton with young people to accelerate our transition to a waste-free, emissions-free economic model.
Youth empowerment programs can help equip them with the skills to meet the challenges of achieving a green future. But supporting Indonesia’s transition to a green economy – with young people as “agents of change” – remains everyone’s shared responsibility.
Norimasa Shimomura is a UNDP Resident Representative in Indonesia and Batara Sianturi is the Director General of Citi Indonesia.