ENTREPRENEURSHIP IN INDONESIA

Routledge Studies in Entrepreneurship

ENTREPRENEURSHIP
IN INDONESIA
FROM ARTISAN AND TOURISM TO TECHNOLOGY-BASED
BUSINESS GROWTH
Edited by

Edited by Vanessa Ratten

Vanessa Ratten

www.routledge.com

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9781032035246 Full Cover_HBK.indd 1 26-08-2021 12:16:07

Entrepreneurship in Indonesia

Whilst other countries in Asia particularly China and India have been studied
in terms of entrepreneurial endeavours, there is a lack of research on Indonesia
despite it being amongst the fastest growing economies in the world. Indonesia is
also one of the largest recipients of venture capital in Asia. This book looks at the
growth of entrepreneurship in Indonesia from artisan and cultural endeavours to
an increased awareness of digital and technology-based forms of entrepreneurship.
The book examines the distinct cultural heritage of people in Indonesia towards
entrepreneurial pursuits and analyses the role family and minority businesses play
in the development of entrepreneurial capabilities. It stresses the need to focus
on more categories of entrepreneurship in Indonesia such as artisan, tourism and
sustainability in order to facilitate the growth of digital-based startups.
This book will be amongst the frst to explore how Indonesia is leaping
ahead of competitors in its quest to be a dominant world power through its
entrepreneurial pursuits.

Vanessa Ratten is an Associate Professor at La Trobe University, Australia.

Routledge Studies in Entrepreneurship

This series extends the meaning and scope of entrepreneurship by capturing new
research and enquiry on economic, social, cultural and personal value creation.
Entrepreneurship as value creation represents the endeavours of innovative peo-
ple and organisations in creative environments that open up opportunities for
developing new products, new services, new frms and new forms of policy mak-
ing in diferent environments seeking sustainable economic growth and social
development. In setting this objective the series includes books which cover a
diverse range of conceptual, empirical and scholarly topics that both inform the
feld and push the boundaries of entrepreneurship.

Entrepreneurship in Spain
A History
Edited by Juan Manuel Matés-Barco and Leonardo Caruana de las Cagigas

Women and Global Entrepreneurship

Contextualising Everyday Experiences
Edited by Maura McAdam and James A. Cunningham

Digital Entrepreneurship and the Sharing Economy

Edited by Evgueni Vinogradov, Birgit Leick and Djamchid Assadi

Entrepreneurship in India
Alexander Newman, Andrea North-Samardzic, Madhura Bedarkar and Yogesh
Brahmankar

Entrepreneurship in Indonesia
From Artisan and Tourism to Technology-based Business Growth
Edited by Vanessa Ratten

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Entrepreneurship
in Indonesia
From Artisan and Tourism
to Technology-based
Business Growth

Edited by Vanessa Ratten

First published 2022
by Routledge
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© 2022 selection and editorial matter, Vanessa Ratten; individual
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The right of Vanessa Ratten to be identifed as the author of the
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British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
Names: Ratten, Vanessa, editor.
Title: Entrepreneurship in Indonesia : from artisan and tourism to
technology-based business growth / edited by Vanessa Ratten.
Description: Abingdon, Oxon ; New York, NY : Routledge,
2022. | Series: Routledge studies in entrepreneurship | Includes
bibliographical references and index.
Identifers: LCCN 2021022155 (print) | LCCN 2021022156
(ebook)
Subjects: LCSH: Entrepreneurship—Indonesia. | Economic
development—Indonesia.
Classifcation: LCC HC447 .E575 2022 (print) | LCC HC447
(ebook) | DDC 338/.0409598—dc23
LC record available at https://lccn.loc.gov/2021022155
LC ebook record available at https://lccn.loc.gov/2021022156
ISBN: 9781032035246 (hbk)
ISBN: 9781032035253 (pbk)
ISBN: 9781003187769 (ebk)
DOI: 10.4324/9781003187769
Typeset in Galliard
by Apex CoVantage, LLC
Contents

List of Tables vii

List of Figures viii
Acknowledgements ix
List of Contributors x

1 Indonesian entrepreneurship: origins, conceptualisation

and practice 1
VANESSA RATTEN

2 Artisan entrepreneurship in Indonesia 14

VANESSA RATTEN

3 Food artisan entrepreneurship in Indonesia 32

VANESSA RATTEN

4 Knowledge management and artisan entrepreneurship

in Indonesia 45
VANESSA RATTEN

5 Indonesian migrant entrepreneurs: a comparison of two

cohorts in Malaysia 57
HAMIZAH ABD HAMID

6 Technology entrepreneurship in Indonesia 78

VANESSA RATTEN

7 Cross-sectional study (period 2013–2016) of the factors that

identify entrepreneurship in Indonesia 92
MERCEDES BARRACHINA FERNÁNDEZ, MARIA DEL CARMEN
GARCIA CENTENO AND CARMEN CALDERÓN PATIER
vi Contents
8 Rural entrepreneurship and social innovation in Indonesia 103
VANESSA RATTEN

9 Indonesian entrepreneurship: Future directions 114

VANESSA RATTEN

Index 132
Tables

1.1 Major environmental efects on Indonesian entrepreneurship 6

2.1 Framework for Indonesian artisan entrepreneurship research 21
2.2 Types of Indonesian handicrafts 27
5.1 Sources of primary data for the study 63
5.2 Summary of supplementary respondents 64
5.3 Summary of the fndings 71
7.1 Description of variables 96
7.2 Results obtained from the logistic regression 98
9.1 Suggestions for future research on Indonesian entrepreneurship
in contextual terms 123
9.2 Future research areas for Indonesian entrepreneurship 126
Figures

5.1 Migration from Indonesia to Malaysia 61

5.2 The embeddedness of the migration and entrepreneurial activities 74
Acknowledgements

I thank Yongling Lam for her help and advice in editing this book about Indo-
nesian entrepreneurship that focuses on how it has transformed to be focused
both on artisan and technology ventures. Indonesia has always fascinated me.
When I started my frst year of high school, I chose to study Bahasa Indonesian
instead of the other European languages on ofer. The reason for this was due to
my mum’s interest in Asia especially given Indonesia’s close geographical position
to Australia. This was a good decision as I learnt to love the language and the
culture. Fortunately, when my family moved from Melbourne to Brisbane my
mum researched schools that taught both Indonesian and Japanese so I was able
to continue my studies. I was very lucky that my mum did this as there were only
two schools at the time that taught both languages and only one near the city
centre. My mum had the foresight to think about the importance of Indonesia
in the global economy and particularly for Australia which is located close to
Indonesia. I also continued my studies on Bahasa Indonesian at The University
of Queensland in conjunction with studying Mandarin. I ended up receiving a
Bachelor of Arts (majoring in Economics and Mandarin) in addition to my other
degrees. Thus, I dedicate this book to my mum Kaye Ratten. I also thank my
other family members David, Stuart, Hamish, Tomomi and Sakura Ratten.
Contributors

Maria del Carmen Garcia Centeno is a Professor at San Pablo CEU University,
Spain.
Mercedes Barrachina Fernández is a Professor at San Pablo CEU University,
Spain.
Hamizah Abd Hamid is a Lecturer at the Universiti Kebangsaan Malaysia,
Malaysia.
Carmen Calderón Patier is a Professor at San Pablo CEU University, Spain.
Vanessa Ratten is an Associate Professor at La Trobe University, Australia.
1 Indonesian entrepreneurship Vanessa RattenIndonesian entrepreneurship

Origins, conceptualisation
and practice
Vanessa Ratten

Introduction
A vast body of research exists on entrepreneurship in North America and Europe,
which has infuenced the way entrepreneurship is conceptualised and studied
(Adobor, 2020). This has meant most theories and conceptualisations of entre-
preneurship are premised on a developed country context. Entrepreneurship
occurs in diferent ways so it is important to consider other contexts. The stereo-
type of entrepreneurship occurring in only developed economies is not true as
it also occurs in emerging economies. Thus, in the past decade, there has been a
furry of interest in entrepreneurship in other contexts particularly in Asia. This
has led to the growth of studies on Asian entrepreneurship. However, most of
these studies focus on countries such as China and India so there has been limited
interest in entrepreneurship in other Asian countries. This book seeks to remedy
this by focusing on the Indonesian context, thereby ofering a novel and new
perspective on how entrepreneurship develops based on regional, cultural and
economic activity.
Entrepreneurship research in Indonesia presents a rich research domain by
ofering exciting research opportunities and the possibility of creating new the-
ory (Anggadwita, Ramadani, Alamanda, Ratten, & Hashani, 2017). Indonesian
entrepreneurship involves the creation and development of new ventures by
Indonesian people or people with a connection to Indonesia. This can involve
public, private, non-proft entities or a combination of all. The outcomes of Indo-
nesian entrepreneurship can extend beyond Indonesia, as globally much interest-
ing work on Indonesia is emerging. This growing body of literature is classifed as
“Indonesian entrepreneurship” and may include other geographic areas.
Indonesian entrepreneurship as a topic will continue to be a popular focus
of study. More researchers in Indonesia and globally will shift their attention to
studying entrepreneurship. This is due to the concept of Indonesian entrepre-
neurship attracting the attention of political and academic authorities and also
to the way entrepreneurship contributes to regional development and economic
growth. Researchers need to better understand what drives success in Indonesian
entrepreneurship. Success is based on subjective assessments of business activity so
it must consider cultural factors. This means that it can include the amount of

DOI: 10.4324/9781003187769-1
2 Vanessa Ratten
entrepreneurial activity taking place in a region or how entrepreneurship contrib-
utes to the social fabric of a place (Singh, Corner, & Pavlovich, 2007). As the
body of literature on Indonesian entrepreneurship develops, it is helpful to iden-
tify challenges for the future (Patria, Usmanij, & Ratten, 2019). These challenges
are based on the emerging body of knowledge on Indonesian entrepreneurship
that is still developing. As research on Indonesian entrepreneurship is still in its
nascent stage, its underpinnings remain based on traditional entrepreneurship
theory (Erista, Andadari, Usmanij, & Ratten, 2020).
This book responds to calls to advance the entrepreneurship feld by looking
at new contexts. By focusing on Indonesia, it extends our current knowledge on
Asian entrepreneurship by focusing more specifcally at the country-level con-
text. Currently whilst there is much anecdotal evidence about entrepreneurship
in Indonesia, the English written work on this topic is sparse. This means that
the conditions and timing are right for a book on Indonesian entrepreneurship.
Indonesia ofers unique opportunities for new insights into entrepreneurship to
emerge. Most existing entrepreneurship research is biased in terms of assuming a
free market economy and similar cultural conditions (Ratten, 2014a). This is not
always true as there is great diversity in entrepreneurship practices.
This chapter will provide an overview of Indonesian entrepreneurship by dis-
cussing the history and culture of the country in terms of how that afects business
activity. The role of entrepreneurship in society is then discussed that highlights
the need for an Indonesian understanding of entrepreneurship.

Indonesia
Indonesia is a fast-growing country with the number of people living below
the poverty line having decreased in recent years (Tajeddini, Ratten, & Denisa,
2017). This has led to an increase in the middle class and a booming economy.
The main ethnic groups in Indonesia are the Javanese, Sundanese, Madura and
Malay. Indonesia is the world’s largest Islamic state although it is a secular state.
Indonesia is located in the Indian and Pacifc oceans. It is on the equator so it
has a warm climate for most of the year. The main island of Indonesia is Java,
on which its capital Jakarta is located. Previously Indonesia was called the Dutch
East Indies when it was under Dutch rule. Indonesia was occupied by the Japa-
nese during World War II then granted its independence from the Netherlands in
1945. Indonesia includes a biodiversity unparalleled in other parts of the world.
Many of the islands are on tectonic plates and subject to volcanic activity. This
results in a diverse environment with a close proximity to the sea. Indonesia is the
largest country in Southeast Asia and has a tropical temperate. It shares a border
with Papua New Guinea and Malaysia. Many of the islands in Indonesia due to
their small size or location are uninhabited.
The rapidly transforming economy of Indonesia has kick-started an emphasis
on entrepreneurship. This has led to more people adopting an entrepreneurial
mindset with regards to business ventures. In addition, Indonesia has continued
to implement ambitious market reform, thereby further fuelling its economic
 Indonesian entrepreneurship 3
growth rate. This has lifted their economy and increased the standard of living
for many of its citizens.
The Indonesian economy has undergone a transformation in recent years with
more open trade and investment policies. Moreover, the growing middle class has
led to an increase in domestic consumption. Indonesia has a younger population
than other countries with a signifcant percentage of people under the age of thirty
years old. This has led to an increase in the percentage of people in the workforce.
In addition, there are strong intra-regional and international trade fows in Indo-
nesia. The more well-known tourist destinations in Indonesia are Bali, Lombok
and Komodo. However, most of the business and governmental activities reside
on the main island of Java. The main economic sector is the manufacturing sec-
tor including the chemical, textiles and transportation industries. The agricultural
sector is also important in terms of farming, fshery, forestry and plantation. The
mining and hospitality sectors also comprise a large percentage of the overall gross
domestic product. Indonesia in recent years has been amongst the world’s best
performing economies, and this is expected to continue in the future. Indonesia
is a relationship-driven market with business relationships based on trust. This
means that social networks are key to successfully doing business in Indonesia.
Indonesia consists of fve main islands: Java, Sumatra, Kalimantan, Sulawesi
and Papua as well as many smaller islands. Indonesia is the largest archipelago in
the world and includes more than 17,000 islands. This is in distinct contrast to
other countries that normally have one large connected landmass. As an archipel-
ago, the sea is important as it provides a way to travel between islands. Indonesia
is positioned between two oceans: the Indian and Pacifc. Most of the land in
Indonesia is mountaineous and in a sub-tropical climate. The Indonesian climate
includes a wet northwest monsoon that occurs between December and March
then a dry east monsoon from June to September. The warm climate impacts
the type of business activity practised in the country. There is a large percentage
of land covered in forest that means in many places there is fertile soil. The high
volume of rainfall means there is an abundance of land for farming. Indonesia has
an interesting history with the arrival of Hindu kingdoms, Indian Buddhists and
Muslim traders. The Dutch occupation of Indonesia lasted more than 300 years
and infuenced the development of the country. Many of Indonesia’s laws and
regulations are still based on Dutch law.
Indonesia is amongst the most populous countries in the world, but the popu-
lation distribution is highly concentrated on the main island of Java. At the heart
of Indonesia’s culture is the traditional decision-making rule called ‘musyawarah
dan mufakat’, which means mutual agreement and solidarity. The Indonesian
state philosophy is called the ‘pancasila’, which refers to the fve principal beliefs
of one supreme God, humanity, unity, democracy and social justice.

Entrepreneurship
There is no consensus about how to defne entrepreneurship, but most defnitions
imply that there needs to be innovation, proactiveness and risk taking involved
4 Vanessa Ratten
(Assudani, 2009). This means that entrepreneurship in any context means doing
something new related to a business activity (Ferreira, Fernandes,  & Ratten,
2017). Entrepreneurship is normally not only considered as a positive activity
due to the way it promotes job growth but can also be considered in a negative
context as it encourages risk-taking activity. Woodfeld et al. (2017: 123) defne
an entrepreneur as “someone who undertakes a project with assumed risk and an
economic outcome”. This means an entrepreneur difers from a business person
due to the way they engage in business activity based on a degree of risk (Ferreira,
Ratten, & Dana, 2017). Entrepreneurship is defned as “a set of personality traits
(such as, for example, need for achievement, locus of control, risk-taking propen-
sity, creativity) that, infuenced by external variables (such as level of education,
tenure, age, previous experiences, institutional and socio-economic factors) show
the attitude of a person toward the good governance and management of a frm”
(Gordini & Rancati, 2015: 172). This defnition highlights the personality traits
of entrepreneurs and the role of environmental contexts.
Entrepreneurship is based on perceptions in terms of how an entrepreneur car-
ries out their activities. A key characteristic of an entrepreneur is their willingness
to engage in risk. This means that they pursue business opportunities that have
uncertain outcomes. Therefore, an entrepreneur not only is perseverant but also
has a sense of independence in their business life. This means that they tolerate
ambiguity and are able to identify opportunities. There is much diversity amongst
entrepreneurs in terms of their psychological profle to the type of entrepreneur-
ship they are engaged in. This means that there is not a general way to describe an
entrepreneur as it rather depends on the context. Entrepreneurs can difer based
on gender, location and level of activity. Historically much research assumed
entrepreneurs to be men but this has changed with the emergence of research on
women entrepreneurship. Entrepreneurship studies have tended to be based on
developed country locations but this too has changed with increased interest in
emerging markets. Entrepreneurship can be corporate-based or the prerogative
of small business owners. This means entrepreneurship can vary from sporadic
activity to continual and lengthened forms of business development.
Entrepreneurship is a dynamic process that involves creating value. To do this,
business opportunities are exploited through innovative action. Entrepreneurs
are a catalytic agent of change as they enable new business models to emerge
in the global economy. Entrepreneurs have a number of personality traits such
as a willingness to persevere despite hardship and a sense of independence that
distinguishes them from non-entrepreneurs. This means entrepreneurs may be
regarded as organisers that pursue innovation. They initiate action through a
decisive mindset that enables ideas to progress in the marketplace. Efective
entrepreneurs are needed in all contexts but particularly in emerging economies
that are undergoing rapid industrialisation.
There is always some kind of risk involved in entrepreneurship but its nature
in terms of impact can vary (Ratten & Ferreira, 2017). This means that fnancial
risk is diferent from environmental or social risk. With any form of entrepreneur-
ship, the future is uncertain and cannot be predicted. This means that there are
 Indonesian entrepreneurship 5
fuctuating environmental factors that need to be taken into account. Innovation
in business activity diferentiates an entrepreneur from a manager.
Research into entrepreneurship has tended to focus on success instead of fail-
ure. This emphasis is surprising given the high failure rate for many entrepre-
neurs and the inherent risk involved in entrepreneurship. Failure is a stressful
life event that has implications for future activity. Individuals learn from failure
so for most entrepreneur’s success comes after many trials and errors. Entrepre-
neurs often have to adapt their initial idea to suit market conditions. This means
the initial envisioned opportunity changes as a result of market feedback. The
word ‘failure’ has diferent connotations depending on the context. In some
cultures, failure is treated as a badge of honour and is viewed as a learning
opportunity. In other cultures, it is considered more in a negative context as
it impacts on future behaviour. In a business setting, failure can have a small
afect or more substantial afect depending on the circumstances. This means
small failures can more easily be overcome whereas large failures in terms of
bankruptcy or insolvency take time to adjust. Failure generally refers to some
kind of deviation to the original results. This means that the desired outcome
is not achieved. Singh et  al. (2016) suggest that the two main recovery strat-
egies involving the grief process in entrepreneurship are loss-oriented and
restoration-orientation. The loss-oriented strategy involves taking practical steps
to recover. This can involve thinking about ways to utilise unused resources in
other endeavours. The restoration-oriented strategy involves avoiding thinking
about the failure and instead focusing on other activities. When entrepreneurs
fail, they can experience fnancial, psychological and social costs (Omorede, in
press). As a result of failure, an entrepreneur gains new insights and informa-
tion that can help them success in the future. Firm failure involves the cessation
of a business because it has been deemed unsuitable. This normally means the
business has not met performance expectations in terms of fnancial outcomes.
Failure can occur for a variety of reasons including not meeting proft expec-
tations or new technologies emerging in the marketplace. Entrepreneurs who
sufer failure may face stigmatisation that leads to psychological damage. These
negative emotions can be hard to overcome especially when the failure has hurt
the brand image of an entrepreneurs.
Matherne, Bendickson, Santos and Taylor (2020: 990) state that an individual’s
entrepreneurial personal theory “defnes how he/she views entrepreneurship and
entrepreneurial opportunity, arising through active learning from relationships
and experiences”. This means an individual evaluates entrepreneurship based on
how they perceive its impact. The impact is shaped by the individual’s involve-
ment in other environmental contexts. For entrepreneurs, their involvement
and understanding of market trends are important. Entrepreneurs use diferent
processes to make sense of opportunities. Sensemaking in terms of attributing
meaning to experiences enables entrepreneurs to identify gaps in the marketplace.
Table 1.1 illustrates the main environmental efects on entrepreneurship in terms
of institutions, market structure, frm-specifc and country advantages and inter-
national strategies.
6 Vanessa Ratten
Table 1.1 Major environmental efects on Indonesian entrepreneurship

Types Examples

Institutions Regulatory and political

• free trade agreements
Tax incentives
Access to markets
Political structure
Rule of law
Informal norms
Political leadership
Market structure Formal structure
• trade policies
• collaborative agreements
Informal structure
• trust systems
• family-based networks
Firm-specifc and country Weather and location
advantages Knowledge creation hubs
Distribution of industry
Dependence on technology for social interaction
International strategies Supply chain networks
Foreign direct investment

Emerging market entrepreneurship

Entrepreneurship is an independent feld of research with its own theories. Thus,
there needs to be a distinction between entrepreneurship in diferent country
contexts in order to derive a better understand. This has meant that research on
entrepreneurship in emerging markets has grown quickly due to interest in busi-
ness activity. Most of the foundations of entrepreneurship theory derive from
mature economy contexts with few studies on emerging markets (Jones, Klap-
per, Ratten, & Fayolle, 2018). This means that there is a reluctance of scholars
and practitioners to base assumptions on existing entrepreneurship theory due
to untested emerging market contexts (Ratten, 2014b). Emerging economies
are diferent from mature markets due to their political and cultural background.
This means that there is a need for more studies to focus on emerging markets
due to their unique contexts. The study of emerging markets is an impactful
research stream. During the past decade, there has been a fundamental change
in the international business world with countries including China and India
experiencing rapid economic growth. Other emerging market countries includ-
ing Indonesia are also set to experience growth in the next decade. Thus, the
evolution of the entrepreneurship feld needs to be cognisant of this change (Rat-
ten, Costa, & Bogers, 2019).
There have been key milestones in the emergence of emerging economies in
the entrepreneurship literature particularly around how they are perceived in
 Indonesian entrepreneurship 7
the literature. The main milestone has come from the realisation that emerging
economies need to be studied diferently to developed countries. Their history
and social signifcance in the global economy means they have unique features.
Therefore, rather than stereotyping all emerging countries as the same, they
instead need to be studied as separate entities.
Networks and relationships are important for entrepreneurship as they enable
resources to be acquired. In emerging economies, the social conditions mean
there is an emphasis on relationships. This embeds harmony amongst individu-
als in a community. Human connections are necessary for any economy but are
particularly relevant for entrepreneurs in emerging markets. This is due to human
interaction fostering business activity. Entrepreneurship has a historical setting
that is evident in the way individuals conduct business transactions.
The mainstream entrepreneurship research has neglected specifc countries
notably those in emerging economies. This gap seems to have narrowed in the
last couple of years with the increased emphasis on new country contexts. As a
result, new and diverse phenomena especially in emerging economies are being
emphasised. The identifcation and evaluation of entrepreneurial opportunities
are diferent in emerging economies. Entrepreneurship does not occur in the
same way in emerging economies as developed countries due to the additional
cultural and social diferences. This means entrepreneurship should be consid-
ered not just at one point in time but also occurring at multiple intervals over
a longer time period. Thus, entrepreneurial behaviour can fuctuate based on
market conditions. Entrepreneurship drives market growth and normally takes
the form of new business activity or the creation of additional business markets.
Entrepreneurial activity provides opportunities that are not normally available in
an existing market environment. This leads to the development of new innova-
tions in the business process.
Emerging markets are defned as “low income, rapid-growth countries using
economic liberalisation as their primary engine of growth” (Hoskisson, Eden,
Lau,  & Wright, 2000: 249). Not all developing countries are characterised as
emerging markets as their economic and social growth rate has not changed. This
means emerging markets are distinctive as the living standards of inhabitants are
increasing and there is a new middle class. However, in emerging markets, the
lack of infrastructure in terms of roads and internet access can represent a barrier
to entrepreneurship.
Research on entrepreneurship in emerging economies is uncommon. There
seems to be no signifcant diference between an Indonesian entrepreneur and an
entrepreneur from another country. Rather, like all entrepreneurs, their experi-
ence and access to resources are important. However, in Indonesia, there exists
a distinct business and social climate that is more conducive to entrepreneurship
than that existing in other countries. There has long been a debate in the entre-
preneurship literature about the role of context in infuencing entrepreneurial
behaviour. This arises from a practical need to know how to encourage further
entrepreneurial networks.
8 Vanessa Ratten
Entrepreneurship in Indonesia
Entrepreneurship can help resolve social and environmental challenges. The
literature on Indonesian entrepreneurship is still relatively sparse compared to
research on other country contexts. Entrepreneurship is a feld of study within
the social sciences and has largely developed from anthropology, psychology,
regional development and sociology studies. A  complete defnition of Indone-
sian entrepreneurship may never be agreed upon due to the multitude of factors
inherent in its conceptualisation.
The concept of Indonesian entrepreneurship has several interrelated facets. It is
not just about business ventures, but it also involves opportunity discovery. This
means the process can be synthesised into diferent aspects based on environ-
mental factors. We live in a world of digitalisation where increasingly most of the
business transactions are conducted partially or fully online. This has shaped how
we communicate with others and led to a digital-based culture. Until recently,
most of the scholarly work on entrepreneurship has focused on motivations or
reasons for individuals to behave in an innovative way rather than understanding
the context that makes an individual pursue entrepreneurial opportunities. This
book proposes that Indonesia represents a unique and valid context for studying
entrepreneurship.
Entrepreneurship has always been an integral part of the Indonesian economy,
a fact made evident by the number of new business ventures being established
in the country. However, the amount and degree of entrepreneurship evident
in Indonesia are obscured sometimes by the lack of research on the topic. This
makes the complex mechanisms behind entrepreneurship in Indonesia difcult
to understand. Entrepreneurship in Indonesia must be analysed separately from
other country contexts. Indonesia is undergoing rapid change making it neces-
sary to study the multifaceted business environment. In recent years, frms in
Indonesia have been forced to adapt to new challenges including changes in
consumer habits and living conditions. Therefore, the adaptation behaviour of
Indonesian consumers has resulted in a growing interest in entrepreneurship.
Entrepreneurs have been looking for new strategies in order to respond to mar-
ket needs and develop alternative income-generating activities. Entrepreneurs are
individuals who aim to maximise profts by identifying market gaps. The relation-
ship between an entrepreneur and their market environment is a complex sub-
ject, since the entrepreneur can be a manager, owner or licensee depending on
the circumstances. The methods used to analyse entrepreneurship in Indonesia
can be transferred from existing research in other country contexts. However,
when studying Indonesian entrepreneurship, its specifcities should be considered
including climatic conditions and political temperament.
The entrepreneurship existing in Indonesia mainly not only comprises a large
number of small businesses but also occurs in large business contexts. Entre-
preneurs play a crucial role in the Indonesian economy since they are the ones
who start and develop new businesses. The specifc cultural context of Indone-
sia makes it an interesting country to study the confguration of entrepreneurial
 Indonesian entrepreneurship 9
resources. Moreover, the impact of entrepreneurship on the environment, land-
use and landscape is diferent. This means the role of entrepreneurship is not only
to produce economic gain but also to create cultural change through monetary
pursuits. Research on Indonesian entrepreneurship can be evaluated in terms of
its cultural identity and institutional structure. Culturally, the historical evolution
of Indonesia as a republic and independent nation needs to be considered in
terms of its impact on entrepreneurship. This means understanding how historic
events helped shape and infuence entrepreneurship. In addition, the institutional
structure of the Indonesian economy means entrepreneurship is developed in
a diferent way. This means that the religious and community underpinning of
entrepreneurship needs to be understood.
Considering the incongruities in the literature on Indonesian entrepreneur-
ship, the objective of this chapter is to better comprehend its evolution in recent
years. Entrepreneurship in Indonesia is diverse due to the variety of business
activity conducted in the region. It is interesting to study the collective passion of
Indonesian entrepreneurs that continually evolve based on new market conditions
becoming evident in society. Entrepreneurs possess certain skills and traits that
diferentiate them from non-entrepreneurs. In times of social upheaval, entre-
preneurs have a tolerance for risk and ambiguity that enables them to quickly
respond to change.
Research on Indonesian entrepreneurship to date is dwarfed by the amount of
research on North America and Europe. Researchers thus know very little about
Indonesian entrepreneurship or the way entrepreneurs in Indonesia difer from
other country contexts. This remains the case despite the fast growth of the Indo-
nesian economy and its emphasis on entrepreneurship. Research on Indonesian
entrepreneurship represents an important contribution towards understanding
how country context infuences entrepreneurship, thereby highlighting the ben-
efts of a more global approach to entrepreneurship scholarship.
Indonesian entrepreneurship is sufciently distinguished from mainstream
entrepreneurship to argue that is a sub-feld of research in its own right. There
are two main perspectives in the entrepreneurship literature: the emergence and
opportunity school of thought. The emergence perspective views entrepreneur-
ship as a dynamic process that evolves over time. This means individuals acquire
ideas about entrepreneurial endeavours that put these thoughts into action. This
process does not necessarily follow any specifc path as it depends on the passion
and perseverance of the entrepreneur. The opportunity perspective is more well
known than the emergence perspective because it has been emphasised in recent
entrepreneurship literature. The opportunity perspective focuses on how ideas
are discovered, evaluated then exploited in the marketplace. Ideas can be discov-
ered in a variety of diferent ways including through experience or interaction
with others. Once ideas are discovered then they need to be evaluated in terms of
market potential. This can involve feasibility studies to understand the resource
requirements. The exploitation stage then involves commercialising the idea in
order to ensure its proftability in the marketplace.
10 Vanessa Ratten
Indonesian entrepreneurship involves the discovery and exploitation of busi-
ness opportunities in Indonesia. This involves creating new markets by evaluating
current business trends. Scholars and practitioners who study Indonesia from
an entrepreneurial perspective are studying Indonesian entrepreneurship. The
domain of Indonesian entrepreneurship includes both new and existing business
activities. It can involve any type of entrepreneurship ranging from the more
industrialised view of entrepreneurship to emerging forms of digital innovation.
Entrepreneurship is a multifaceted phenomenon as there are many ways busi-
ness activities can be innovative, risk taking and proactive. Therefore, Indonesian
entrepreneurship accommodates many diferent perspectives. The rise of Indo-
nesian entrepreneurship is connected to the culture, history and religious condi-
tions in the country.

Indonesian entrepreneurship: levels of analysis

To fully understand Indonesian entrepreneurship, the role of diferent levels of
analysis from the individual, organisation and network perspective needs to be
acknowledged. Individual entrepreneurs have diferent motivations for organisa-
tions and those in network relationships. Therefore, each unit of analysis should
be analysed in order to diferentiate how the country’s context infuences their
performance.

Individual level
Individuals and small groups of traders are essential to the entrepreneurial spirit
of Indonesia. Enterprising individuals establish new frms or grow existing frms.
They can be small business owners or gig economy entrepreneurs depending on
the business context. Entrepreneurs play a key role in rejuvenating regions and
areas in order to facilitate new business activity. Entrepreneurs are in charge of
exploring business opportunities and make a contribution to the economic devel-
opment of a region. Indonesian entrepreneurship has a strong cultural element
in terms of the way business ideas emerge in the community. Thus, Indonesian
culture plays an important part in business life and infuences entrepreneurial
activity. Cultural institutions including the church, school and government infu-
ence the type and number of entrepreneurs in society. Indonesian entrepreneurs
can use their culture in business endeavours. This means integrating cultural val-
ues in business.

Organisational level
There is a long tradition of entrepreneurship in Indonesia. This is due to the
emphasis on trading between the islands that comprise Indonesia. Moreover,
within each island of Indonesia, there is a culture of entrepreneurship that is
related to the local customs and traditions. The current research on Indonesian
entrepreneurship is sparse and from an English language perspective virtually
 Indonesian entrepreneurship 11
non-existent. Whilst there may be a lot of research on Indonesian entrepreneur-
ship written in Bahasa Indonesian, the predominance of English language jour-
nals and books means that it is not widely read. In order to rectify this anomaly,
more research on Indonesian entrepreneurship written in English will help to
grow interest in the feld. Entrepreneurship is a dynamic feld as it constantly
adapts to suit market conditions faced by organisations. Thus, there has been an
increased recognition of the vibrancy and relevance of entrepreneurship in Indo-
nesia. It is necessary to focus on organisational level phenomena in Indonesia as it
is agenda setting in terms of discussing future research trajections involving Indo-
nesian entrepreneurship. Indonesian entrepreneurship is complex with respect to
understanding what exactly constitutes entrepreneurship.

Network level
Research on entrepreneurship from diferent country contexts is increasing in
prevalence but there remains a lack of focus on emerging economies such as
Indonesia. It is important to consider Indonesian approaches to entrepreneurship
as it infuences the relevance of entrepreneurship research and the comparability
of fndings across countries. Uncertainty is a key characteristic of entrepreneur-
ship that is lessened through network relationships. The outcomes of entrepre-
neurial activity are not always known and often depend on luck. Failure can be a
precursor to success as it enables an entrepreneur to start again more intelligently.
At this point, we know very little about Indonesian entrepreneurship. Focus-
ing on the Indonesian context, there needs to be more emphasis on network
relationships.

Goal of this book

This book on Indonesian entrepreneurship ofers a comprehensive account of the
state of the art in the area of entrepreneurship and Indonesia. In doing so, it focuses
on the transformation of the Indonesian economy to a more entrepreneurial-
based society. It sets the fundamental principles of entrepreneurship by ofering
ideas and guidance for the road ahead. This includes ofering a wide range of con-
tributions from the area of entrepreneurship including service design, technolog-
ical innovation, business management, data analytics, resilience and innovation
mapping. Each of these topics is discussed from an entrepreneurship perspective
and explored in diferent ways.
The material covered in this book derives from research and practice, thereby
denoting scientifc relevance with practical implications. As the book is strongly
based on practice, it has signifcant practical value by presenting real-world appli-
cations. This enables cutting-edge innovations to be discussed that highlight the
relevance of entrepreneurs in Indonesia. This book comes out at a time when
entrepreneurship is being used as a way to solve societal problems arising from
the Covid-19 pandemic. Currently the global economy is centred on trying to
overcome the Covid-19 pandemic through a process of vaccination. This has
12 Vanessa Ratten
meant that many entrepreneurial policies are centred around Covid-19-related
issues. The preliminary analysis in Indonesia indicates that entrepreneurship is
increasingly apparent in business and society. Therefore, entrepreneurship acts as
a source of recovery and a light for future innovations. The Covid-19 pandemic
has impacted digitalisation and forced businesses to break with the past and imag-
ine new possibilities. The ethos of this book is that supporting entrepreneurship
with new ideas and a positive perspective will solve economic and social prob-
lems. This will help businesses create solutions that can be rapidly integrated into
the market.

Conclusion
This chapter has discussed the importance of studying entrepreneurship from an
Indonesian perspective, thereby ofering a novel view about the role of culture
and history in the development of an entrepreneurial culture. The role of context
in terms of geographical and social linkage to Indonesia was discussed in terms
of entrepreneurship. This enabled a theory of Indonesian entrepreneurship to be
built that also links with practice.

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2 Artisan entrepreneurship
in Indonesia Vanessa RattenArtisan entrepreneurship in Indonesia

Vanessa Ratten

Introduction
The craft industry preserves cultural traditions through connecting artistic
endeavours to economic gains. It does this by combining new and old elements
by linking historical processes to current artistic endeavours. This means that the
craft industry provides job and business opportunities that contribute to the eco-
nomic development of a region. Each artisan product is hard to replicate due to
the time and skills involved. This means that the key feature of artisan products is
that they are made to high-quality standards. To do this takes a skilled craftsper-
son who has had experience or training in the production methods.
Artisans are responsible for the entire process of designing a product to actu-
ally producing a product. Artisan businesses are small scale and are the opposite
of large-scale industrial producers. This means that artisans focus on quality and
a desire to make something that is culturally signifcant to society. This involves
thinking about the production process in a way that produces a unique product.
Artisan entrepreneurship is not limited to specifc crafts as it can occur in a wide
variety of contexts. The word ‘artisan’ is similar to ‘craftmanship’ but implies a
more intricate and thought-out design process. This means it includes skills not
often considered crafts such as cheesemaking but are part of cultural production.
Thus, artisans make a variety of products from cheese, cofee and bread to choco-
late and fashion. Moreover, the term ‘artisan’ implies some kind of design process
in which the aesthetic is important. This means craftmanship whilst being very
similar to artisanal activity implies a lower level of design activity.
Arias and Cruz (2019: 633) defne artisanal enterprises as making “products
made either completely by hand, or with the help of hand tools or even mechani-
cal means, as long as the direct manual contribution of the artisan remains the
most substantial component of the fnished product”. Artisan products provide
a link between the place-bound features of a region and the preference to con-
sumer local products. Increasingly authentic and rare products are preferred by
consumers particularly those who visit a region as a tourist.
Artisanship is often a lifetime project and interest for those involved. This
means the traditions and culture are associated with the skill mastery of an arti-
san. Arias and Cruz (2019: 634) defne artisanship as “an individual occupation,

DOI: 10.4324/9781003187769-2
 Artisan entrepreneurship in Indonesia 15
a social position within communities and a lifestyle career that included appren-
ticeship, several years of travelling and practice to master a craft, and the establish-
ment of a stable, independent enterprise”. This means it can take a long time to be
considered an artisan due to the efort required to learn the trade.
Only recently has more attention from an academic standpoint been given
to artisan entrepreneurship. Whilst the practical signifcance of artisan entre-
preneurship to regional development has been known for some time, academic
research particularly from an entrepreneurship point of view has been slower to
gain momentum. The aim of this chapter is to look more closely at the process
of artisan entrepreneurship in order to bridge the gap between practice and aca-
demic scholarship. This means focusing on the aspects and conditions that make
artisan entrepreneurship unique compared to other forms of entrepreneurship.
The creative economy is known for its entrepreneurship that is evident not only
in products but also in the type of business ventures that proliferate in the sector.
There is also a high degree of labour market fragmentation in creative businesses.
This means there are many self-employed or gig workers that diferentiate the
sector from other industries. Considering the socio-economic and cultural sig-
nifcance of artisan businesses a detailed insight into their entrepreneurial activity
is required. This will provide valuable advice for how artisan entrepreneurs oper-
ate in society and how policymakers can encourage further growth. Moreover,
such insights into artisan entrepreneurship can inform business support policies
and lead to more value creation. Artisan entrepreneurship is a label given to craft
or handicraft business ventures. This label refers to the cultural and heritage ele-
ment endemic in any artisan entrepreneur. Artisan entrepreneurs create products
by hand or are supported by tools. Therefore, this chapter focuses on answering
these research questions, which are divided into the following sub-questions:

1 How has artisan entrepreneurship changed over time?

2 What is the role of artisan entrepreneurs in community development?
3 How has artisan entrepreneurship changed based on certain environmental
contexts?

The creative industries

In the past decade, the role of creative industries has grown in the global economy.
Creative industries refer to businesses that have their economic activity derived
from a creative pursuit (Bakas, Duxbury,  & De Castro, 2018). This includes
entertainment and leisure activities that are based on creativity. The creative econ-
omy is gaining increased global recognition as an important driver of social and
economic growth (Chandra & Salimath, in press). Within the creative economy,
many individuals are self-employed and follow a lifestyle business model. This has
meant that the creative economy is a leading driver of employment, innovation
and economic growth. Summatavet and Raudsaar (2015: 31) defne the crea-
tive industries as “an economic sector based on individual and collective creativ-
ity, skills and talent and the ability to create welfare and jobs through creating
16 Vanessa Ratten
and using intellectual property”. Entrepreneurship is a key trait of the creative
industries in terms of establishing, maintaining then growing artisan businesses.
There are a range of businesses that can be considered as artisan including art,
design, information technology, music, performing arts and publishing. Artisan
businesses are highly diverse in nature with each one being unique. This means
that it is important to study each artisan business on a case-by-case basis rather
than making stereotypical assumptions.
Craft and artisan entrepreneurs operate in the creative industry, thereby
mostly focusing on handmade items (Hill, 2020). Many craft entrepreneurs
learn their skills through cultural connections that are passed down genera-
tions (Fillis, 2006). By creating tangible products, artisans often personalise
their work. This means although most of the work is handmade, there is also
support from machines or technology. Artisans create small batches of products
that are notable for their individual style (Hoyte, 2019). This is in contrast
to mass-produced goods that are not individually produced. This means that
many artisan products are unique and this characteristic diferentiates them in
the marketplace (Igwe, Madichie,  & Newbery, 2019). Artisan entrepreneurs
can be found in the brewing, food, glass work and pottery work. There has
been a resurgence of interest in artisan entrepreneurship due to more attention
being placed on handmade goods (Marques, Santos, Ratten, & Barros, 2019).
Individuals have more time for handicrafts and this has led to a growth in the
craft industry. An example of a handicraft industry is batik, which is discussed
in the next section.

Batik in Indonesia
Batik is a centuries-old technique of hand-dyeing cloth with patterns made from
wax. Many people in Indonesia wear batik on a daily basis and it is considered a
part of the culture. Batik is on the UNESCO cultural heritage list because of its
special relevance in Indonesian culture. Batik is continually evolving and adapt-
ing to suit new societal needs. Batik is made by applying a penlink tool or stamp
dipped in wax. This process is repeated many times in order to create complex
patterns.
Batik has made a resurgence in contemporary clothing and housewear. It
comes from the Island of Java where the technique originated from. The use of
batik can be traced back to the ancient Egypt and Tang dynasty in China. It came
to prominence in the 19th century in Indonesia. To make batik, patterns are cre-
ated by pouring hot wax onto undyed fabric. The fabric is then dyed and the wax
removed in order to show the patterns.
The process is then repeated with diferent colours or designs. The making of
batik is considered an artisan technique due to the knowledge required to make
the produce. Artisan batik makers use cantings, which are copper devices that
look like fountain pens to make patterns on fabric. They pour the wax very pre-
cisely and utilise traditional techniques to make the patterns. Some artisans also
use wood blocks or other devices to make patterns.
 Artisan entrepreneurship in Indonesia 17
The patterns on the batik denote diferent symbols or stories. Many patterns
are designed for visual appeal and their perceived beauty. Other patterns have
special meanings and can only be worn by certain individuals. This includes the
parang pattern that has knife-like symbols that only royals can wear. To use a
canting takes a high level of skill and practice. The canting can have diferent
sized sprouts used to make various shapes. The wajan is the container used to
hold the melted wax. Normally it is made of iron or earthenware and placed on
a stove in order to keep the wax in a melted state. It is important that the wax is
kept at a specifc temperature as if it is too hot it will spread too quickly and if it is
too cold it will clog the canting. Artisans often blow onto the wax on the canting
in order to cool it before applying it on the cloth.
The use of a canting to make patterns is a time-consuming process as it requires
specifc skills. The wax for batik can be beeswax or parafn. The cap or copper
stamp is made to use specifc designs on the fabric. Each cap is made from copper
strips into certain shapes. The dyes used in the making of batik primarily consist
of black, brown, blue and beige colours. Traditionally the colours were made
from plants and from natural ingredients. Artisans draw an outline of the pattern
onto the cloth before applying the wax. These designs can be created by hand or
traced from stencils. In order to apply the wax, artisans sit on a low stool or mat.
The fabric is placed over bamboo frames called gawangan in order to allow the
wax to dry. As mistakes are difcult to correct, artisans need to be experienced
when they apply the wax. After the wax has been applied, it is then placed into
earthenware tubs to be dyed. To make deeper colours the fabric is left in the tub
for a longer time period. To make new colours, the fabric is dyed again and the
wax reapplied. Normally batik has diferent colours so it is placed into the tub
multiple times. Batik designs are associated with religious ceremonies and tradi-
tional festivals. There are certain batik designs used in weddings.
The ceplok design is a series of geometric patterns based on circles, squares
or stars. It can also include fower or animal pictures. The design creates an illu-
sion of depth in the fabric. The kawang design consists of intersecting circles.
This design is also used on temples. Modern batik artisans are using new pic-
tures and designs. This includes the use of fowers and birds. Artisans no longer
have to use natural dyes so are incorporating new colours. Traditionally batik was
sold in lengths used to make traditional sarongs. This has changed with diferent
sized fabrics being made available in order to use on tablecloths and other home
furnishings.

The craft industry

McAuley and Fillis (2005: 139) state that the craft industry is part of the cultural
industry and includes “designer trades, book publishing, the music industry, tel-
evision and radio broadcasting, independent flm and video, the art trade and
cinema”. This means there are a range of contexts in which the craft industry
operates in society. These contexts involve varying degrees of entrepreneurial
activity that can take time to develop. The creative industries have traditionally
18 Vanessa Ratten
been considered as one of the most innovative industries due to the high level of
artistic expression. Within the craft industry exist a number of diferent types of
artisans who are involved in creating new products. The cultural industries are
linked to the culture and history existing in a region. This means embedded in
each cultural product is some form of heritage or tradition.
Craftspeople are central to the cultural and social fabric of Indonesia. They
have protected the cultural heritage by promoting the arts and crafts industry
(Fillis, 2010a). Craftspeople have endured despite the mass production of cer-
tain items becoming popular. They ofer a way to keep traditions by focusing on
historical and cultural signifcance in products. This enables cultural identities to
persist. Artisans difer from industrial producers due to the high level of manual
skill involved (Fillis, 2010b). This means that most of the products are hand-
made and take more time to produce than industrial products. The decorations
in terms of colour and design are also specifc to artisan goods. This means that
they are identifable not only by their design but also by the linkage to cultural
traditions. An artisan product is characterised by the way it is made (Kuhn & Gal-
loway, 2015). Indonesia has a long tradition of artisan entrepreneurship. Most of
these small frms are in the art, clothing and textile industry. Craftspeople have a
high level of creativity due to the way they design and source material.
People produce craft goods for fnancial, personal and social needs. The income
received from craft work often comes in the form of cash. This means it is linked
to the informal economy that is based on cash-based transactions. The word
‘craft’ refers to some form of activity that takes an artistic nature. This means
that it involves special skills that require time to develop. Craftmanship refers to
custom-made goods that are constructed in high-quality ways. Artisans employ
craft-based methods and manual techniques to make products. The craft-based
methods can include embroidery or knitting to make clothes or use handmade
techniques to make food. This means there are manual techniques in the design
and production process. Artisan goods are normally made in small batches and
take time to produce. Artisan goods embody a high level of quality in the way
they are produced.
The concept of artisan entrepreneurship involves craft-based business activity.
This means the artisan whilst involved in craft activity also makes the product for
fnancial or social gain. Normally the monetary incentive outweighs the societal
contribution of making the artisan product. Artisan products can be made via
the application of skill-based knowledge. This results in small-scale production
methods that emphasise thought in the entire production process. Industrial pro-
duction processes make products in a large volume without individualising each
product. Artisans whilst in the past did everything by hand now also sometimes
use machines. This makes the diference between artisan and industrial produc-
tion resides in the thought process towards the product. Therefore, artisan prod-
ucts have a set of values that emphasise quality and design. Industrial products
difer by emphasising large-scale production that results in quickly made products
that are of low quality.
 Artisan entrepreneurship in Indonesia 19
Artisans often have a desire to make something without thought for the out-
come. This makes them focus on the task at hand in a thought-out way, thereby
the work is done by unifying the head and hand. Artisans are not associated with
any specifc craft but rather are concerned with skilled production methods. The
work of artisans can refer to chocolate making to fashion goods. Artisans often
utilise traditions and practices associated with rural cultures. This ensures the
heritage of a region is maintained whilst making products through artistic expres-
sion. This can make the process slow and time consuming. However, the result-
ing product is made with efort and novelty. The products artisans make need to
be fuid and relative to cultural traditions. This means they bridge the past with
the present in terms of incorporating new design processes with cultural ideas.
Artisan products are socially constructed based on aesthetic and symbolic values.
This makes them distinct from ordinary goods that have a more functional mean-
ing. Artisan products bring the idea of craft through handiwork to the surface.
This makes the handiwork being part of the aesthetic nature of a product. Arti-
sans have a distinct philosophical approach to their production methods as they
try to incorporate cultural ideas. This means utilising traditional craft methods
rather than technological-based production. The main motivation for an artisan
is the artistic expression rather than a commercial need. This means the artisans
identity is typically tied to the product. Artisan entrepreneurs simultaneously play
the role of artist and business person. The most signifcant characteristics of arti-
san entrepreneurs involve the skill and craft that goes into the design and produc-
tion process. This means emphasising provenance and aesthetics in each product.

Artisan entrepreneurship
An artisan is a skilled craftmaker that creates products or services by hand. Arti-
sans learn through experience and their skills are often tied to tradition. Skills
processed by artisans are learnt based on their desire to create individualised
products. This means that as compared to mass-produced goods, artisan-made
products are unique. Whilst some products can appear similar in design, each
product will have diferent features. The term ‘artisan’ refers to an artist skilled
at making things by hand. This means there is a degree of creativity expressed in
each product. Artisans take pride in their work as they are conscious of the quality
of each product (Sawyer, 2000). This means artisans normally have a high level of
social consciousness in terms of how the products they are making are perceived
in the community (Tregear, 2005). This means there is a sense of social obliga-
tion to the communities in which they reside in order to preserve the culture and
tradition.
Artisans typically use simple and non-technology-related devices to make prod-
ucts (Taylor & Littleton, 2008). This includes painting implements, scissors or
carving to make decorative objects. Artisan products can be both functional and/
or aesthetic. Artisans produce things with their hands without using machines.
The word ‘artisan’ also refers to crafting and handcrafts. Many crafts have been
20 Vanessa Ratten
practised for centuries and artisans use the same techniques. Artisans can use
traditional material such as wood that has been in existence for a long time or
can recycle new material. In some artisan products, there is a cultural or religious
signifcance. The industrial revolution decreased the signifcance of craftspeople
in the economy. This meant there was a decrease in people making things by
hand due to the introduction of machinery. With the advent of the knowledge
economy, there has also been a change to more computer-orientated crafts, but
there are also many people still preferring handmade products.
Crowley (2019: 261) refers to artisan entrepreneurship as “the marketing of
creative assets in which manual techniques take precedence”. Artisan entrepre-
neurs produce products that have a strong link with a specifc place or culture.
This means that the craftmanship is associated with cultural practices. This difer-
entiates artisan products from mass-produced goods. Entrepreneurial behaviour
is evident at the micro, macro and meso level in artisans. At the micro level, the
focus is on how the individual artisan is entrepreneurial. This means understand-
ing the reasons for entrepreneurship and the way cultural factors infuence inno-
vative behaviour. At the macro level, the focus is on how economic or regional
factors infuence artisan entrepreneurship. Some regions might support artisans
more than others due to their impact on economic development. This is related
to the way artisan communities encourage tourism. At the meso level, it focuses
on societal factors infuencing artisan entrepreneurship. In times of crisis such
as that occurring during the Covid-19 pandemic, people have had more time to
spend on handicrafts. This has led to a surge in interest on artisan entrepreneur-
ship. Artisan entrepreneurs are normally tied to a specifc location due to cultural
or social factors (Pret & Cogan, 2019). This means that artisans use locally avail-
able resources in order to make their products. Depending on the type of product
the resources might only exist in a certain place and not be available anywhere
else. Artisan entrepreneurs value their independence and unique way of making
products. Artisan entrepreneurs difer from commercial entrepreneurs as they
place a high emphasis on personal well-being (Ratten, Costa, & Bogers, 2019).
This diference is a critical factor explaining the growth in artisan entrepreneur-
ship. In addition, there has been an emphasis on emotional well-being so artisan
entrepreneurship might relate to this topic (Ratten & Ferreira, 2017). The bal-
ance between work and life aspects is becoming more important in entrepreneur-
ial decisions. Table 2.1 depicts the framework for Indonesian entrepreneurship
research in terms of key themes and outcomes.
Artisan entrepreneurs play a crucial role in maintaining the cultural heritage of
an area. This facilitates economic and social development whilst preserving the
cultural conditions in an area. Entrepreneurship in general is viewed as a source
of innovation and growth. This means that artisan entrepreneurs provide a source
of growth that then has spillover efects to other areas of the economy. Artisan
entrepreneurs in recent years have fourished by focusing on craft-based initia-
tives. There has been a growing international awareness of cultural issues which
has led to increased demand for artisan products. Artisan products are viewed as
authentic and a way of providing a cultural connection.
 Artisan entrepreneurship in Indonesia 21
Table 2.1 Framework for Indonesian artisan entrepreneurship research

Research approach View of artisan Key themes Main outcomes

entrepreneurship

Sociology Systematic cultural Cultural and social Cultural and social

practice that management change
encourages
artistic
expression in
business practices
Artistic and Innovative Co-creation and Socio-cultural
cultural solutions to collaboration development
challenges cultural problems
Artisan Satisfying artistic Development of Cultural, social
development needs through relationships and community
fnancial gain between artisans cohesion
and consumers

Artisan entrepreneurs fnd ways to turn their hobbies into sustainable busi-
nesses. This means normally artisan businesses are lifestyle-based and tied to an
individual’s passion. Unlike other types of entrepreneurs who might focus on
proftability, artisan entrepreneurs also seek to integrate prosocial practices into
their business models. This means there is a sense of civic duty in their business
dealings that diferentiates them from traditional entrepreneurs.
Artisan entrepreneurs are normally small businesses operating at the local level.
With the advent of the internet, these businesses have been able to set up rela-
tively cheap websites to internationalise their business activities. This has led to
a community of like-minded artisans advertising their services online. Artisan
entrepreneurs are not often motivated by a quick proft due to the time it takes
them to make each product. Rather they are motivated by the enjoyment they
receive from the production of the product. Artisans can be classifed as lifestyle
entrepreneurs as they are interested in business activities that are conducive to
their way of life. To be classifed as an artisan entrepreneur, the mission of the
business needs to be artistic in nature and includes handmade activities. This
means the economic value creation is seen as a side product rather than the sole
reason or the business. In addition, artisan entrepreneurship is characterised by
hybrid elements of both cultural and fnancial motivations. This means that the
label of artisan refers to someone who is making a product with traditional meth-
ods. The process of making the product has a historical element as it normally has
occurred over a long time period. Moreover, the complexity of the combination
of cultural heritage with modern-day artistic elements makes artisan entrepre-
neurship unique.
Folklore and local heritage form part of artisan entrepreneurship. They provide
a valuable source of inspiration for the creation of artisan products. Entrepre-
neurship as a concept has tended to focus more on large-scale corporate ven-
tures rather than artistic endeavours. This has meant the growth in interest in
22 Vanessa Ratten
artisan entrepreneurship is a relatively recent phenomenon that has coincided
with more interest in the cultural and creative industries. Artisan entrepreneurs
are driven by cultural, social and economic reasons. Thus, artisan entrepreneurs
have tended to pursue a low or non-growth orientation as they are content
with their current business activity. Artisans are a special type of entrepreneurs
as they are more focused on cultural-based business ventures. This means they
focus on the production and sale of handmade goods that are tied to the cul-
tural aspects of a region. Furthermore, artisans practice certain forms of trade
that involve manual techniques. Although, more recently, these manual tech-
niques can be supplemented by the use of computer-aided techniques. This
means there is a great deal of diversity in terms of how artisans make and mar-
ket their products.
Artisanal knowledge is proprietary and often location dependent. This means
that the knowledge embedded in an artisan is of a specifc nature that takes time
to acquire. The skills an artisan has are the result of traditional production meth-
ods. To acquire this knowledge, artisans learn by doing or through training pro-
cesses. This makes personal judgement a key part of an artisan’s skill, thereby
creating an intimate connection between handmade activity and thought pro-
cesses. In addition, the knowledge an artisan has can be embedded within a local
pattern of interaction. This makes artisans acquire knowledge through intuitive
connections with their crafts. This makes the knowledge an artisan has be based
on frst-hand experience and social interaction.
Artisans individualise their products in subtle ways. Artisan businesses continue
to prosper despite widespread industrial production of goods. This is due to the
associated cultural link with artisan products. Whilst many artisans produce prod-
ucts for fnancial gain, there is also a growing number of artisans who produce
products as a voluntary or leisure-time activity. Some artisans have reinvented
themselves in order to produce alternative and individualised products. This cre-
ates economic and cultural value to society.

Artistic orientation of entrepreneurs

Purnomo (2020: 1) defnes artistic orientation as “the individual desire to make
artistic contributions in the form of original artwork or journalism, or in arts
studies”. This means that individuals who are more artistic tend to promote free-
dom of expression in their endeavours. This enables them to expand their art
into new and innovative areas. Artisan entrepreneurs tend to have some form of
artistic orientation due to them being in the creative industry. Artisans need to
consider both economic and artistic logic in their endeavours. Economic logic
is apparent when proft-seeking motives are integrated into the production of
artisan products. Artistic logic is evident when aesthetic concerns are paramount
in the design of products. This involves artisan products that have a high level of
beauty. Feelings in the form of emotions are part of the creative process. Every
artisan is afected by the way they feel when making their products. Positive emo-
tions are likely to be benefcial for the production of artisan products, whereas
 Artisan entrepreneurship in Indonesia 23
negative emotions might harm or delay the process. Artists are conscious of how
their emotions can be transferred into making products. Art refers to the pro-
cess and the resulting product stemming from the creative activity. Purnomo
(2020: 4) describes art as “the conscious use of skill and creative imagination
especially in the production of aesthetic object”. To make art normally some
form of expression is evident in the activity. This can include artistic movement in
dance, drawing on paper or using a chisel to carve patterns. There is some degree
of subjectivity in art as individuals consider some expression as art whereas others
regard it as normal activity. Moreover, traditional art can difer from modern art
so there also needs to be consideration of time and history in the decision.
Artistic expression is an essential part of society and is increasingly being used
in a business context. Products or services that embed an artistic spirit are valued
in society. This is due to the time and care taken to make them. Unlike mass-
produced products, artisan products are diferentiated by the time and efort
required to make them. This means consideration is given to the ingredients or
materials needed for their production. In an increasingly competitive market-
place, it is important for products to have a niche market appeal. Consumers are
becoming more discerning about the types of products they buy. This is infu-
encing a trend towards artisan products. Artisan products not only are made by
hand but also are unique in terms of their marketability. This means that they are
valued by consumers in the marketplace.
Many artisans exist at subsistence or poverty levels, but there are also lifestyle
artisans who have a higher standard of living. This means there are many difer-
ent types of artisans that can be distinguished based on their living conditions. In
emerging markets, artisans make products for survival reasons. This also happens
in developed countries, but there is also a trend towards opportunity entrepre-
neurs who make artisan products because of their interest in these products. Arti-
sans are socially important in communities as they contribute to the social fabric
of society. They maintain traditions whilst teaching others culturally valuable
skills. Artistic expression is embodied in the culture and history of a region. Arti-
sans employ craft-based skills that require time to acquire. Typically, this involves
hand stitching or handmade material that is used in the production process.
Artisans should use an agile business model in terms of constantly improving
their products based on new knowledge acquired. This involves experimentation
with ideas that result in better quality. Marketing agility is defned as “a frm’s
strategic means for executing growth activities by the marketing organization and
its members through simplifed structures and processes, fast decision-making,
and trial and error learning” (Homburg, Theel, & Hohenberg, 2020: 10). This
defnition emphasises agility in a marketing sense is a complex and ongoing activ-
ity involving diferent areas of a frm. To succeed in the global marketplace, being
agile is a valued frm trait. Kalaignanam, Tuli, Kushwaha, Lee, & Gal (2020: 36)
defne marketing agility as “the extent to which an entity rapidly iterates between
making sense of the market and executing marketing decisions to adapt to the
market”. Within this defnition is an emphasis on iteration in terms of obtain-
ing feedback then improving the process. This enables a frm to adapt to new
24 Vanessa Ratten
conditions by making sense of changing environmental conditions. Kalaignanam
et  al. (2020) suggest that marketing agility incorporates four main concepts:
sensemaking, iteration, speed and marketing decisions. Sensemaking involves
understanding information that is available. To do this requires reducing confu-
sion by analysing its core meaning. Due to unexpected events in the marketplace,
it is important to understand new developments. This can be hard to do due to
the existence of ambiguity. Therefore, it helps to establish a shared understanding
of the vent in order to make sense of what has happened. Iteration involves mak-
ing changes based on feedback and suggestions. This enables ideas to be refned
in order to perfect the idea. Before making decisions it helps to analyse the poten-
tial impact. This involves recognising the risks involved then trying to minimise
the impact. Thus, a frm can pivot and change based on developing events.
Speed involves how quickly an enterprise can adapt to the marketplace. Arti-
san businesses need to be fexible in their market approach due to the way
business is changing. The time taken to assess market changes then to initiate
action is important. Fast decision-making based on the knowledge available is
needed. This ensures that businesses can adjust to the market environment in
the right way. Marketing decisions involve making rapid adjustments to a frm’s
strategy. This involves obtaining the best results and benefts from a marketing
campaign.

Social networks amongst artisan entrepreneurs

Artisans are socially embedded in their community as they rely on social ties for
business activity. The social connections an artisan has enable them to overcome
liabilities of newness when growing their business. This means the social context
can help an artisan entrepreneur connect with like-minded people. This can facili-
tate market interaction and lead to more business opportunities. Artisans need
the social creativity that is derived from being a member of an entrepreneurial
ecosystem. This enables creative ideas to continue to fow in society and makes it
easier for artisan entrepreneurs to enter the marketplace. Creativity can take time
to develop and often needs to be fostered through social interaction.
Networks enable a range of participants to surpass normal boundaries in order
to cooperate. The connectedness in a network fosters the sharing of informa-
tion. This gives rise to new opportunities and increases innovation. Information
amongst network members is difused through the sharing of knowledge. This
form of knowledge transfer enables ideas to progress and the overall frm perfor-
mance to increase. Not all information shared in a network system is positive as it
can also constrain the activity of network members. This means knowledge needs
to be evaluated in terms of how it can be used to commercialise new ideas.
Networks are helpful in overcoming resource defciencies. This enables frms
to stay competitive by utilising their network relationships. Networks are defned
as “an infnite set of formal and informal relationships that lead to collaborative
actions between persons, groups, communities, organisations and governments”
(Kokkranikal & Morrison, 2011: 139). Due to rapid technological change and
 Artisan entrepreneurship in Indonesia 25
empowered customers, there is a need for artisans to utilise their networks to
facilitate better market transactions. These networks enable frms to leverage
resources and human capital in a way that is not possible by themselves.
Social networks provide a useful way of understanding the connections amongst
individuals in a group. Social networks are defned as “a specifc set of linkages
among a defned set of persons, with the additional property that the characteris-
tics of these linkages as a whole may be used to interpret the social behaviour of
the persons involved” (Baggio & Cooper, 2010: 1758). Within a social network,
there are a number of stakeholders that enable it to function. These stakehold-
ers refer to individuals or entities that matter. More specifcally, a stakeholder is
defned as “any person, group or institution that has an interest in a development
activity, project or program” (Baggio & Cooper, 2010: 1759). Stakeholders have
a vested interest in discussions about economic growth. This means they are
normally included in any decision-making process. Stakeholders are afected by
the objectives of a region and infuence its performance. Increasingly stakeholders
due to their legitimate interest in discussions are called activists. This means their
participation is a means of increasing the overall efectiveness of a region. Not all
stakeholders are equal as they vary in size. This means each stakeholder needs to
be considered in terms of their role in a network. A well-formed social network
enables stakeholders to have more input through a process of value creation.
Cavallo, Ghezzi and Sanasi (in press: 4) defne a value network as “any web of
relationships generating tangible and intangible value based on complex dynamic
exchanges between two or more network participants such as individuals, groups
or organisations”. Not all networks are positive as there are power dynamics exist-
ing. This means more powerful players in a network can obtain more value than
less powerful entities. Therefore, each network relationship needs to be evaluated
based on the level of interaction that leads to value creation. The value might
not be immediately known as it can take time for entities to transform ideas into
business ventures. This means it is helpful to view entrepreneurial ecosystems
as complex and messy due to the non-linear path they often take in the market-
place. Initial collaboration paths for entities in an entrepreneurial ecosystem may
diverge due to competing interests. This means that an ecosystem can be viewed
as a living system that constantly changes. Value can be negotiated amongst enti-
ties in an ecosystem based on need. This is due to value often being subjective
and dependent on the need of the business entity.
Artisan entrepreneurship research can be analysed in terms of three major levels
of analysis: frm, industry and community. At the frm level, it concerns individual
artisans and how they behave in an entrepreneurial manner. The focus is on the
individual or frm involved in the artisan activity. Analysing specifc characteristics
of individual artisans can help to understand their motivations for engaging in
business activity. Moreover, it helps to understand the socio-demographic infu-
ences of artisan entrepreneurship. This includes the age, gender and location of
an entrepreneur. The industry level focuses more at the industry efects of artisan
entrepreneurship. This includes whether the artisan business is in the tourism,
health or retail industry. There are diferent industry efects in terms of intensity
26 Vanessa Ratten
of competition that infuence artisan activity. For artisan businesses located in
rural areas, the location might lead to associations with tourism. This means it
is useful to analyse the entrepreneurial ecosystems associated with an artisan in
terms of understanding the related efects of other stakeholders. This includes
government ofcials, other businesses, regulatory authorities and research insti-
tutions. Each of these stakeholders will contribute in their own way to the level
of entrepreneurial activity in a region. As artisan businesses often involve col-
laboration with non-proft or government agencies, it can also be useful to use
an entrepreneurial ecosystem analogy to understand the efects. The community
level focuses on the societal infuences of artisan entrepreneurship. Due to the
Covid-19 pandemic, people have spent more time at home. This has led to an
increase in handicrafts and home-based hobbies.

Handicraft industry
Handicrafts are sometimes viewed as a hobby or folk art although for many they
are also a source of income. Handicrafts require specialised knowledge and hours
of training. This can include highly technical information that needs special-
ised facilities for production. Handicrafts can be perceived as being useful or art
objects depending on the context. Increasingly people are learning handicraft
skills for pleasure rather than for purely fnancial reasons.
The explosion of interest in artisan products has coincided with the Covid-19
crisis. More people working at home has meant for many more time to pursue
home-based crafts. Moreover, individuals in the tourism and hospitality sectors
have flled their time by focusing on creative pursuits due to lockdown and work-
ing restrictions. At the same time, individuals are more interested in nostalgic and
homemade items that have a cultural link. This has led to an increase in hobby-
based artisan businesses that enable individuals to earn money whilst pursuing a
hobby. During the Covid-19 crisis, more artisans are selling their products online.
This has opened up new marketing and selling channels that were previously not
considered. The artisan economy has been praised as a way to combine cultural
pursuits with fnancial gain. This is viewed as a sustainable and ethical business
strategy as compared to mass industrialisation practices. The artisan economy
enables more localised and community-minded economic activity.
There are various types of artisans including those who view their business as
more of a hobby rather than a source of fnancial income. These hobby entre-
preneurs have increased during the Covid-19 crisis because they have spent more
time indoors and at home on craft activities. Other types of artisans include those
who are more business minded and rely on their business as their main source
of income. These include artisan food producers who create specialist food such
as cheese or honey. There has been an increase in interest by consumers about
knowing where and how their food has been grown. This makes it important for
artisan food producers to highlight the authentic nature of their product. There
are many diferent types of handicrafts such as food, home goods, paper goods,
wood and textile making, which are stated in Table 2.2.
 Artisan entrepreneurship in Indonesia 27
Table 2.2 Types of Indonesian handicrafts

Type of material Examples

Food Cake making, egg decorating, cheese making

Home goods Basket making, candle making, quilting,
soapmaking
Paper goods Bookbinding, card binding, origami, paper-mache,
stamping, scrapbooking
Wood, metal, clay, glass, Carpentry dollhouse, enamelling, glassblowing,
stone goods jewellery, puppet making, sculpture, stained
glass, toy making, word carving
Textile making Banner making, batik, cross-stitch, crochet,
embroidery, knitting, lace making, embossing
leather, macrame, needlepoint, rug making,
saddle art, silkscreening, tapestry, t-shirt art

Artisanal food
Lindbergh and Schwartz (2021: 150) state that “artisanal food is produced on a
small scale, usually grown and harvested locally, and emphasises tradition, authen-
ticity and craftmanship in both production and favour”. This means, unlike mass-
produced food, artisan food is carefully made in line with cultural considerations.
Therefore, it connects food to culture in a way that is not evident in other forms
of food production. In addition, the emphasis on tradition ensures that the food
is similar to that made by previous generations. This continuity in culture is a key
feature of artisan food and the reason for its popularity. Moreover, the craftman-
ship ensures that quality considerations in terms of taste are considered.
Local food systems can be complex due to the need to make products in an
efcient way whilst maintaining quality. As a result, there are competing logics
of commercial ability and authenticity that are challenging to manage. Such
competing logics create tension in artisan entrepreneurs’ everyday activities.
Artisan food is sold in a variety of settings including farmers markets, supermar-
kets and online stores. However, the increased interest in farmers markets has
made artisan food more popular. This has coincided with food trends such as
local and organic farming methods. The number of artisans in the economy is
increasing due to more people becoming interested in the craft industry. Arti-
sans are motivated by creative pursuits that do not involve complex technology.
This means their production methods are normally basic but can involve a high
level of skill.
Arias and Cruz (2019: 636) state that artisanal chocolate production “can
be comprehensive (e.g. growing, processing and transforming cacoa beans into
chocolate products) or partial (e.g. acquiring processed cacoa beans to artfully
create diverse chocolate confections”. Popular artisan food products include con-
fectionery such as chocolate. Artisan-made chocolate is handmade with locally
distinct ingredients. Increasingly artisan chocolate is being appreciated due to the
28 Vanessa Ratten
difculty in the production methods. This is because of the mastery of produc-
tion techniques needed to make artisan chocolate.

Craft beer
There has been a rise in interest in craft beer due to its varied brewing techniques
and new favours. This has led to more independent breweries developing to cater
for this growing market. Whilst traditional artisan brewing has existed for a long
time, recently there has been a resurgence in interest. The quantity produced
by craft beer manufacturers is typically low with their products having more of
a creative appeal. Craft beer refects the desire to create niche products that are
refective of cultural practices. This means the ingredients in craft beer tend to be
made from more natural or herbal ingredients. In addition, craft breweries have a
more fexible approach to the way beer is made. This enables them to be able to
experiment with new favours and tastes. The emphasis in craft beer is on quality
through traditional brewing methods. Craft brewers have more unique methods
of fermenting that enable them to produce a diferent taste. Before the introduc-
tion of large commercial breweries beer was produced at the location in which it
was sold. Some craft breweries have reintroduced this practice as a way to connect
with customers. The overall beer industry has grown at a fast pace over the past
decade. In conjunction with this trend has been craft breweries that diferentiate
their products based on unique tastes. The vast majority of craft breweries tend
to be micro-businesses that employ a small number of people. This is due to some
craft brewers being interested in brewing more as a hobby rather than as a purely
commercial endeavour. This means that entrepreneurs establish a craft beer busi-
ness due to their enthusiasm. As a result, craft beer produced is not standardised
but subject to individualised outcomes. Craft brewers tend to use new ingredi-
ents or recipes to further diferentiate their products. The popularity of craft beer
has led to them being acquired by large breweries.

Jamu
Jamu is a traditional herbal medicine popular in Indonesia. Its ingredients are
normally sold in bottles and include natural materials such as fowers, honey,
leaves and fruit. It is recognised as one of Indonesia’s intangible cultural heritage
as it represents a cultural practice prevalent in Indonesia. Jamu is most preva-
lent in Java where Javanese women travel house to house selling herbal medi-
cines. Often Jamu is sold on the street as a drink sweetened with honey or sugar.
More recently, it is sold in stores in satchel packaging that requires water before
drinking. Jamu medicine varies from region to region and is often not written
down but passed down generations through verbal communication. Due to the
abundance of herbs and spices in Indonesia, there has been a strong interest in
Jamu. The increasingly health-conscious middle-income bracket has infuenced
the increase in domestic sales.
 Artisan entrepreneurship in Indonesia 29
Jamu drinks are typically made with turmeric and ginger. Jamu as a traditional
herbal medicine has been practised for centuries in order to treat disease and
maintain health. Despite the increased usage of conventional medicine treat-
ments, Jamu is still very popular. Indonesia has a high number of indigenous
medicinal plants that can be used in traditional herbal medicines. Jamu means
traditional medicine from plants. Jamu gendong are freshly prepared jamu sold
in warungs. A  warung is a small business existing in Indonesia that is part of
everyday life. Many warungs are family owned and operate from a room in a
family’s home. Warungs refer to small neighbourhood convenience stores. There
are diferent kinds of warung from those selling local food snacks to other daily
necessities. Warung kopi are cofee shops that also serve a social function. Warung
jamu are stores that sell traditional herbal medicine.
There has been an increase in more larger scale and modern production meth-
ods to make jamu. Jamu is based on traditional knowledge and experience mak-
ing it an integral part of the Indonesian healthcare system. Jamu is an inherent
part of Indonesian culture and is a long-standing cultural tradition. During the
Covid-19 pandemic, the demand for jamu has increased due to people wanting
to boost their immune system. In Indonesia, most of the jamu sellers are women.

Conclusions
This chapter has sought to answer the following question: What is the role of
artisan entrepreneurs in the global economy? To answer this question requires
refective thinking about how artisan entrepreneurs difer to other types of
entrepreneurs. I  close this chapter with three main observations about artisan
entrepreneurship. The frst concerns the research trajectory of artisan entrepre-
neurship. In moving the feld of entrepreneurship forward, it is important that
future research takes new paths. This means emphasising creativity in thinking
about new topics like artisan entrepreneurship. I  urge researchers and practi-
tioners to refect on how they conceptualise and measure artisan entrepreneur-
ship. This will help to develop new conceptual work based on theory that can be
empirically tested.
The second observation is on placing more emphasis on theory development
about artisan entrepreneurship from diferent contexts. Theory-building eforts
are important in developing a new research efort. This means that a theory of
artisan entrepreneurship can be derived based on existing literature from the cre-
ative industries and entrepreneurship felds. A broad spectrum of literature can
then be consulted on in terms of developing a comprehensive defnition of artisan
entrepreneurship. Artisan entrepreneurs may difer based on industry structure
and geographic location. Thus, a new theory that starts with an existing theory
that is then applied to an artisan environment may provide useful results. There
should be some academic freedom in developing theory related to artisan entre-
preneurship. This will enable new practices to emerge that is consistent with
real-life experience.
30 Vanessa Ratten
The fnal observation is about the critical role of conceptual development.
Entrepreneurship as an academic feld is relatively new compared to other felds
such as economics and sociology. This means that, in order to progress knowl-
edge, there should be new concepts emerging in the literature. Conceptual con-
tributions about artisan entrepreneurship will contribute to entrepreneurship
research and thought. This will help motivate others to research artisan entrepre-
neurship because of the prospect of generating exciting ideas.

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3 Food artisan entrepreneurship
in Indonesia Vanessa RattenFood artisan entrepreneurship in Indonesia

Vanessa Ratten

Introduction
The culture of Indonesia is a result of its rich history and interaction with other
societies. This means there are art, furniture and cultural events associated with
its traditions. Many cultural events are associated with folklore (Jones, Klapper,
Ratten, & Fayolle, 2018). Indonesians have a strong tradition of preserving their
cultural heritage through the production of handicrafts and food. This tradition
has been linked to the customs and culture existing in a region. Despite the
industrial revolution and increased emphasis on modernisation, there is still a
strong interest in the production of handicrafts (Ratten, 2014). The centuries-
old artistic legacy is preserved in Indonesia through the making and selling of
artisan goods. Indonesia is known for its artisanry in its products due to the
artistic and creativeness of its people. There are many artisan products in Indo-
nesia that are made by craftsmen and women who have a desire to keep cultural
traditions alive whilst making a fnancial income.
Indonesia is a country located in Southeast Asia that has a large population but
relatively small landmass. Indonesia is amongst the largest producers of handi-
crafts. This includes carved fgures, placemats and other decorative objects. It has
a rich heritage of making artisan products. Artisans have evolved and changed in
the past decade but still keep the same production methods (Santos, Marques,
Ferreira, Gerry,  & Ratten, 2017). Their marketing and sales techniques have
altered to keep up to date with digital technology. Artisan-made products are
a way of life in Indonesia and a way of integrating craft with business pursuits
(Santos, Marques, & Ratten, 2019).
This chapter provides three theoretical contributions to the artisan entrepre-
neurship literature. First, it is amongst the frst to embed an entrepreneurial pas-
sion perspective, thereby connecting the artisan literature to a new stream of
research. Artisans are inherently passionate as many pursue their craft because it
is a hobby. This means passion is evident in the way they structure and manage
their business. Second, it contributes to an emerging line of literature on artisans
and the entrepreneurial process. This means focusing on the way artisans develop
their business based on emerging environmental conditions. Third, this chapter
makes a contribution to the literature on entrepreneurial identity by adding a

DOI: 10.4324/9781003187769-3
 Food artisan entrepreneurship in Indonesia 33
creative perspective. This enables more focus on how creative individuals such as
artists and craftmakers pursue entrepreneurship.

Artisan production
An attempt at defning the word ‘artisan’ is made difcult due to the lack of aca-
demic research on the topic (Phillipov, 2016). The word is commonly used in
practice to refer to a person making a handmade product using cultural elements.
This means an artisan is a small-scale producer whose intuitive judgement enables
a product to be made (Milanesi, 2018). Thus, there is a high degree of skill and
knowledge in the production process. Unlike manufactured products that use
mechanised and automated methods, an artisan individually makes each product.
This results in care and attention placed in the making of each product.
Artisans produce products that not only incorporate cultural and historical ele-
ments in their products but they can also include intangible cultural elements
such as folkstories and myths. Culture is a complex and highly social phenom-
enon that infuences society. The idea of authenticity is important to artisans as
it infuences the reputation of their products. Consumers are searching for more
authentic and genuine products. Authenticity is a subjective notion that depends
on an individual’s perception about its meaning. Thus, an artisan product can be
viewed as being authentic based on an individual’s social conditioning. Tradi-
tional crafts have played a crucial role in defning a region to the rest of the world.
Cities and towns are known for their crafts, and people travel to these regions
because of the brand name recognition (Ferreira, Fernandes, & Ratten, 2017).
Despite their increased usage of information technology, many regions retain a
strong craft identity. Artisans often viewed commercialisation as undermining
their reputation and image in the marketplace. This led to conservative growth
strategies of an unplanned nature. The origin of artisan products is in the authen-
tic use of production methods. This means that a simple process is used to create
products. Artisans use their skills to make products in a unique way, and this can
include aesthetic pleasing designs that are culturally distinct or functional designs
based on usefulness.
Artisan production is a form of creative expression and serves as a source
of income for many people. Craftwork enables a person to work in a cultural
industry, thereby providing a source of economic and cultural beneft. Artisans
normally have a preference for making unbranded and personalised products.
Although sometimes these products are branded to show their authenticity, there
is a sense of simplicity in artisan products although the process to make them can
be quite complex. Artisan products are characterised by their locality and trans-
parency. The locality refers to where the product is made and how culture tradi-
tions have infuenced the production process (Ferreira, Ratten, & Dana, 2017).
The transparency refers to the openness of what materials and processes were
used to make the product. Therefore, provenance does matter in artisan goods as
it determines how they were made and produced.
34 Vanessa Ratten
Consumers often buy artisan products because of their link to a culture or
region. This means they are willing to pay a higher price for a product that is
made in a specifc region or by a special technique. Artisans are sometimes con-
sidered as hobbyists who charge lower prices due to them not being as fnancially
motivated as other producers. This means they are artisans as a hobby and have
other ways to produce an income. There are increasing numbers of artisans who
are hobbyists due to their interest in work/life balance. This means they forego
proft maximisation in return for being involved in the making of artisan prod-
ucts. They are not concerned with the quantity of goods sold but rather inter-
ested in artisanry as a hobby. The next section will discuss in more detail the role
of food in Indonesian culture.

Indonesian food
There is a great deal of variety in the food found in Indonesia. This stems from
Indonesia’s colonial, immigrant and indigenous history. Indonesian food is rich
in spices, and rice is the staple food for most of the people. A famous Indonesian
condiment is sambal, which is a paste made from various spices. In Indonesia,
there are rumah makan (eating houses) that are informal restaurants. In addi-
tion, there are many warung, which are street stores. Nasi goreng (fried rice) is a
popular dish as well as gado gado (vegetables with peanut sauce).
Indonesian culture is focused on the community with the national motto being
Bhinneka Tunggal Ika, which means unity in diversity. It is mentioned in the con-
stitution of Indonesia and is considered a way of life. This emphasis on diversity is
evident in the wide range of foods available in Indonesia. Indonesians believe in
the concept of gotong royong, which means mutual assistance. Therefore, there
is a strong emphasis on collaboration in business activities.
There is much regional variation in food in Indonesia due to the existence of
diferent ethnic groups. Most of the meals in Indonesia consist of two main dishes
and a broth or soup. The main dishes are served with rice or noodles in a tradi-
tional way. Many meals are also served in a communal way. There are diferent
kinds of ceremonies and rituals linked to food activities in Indonesia. The tropi-
cal fruits in existence in Indonesia include durian, which are spiky, smelly fruit.
Rambutans which are red fruit covered in soft spices are also popular. Belingbang
(star fruit) are common as they have a cool and crisp taste. Jambu air (water
apple) is a pink bell-shaped fruit that is often served as a side dish or dessert.
As the majority of Indonesians are Muslim, eating kolak (fruit in coconut milk)
after the Ramadan festival is popular. Lesser Eid or Lebaran marks the end of
Ramadan. During this time, festive meals and social gatherings are popular. Dur-
ing this time, ketupat (rice in packets of woven coconut) are consumed. Lebaran
is a national holiday in Indonesia and lasts for two days. On the day of leb-
aran after morning prayers, people will greet others by saying ‘selamat idul ftri’
(Happy Eid). Families will normally also have special food on this day. Idul Adha
or festival of sacrifce is celebrated after lebaran. During this time, a sheep or goat
is sacrifced and the meat is shared amongst family and friends. In Bali that has a
 Food artisan entrepreneurship in Indonesia 35
majority Hindu population, food is used for symbolic reasons. This means rice in
woven banana leaf packets are placed where a god or spirit may reside.

Art and artisanship

Artisan products have a human element and a sense of art. Chakrabarti (2020:
135) states that “art is innately multifarious and embodied in people, com-
munities, cultures and histories”. Art is a universal concept that has expressive
properties. This means art is a way of communicating to others through design.
Art is subjective so it refers to any kind of activity that shows some degree of
expression. This means activities such as drawing, writing, playing music, dance,
poetry, pottery and sculpture are all considered as art. Art is similar to craft but
normally refers to a non-functional process, whereas craft implies a practical
usage. This means a craft incorporates some kind of knowledge and skill that
takes time to develop. Folk art incorporates both craft and art as it refers to
cultural expression. Cultural heritage refers to “an efort to conserve not only
physical objects but also intangible elements such as art, language and customs”
(Chakrabarti, 2020: 137). Preserving cultural traditions is important in many
societies. This means that recognising the value of historical traditions such as
artisans and art makers is valued. The production of art requires some form of
creativity and imagination. Thus, it can be used as a way to share information.
As art can have a number of diferent meanings there are limitless ways to how
it can be produced.
Communal approaches to art require a number of people working tougher
on a project and help to build a sense of community. Artists take pride in their
work in terms of its aesthetic appeal or usefulness. Art can be spiritual and have
religious meanings. Therefore, care needs to be taken by those who hold strong
beliefs about the meaning of art. Chakrabarti (2020) suggests that cultural iden-
tity in art can take an anthropocentric or cosmocentric point of view. The anthro-
pocentric views humankind as being the key enabler in the universe. This means
people have the most important position in society and can make societal trans-
formations through art. The cosmocentric views the ecological environment as
being the key enabler and acknowledges the interaction between humans and the
natural environment.
The creative economy represents an important way to combine creative and
business pursuits (Ratten  & Jones, 2021). It is a global driver of economic
growth and contributes to a region’s competitiveness. The sector is known for
its hobbyist nature with many involved in businesses that combine work and life
interests. This means there is a high number of self-employed artisans or micro
artisan businesses that employ a small number of people. Hobbies are activities
an individual enjoys pursuing in their leisure time. They provide a sense of enjoy-
ment and relaxation without any sense of obligation. The voluntary nature of
engaging in a hobby means that it involves a sense of passion. This enables an
individual to identify with a challenge then pursue it in their own time (Ratten &
Usmanij, 2021).
36 Vanessa Ratten
Artisan entrepreneurs are part of the creative and craft industries. Artisan
entrepreneurs difer from other types of entrepreneurs due to the way they make
products through handmade processes. Hobbyist entrepreneurs pursue their pas-
sion through business pursuits. This means the initial business venture might
develop more casually and in an informal manner. Hobbyist entrepreneurs tend
to be involved in business as a side activity rather than full-time pursuit. This can
change over time depending on how the business develops. Hobbyists create
their products using ingenuity and novel ideas. This means there is a degree of
experimentation involved in the development of each product. The slow process
involved in making a product by a hobbyist ensures a carefully produced good.
However, the long time taken to make each product can result in production
delays. This means some form of adjustment or adaptation is needed when a
hobbyist becomes an entrepreneur. The production of a product by a hobbyist
is a passion rather than solely a fnancial output. Many craftspeople are part of a
group or team of like-minded people. Being part of a team is useful in sharing
resources and ideas. It can also enable better market opportunities to be captured
through the pooling of creative abilities or talents.

Artisan entrepreneurship
Entrepreneurship is a dynamic and not static activity as it evolves over time. Rae
and Carswell (2001: 152) defne entrepreneurship as “the process of identify-
ing opportunities for creating or releasing value, and of forming ventures which
bring together resources to exploit those opportunities”. Entrepreneurs learn
through experience about how to recognise and act on opportunities. An artisan
entrepreneur is a person who has a deliberate strategic intent to pursue market
opportunities. This means they recognise novel opportunities in the marketplace
then exploit them through the creation of business ventures. Entrepreneurship
is a mindset that is used to engage in business activities. It involves creating or
developing an economic activity based on innovative ideas. Each entrepreneur
has their own personal characteristics and managerial strategies that are used for
business purposes. The notion of entrepreneurship has changed over time due
to new business activities emerging in the marketplace. The entrepreneurship
literature difers between necessity (those who have to start a business because of
fnancial reasons) and opportunity (those who choose to start a business based on
perceived market gap) entrepreneurs.
A lifestyle entrepreneur is an individual who is motivated by personal needs in
pursuing a business activity. This means the personal interests are more impor-
tant than fnancial goals. Increasingly lifestyle reasons such as being independent,
leading a healthy life and choosing how you spend your time are infuencing
entrepreneurial behaviour. Quality of life is being valued more in society. A life-
style entrepreneur is primarily interested in obtaining enjoyment from business
pursuits. This means that fnancial goals are not the main reason for entrepre-
neurship but are still an important motivator. Lifestyle entrepreneurs seek control
over their life priorities through their daily activities. This means that they seek
 Food artisan entrepreneurship in Indonesia 37
independence and improvement in their quality of life. A lifestyle entrepreneurs’
business is an integral part of their life. The passion displayed by a lifestyle entre-
preneur infuences the aspirations they have for their business.
Lifestyle entrepreneurship is a way of living and working that is becoming
increasingly popular in society. There is a cultural and social change occurring in
society due to the increased emphasis placed on issues such as work/life balance,
sustainability and climate change. Entrepreneurs are now expected to engage in
socially responsible practices.
Artisan entrepreneurs are innovative and shape markets. Artisans may reject
the notion of entrepreneurship when it is defned as a commercialisation activity
but accept it when it is referred to more broadly as innovation. Artisans adopt an
entrepreneurial orientation when they have to survive and adapt in the market-
place. An entrepreneurial orientation refers to a mindset that emphasises innova-
tion in decision-making activity. The individual artisan is the key player in making
entrepreneurial decisions. Innovativeness refers to the tendency to support new
ideas that incorporate some degree of creativity. This means emphasising nov-
elty and change. In order to be innovative, some experimentation is required.
Proactiveness refers to actively being engaged in thinking about the future. This
involves having a forward-looking perspective that anticipates change. Individu-
als who are proactive are able to recognise trends before they occur. This can help
them gain a competitive advantage in the marketplace. Risk taking involves taking
action that has an uncertain outcome. This involves a willingness to take action
without a known result.
Many artisans are passionate about their craft and this is refected in the qual-
ity of the products they produce. Passion is a key behavioural characteristic of
entrepreneurs as it enables them to overcome obstacles. Hubner, Baum and
Frese (2020: 1112) defne entrepreneurial passion as “the consciously acces-
sible, intense positive feeling experience by engagement with roles that are
meaningful and salient to self-identity”. Entrepreneurs are involved in various
activities such as innovation and developing a business. Being passionate ena-
bles an entrepreneur to persist in adverse environments where the outcome
is unknown. Due to the difculty in progressing an idea in the marketplace,
entrepreneurs who are passionate can persist when others may fail. This means,
in stressful circumstances, passion is required in order to manage challenging
circumstances.
Artisans have a distinct entrepreneurial orientation that diferentiates them
from other types of entrepreneurs. This is due to the creativity inherent in mak-
ing an artisan product that is the result of innovative thinking. Entrepreneurial
orientation is a strategic stance artisans take in the marketplace that emphasise
innovation. This enables them to generate value and capture more interest in
their products. Artisans are driven by their passion for their craft and satisfaction
from being involved in the process of craft making. There is not only a sense of
prestige from being an artisan that is associated with the way they make products
but also a social appeal to artisans particularly those who live in an attractive
rural location.
38 Vanessa Ratten
Social media and artisan entrepreneurship
Social media is an efective mechanism that can contribute to an artisan’s market-
ing and strategy objectives. It enables them to involve customers more in the
craft making process, thereby acting as an important source of communication.
Kapoor et al. (2018: 536) defne social media as “various user-driven platforms
that facilitate difusion of compelling content, dialogue, creation and commu-
nication to a broader audience”. This means that it provides a source through
which information can be exchanged through social interaction. It enhances two-
way communication between artisans and customers, thereby enabling artisans
to broadcast information to a large audience and facilitating more interactivity.
Social media is an electronic service that provides a platform for sharing informa-
tion. It includes social networking websites, internet forums and blogs.
Artisans have a sense of identity from engaging in their craft. Self-identity is
derived from how an individual interacts with others. Identity is a continually
evolving and changing based on the environmental context. Artisans are increas-
ingly using digital media, which enables them to document and share informa-
tion about their craft. Digital media enables diverse modes of communication to
be developed that ensures more real-time information is made available. This ena-
bles artisans to develop their brand name and enhance interaction with customers
and their community. Artisans can develop their craft knowledge by publishing
updates on digital media. This enables them to obtain feedback from others in
order to improve their craft. There are also unexpected benefts for artisans from
engaging in digital media platforms. This includes new designs and production
methods to emerge based on interaction with others. The creation of digital
media context such as audio, graphics and video are valuable skills for artisans.
Social media such as Facebook, Instagram and LinkedIn are important for arti-
sans especially for those in remote locations.
Artisans can share ideas and obtain real time feedback on social media. This
is an important way for global communities of practice regarding artisanship to
emerge. Social media enables communication through online sources regarding a
certain topic. Moreover, social media is driven by user-generated content that is
constantly being updated. This has meant there is a large amount of information
available on social media. Social media integrates multiple sources of media and
enables diferent points of view to emerge. It is based on internet technologies
that enable the creation and modifcation of content. This enables user-generated
content to be exchanged as a source of information. The focus of social media is
on collaboration and establishing information linkages. Social media is initiated
and circulated based on the interests of users. This means that the content pro-
vides a source of information on brands, products and topical issues.
Social media is changing how artisans do business. It enables artisans to enhance
brand loyalty in their interaction with audiences. Interest in artisan entrepreneur-
ship as a distinct category of entrepreneurs has increased in recent times. Their
distinctiveness is marked by the integration of cultural, historical and artistic
activity. Artisan enterprises are a form of hybrid organisation as they combine
 Food artisan entrepreneurship in Indonesia 39
economic, social and cultural logics. Hybrid organisations integrate social and
market goals. This means that they often pursue competing goals.

Entrepreneur’s identity
An entrepreneurial identity is an individual’s perception of their belief in being an
entrepreneur. This means that, someone who thinks, they have an entrepreneur-
ial attitude can be considered as being an entrepreneur. An individual’s identity
serves as a way of evaluating their position in society. This means that it can be
used to distinguish individuals from others based on their behavioural charac-
teristics. More individuals are considering themselves as entrepreneurs because
of the positive meaning associated with being an entrepreneur. An entrepreneur
is viewed in society as being a social change agent and important contributor to
economic development. This means that they pursue opportunities based on per-
ceived market gaps. Being an entrepreneur can be an arduous task as it involves
focusing simultaneously on innovative, risk taking and futuristic activity. Entre-
preneurs take control of critical resources by pursuing market gaps. This involves
strategic planning and anticipating demand. Lifestyle entrepreneurs construct
their identity based on what values matter most to them.
An entrepreneur’s identity can be examined through role and social identity
theory (Żur, 2020). Role identity theory refers to the position a person has in
society. This is associated with the way an individual acts and behave. It incor-
porates the expectations and meanings associated with a role. This means that
context is an important determinator of how a role is perceived. Social identity
theory relates to an individual being a member of a social group. Therefore, an
individual will act in a certain way based on their position in a social group.
Artisans sometimes have scant entrepreneurial capabilities due to their inter-
est in their craft instead of business pursuits. Suvanto, Niemi and Lähdesmäki
(2020) divide entrepreneurial identity into entrepreneurial orientation and per-
sonal orientation. The entrepreneurial orientation involves behavioural traits
such as innovativeness and competitiveness. This means that an individual can
be characterised as being entrepreneurial when they are willing to take risks and
pursue market opportunities. In addition, an entrepreneur is more persistent and
optimistic than other individuals. This means that they tend to be more self-
reliant and focused on intended outcomes. Personal orientation refers to an indi-
vidual’s belief in certain behaviour such as a willingness to change the status quo.
Each individual in society is diferent so it is important to consider their personal
characteristics. This includes understanding their personal work preferences and
attitudes towards business.
An entrepreneurial identity refers to the meanings an individual associates with
their entrepreneurial activity in the marketplace. Individuals have a psychologi-
cal and economic need to associate with a certain identity. This includes having
a social identity in society that enables them to have a sense of belonging. This
enables them to be included as a member of a group. The feeling of belong-
ing is required in society. It reduces anxiety and loneliness. Individuals generate
40 Vanessa Ratten
positive emotions from their identity. This enhances their psychological health
and position in society. In order to become an entrepreneur, artisans need to have
an intention to start a new business. This involves thinking at some point in time
to establish an artisan-based business. An entrepreneurial mindset involves con-
sciously wanting to engage in innovative business activity. This refects an urge
to do something that involves entrepreneurship. It directs an individual’s energy
towards entrepreneurial behaviour.
Intentions are amongst the best way to measure actual behaviour. This means
that sometimes intention is used as a proxy for actual behaviour. Pinpointing
an artisan as an entrepreneur carries behavioural responsibilities. This includes
actively looking at new opportunities and proactively engaging in business pur-
suits. Artisans acquire an entrepreneurial identity based on the environmental
context. Artisans might become entrepreneurs due to the infuence of their social
circle (e.g. family, friends, peers). This social pressure infuences them to become
entrepreneurs. There is pressure to conform to the expectations of an individual’s
social circle. This means that an artisan can embrace more entrepreneurial activi-
ties in order to ft into their social group.
Artisan entrepreneurs often learn by doing. This means that experiential learn-
ing occurs as an entrepreneur learns through experience. Artisans continually
learn and are a repository of information. This means that there are signifcant
collaborative peer learning behaviours that occur amongst artisans. Collaborative
learning enables not only individuals to increase their competence and knowl-
edge about their craft but also artisans to share experiences and reminisce about
past outcomes. This acts as a form of emotional support and facilitates a sense of
community.
Artisan entrepreneurs learn through their direct and indirect experiences that
contribute to their accumulated body of knowledge. This experience is derived
from observation and participation in events. The practical wisdom resulting
from this experience infuences their future behaviour. Learning in an entrepre-
neurial context refers to how to recognise and act on opportunities. This includes
understanding how to start then manage a new business. Experience enables an
entrepreneur to acquire knowledge about markets, resources and locations. This
knowledge is helpful in starting a business as it enables valuable information about
contacts, suppliers and products to be used. Entrepreneurs with prior experience
have an entrepreneurial mindset that helps them evaluate opportunities. This
reduces learning costs associated with assessing entrepreneurial opportunities.
Entrepreneurial experience is infuenced by an individual’s work history and
personal characteristics. Huovinen and Tihula (2008: 154) state that entrepre-
neurial experience “consists of profciency developed over the course of time
(stock of experience) and knowledge accumulated through certain discrete
events (stream of experience)”. Entrepreneurial experience can include accumu-
lated managerial knowledge that makes it easier to start a new business. This
enables technical and practical know-how to be applied to new business ideas.
Past experiences also enable existing networks and information to be used for
new purposes. Entrepreneurs with past successes need to be careful to not have
 Food artisan entrepreneurship in Indonesia 41
excess self-confdence that can lead to complacency. This means sometimes an
entrepreneur may underestimate the competition and over-estimate their own
capabilities.

Artisan food
There is no common defnition of artisan food. The most popular way to under-
stand artisan food is in the use of local ingredients to make handmade products.
Artisan food can also be defned based on consumer perception even though in
reality it may not traditionally be artisanal in nature. Artisan entrepreneurs are
common in the food and beverage industry. Food artisans produce food using
handmade methods typically in small batches. This means that time is spent focus-
ing on attention to detail. Artisans normally do not use any form of machinery in
the production process. Consumers are increasingly becoming interested in how
food is made. This means that increased attention is placed on the ingredients
and place in which the food was produced. Artisan food is made in a traditional
manner often passed down through families. There is a sense of heritage in arti-
san food as it includes cultural elements. Artisan food is made based on tradi-
tional recipes that use few modern ingredients. This means that the food is made
locally and not from imported ingredients. Provenance is an important element
of artisan food as it means the place of production is known. This ensures that
the ingredients and the way food is made can be traced. Food artisans are skilled
craftspeople as they know how to make certain foods.
Artisans normally make a product due to personal reasons rather than fnan-
cial necessity. This means that they have a sense of passion for the process of
making a product and the resulting sense of enjoyment received from the fnal
product. As a result, artisan products are perceived to have a higher quality than
mass-produced products. Artisan products are made with local ingredients that
are sourced based on available resources. This means that there are lower trans-
portation costs from the making and selling of the goods. In addition, the food
is generally fresher so it afects the taste. An artisan food product is normally
characterised by its local ingredients and handmade nature. However, it can also
be called an artisan food if it is cooked or served in a certain way. This means that
there is some degree of complexity regarding how to defne an artisan product.
The food made by an artisan is the result of much experimentation and refne-
ment. The process is made through traditional techniques that are known for the
resulting high-quality end product.
More consumers are considering local food as a more healthier and sustainable
alternative to mass-produced food. Consumers are becoming more concerned
about ethical issues associated with food including where and how it was made.
There are more community-minded consumers that are interested in regional
economic development. This means that consumers are aware of the associated
benefts of local food including employment and cultural heritage reasons. There
are local and regional identities associated with food. Local food is defned based
on its geographic location in terms of where it is made and produced. Thus,
42 Vanessa Ratten
the distance between producer and consumer is a way to denote a local food
producer. Consumers believe that locally produced food should be organically
grown and additive free. This means that consumers are taking into account the
natural and social environment of food production.
The artisan food sector has enjoyed signifcant growth due to the increased
exposure on television and other media on local and handmade food. Television
shows that depict the show’s host travelling to meet food producers are more
popular. Consumers are wanting to connect more with food in terms of how it is
produced and made. In addition, community-supported farms and farmers mar-
kets have grown. Other food initiatives such as fair trade and the slow food move-
ment have led to the increase in artisan food practices. Consumers are wanting
to meet food growers to know more about their food. This sense of connection
between consumer and producer can occur in person or through virtual spaces.
Farmers markets enable consumers to have contact with growers and producers.
They have grown at a remarkable rate and are changing the way food is bought
and consumed. The direct interaction between farmer and consumer provides
not only a sense of connection but also linkage to culture.
Artisan food acknowledges that there is a diference between handmade and
mass-produced food. Traditional foods are often related to local culture and folk-
lore. This means that there is specifc know-how and ingredients that go into
making artisan food. There is more demand for knowledge about how to make
artisan food. This has led to more younger people entering the market and want-
ing to learn artisan techniques.
Food provides a way to communicate elements of a culture. This means
that a region’s identity is often characterised by the food consumed in a
region. Consumers are wanting to support their local area by consuming
locally grown and made food. In addition, they are more interested in sus-
tainability, so the consumption of local food enables them to reduce envi-
ronmental costs.

Artisan wine
Artisan wine comes from a small producer who usually has their own vineyards
and production facilities. The wine is made using traditional winemaking pro-
cesses in limited quantities. Each year the wine is diferent depending on the
weather and soil conditions. The quality of the wine is linked to the area in which
it is grown. Artisan wine makers are expected to produce wine with a consistent
high quality. This means that great care is taken in bringing out the wine’s charac-
teristics in taste and texture. Artisan wine makers do not make wine for the mass-
market so it can be difcult to persuade people to buy their wine. In addition,
artisan wine makers have a desire to make wine in a way that links in with their
social values. This means that the wine is related to their personality and personal
view of life. Each artisan choses their own path in winemaking but most share a
general commitment to upholding certain values.
 Food artisan entrepreneurship in Indonesia 43
Conclusion
This chapter has discussed the role of artisan entrepreneurship in the Indonesian
food industry, thereby ofering a new perspective about the way cultural heritage
and innovation combine to produce new types of food. The role of art and crea-
tivity in artisan behaviour was explained in a way to understand how it impacts
Indonesian culture. This enables new perspectives on artisan entrepreneurship
to emerge that integrate cultural and heritage points of view. This is useful in
understanding how history and context are utilised in artisan food entrepreneur-
ship in Indonesia.

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4 Knowledge management
and artisan entrepreneurship
in Indonesia Vanessa RattenKnowledge management

Vanessa Ratten

Introduction
The term ‘artisan’ is a debated topic as it is used in a variety of diferent contexts.
This means that it is easy to understand what artisans do not do rather than
what they do. Artisans are a form of craftmaker but are more specialised. This
means that it can be hard to grasp the essence of artisanship in a defnition. In
this chapter, the word ‘artisan’ refers to a diverse array of craft practices that have
been in existence for a long time. The word can be used to collectively describe
craftspeople who embed a creative and cultural element to their work practices.
Knowledge is needed in order to be an artisan. Some knowledge can be easily
acquired through books or interaction with others but other knowledge sources
are more difcult to acquire. The term ‘knowledge’ refers to experiences, facts or
feelings known by a person. To be classifed as knowledge, an individual needs to
be conscious about its value. This involves being familiar with information based
on previous learning experiences. Knowledge can be used in multiple contexts
and increases when it is used and shared. Artisans can beneft from the practice
of knowledge management. Artisans need to be innovative in order to maintain
their competitiveness. A  prerequisite for innovation is the efective transfer of
knowledge. Artisans can demonstrate their skills to others, but it takes actual
hands-on experience to be an artisan. Therefore, novices need to acquire many
diferent skill sets in order to become an entrepreneur. By interacting with other
artisans, an individual can gain feedback and help. This enables them to learn
more quickly. The attention of a skilled artisan can provide help and advice to
novices. The materials required to make a product can have specifc characteris-
tics. For example, the fresh ingredients may need to be of a specifc type or qual-
ity. This means that artisans develop a sense of rightness about what ingredients
to use. This knowledge can take time to develop as it requires information about
how a particular material can be used. This means knowing about what material
to use comes from actual experience.
The structure of this chapter is as follows. Next, the importance of artisan
knowledge in the creative and cultural economy is discussed. This leads to a
discussion about the role of craft knowledge and the knowledge transfer process.

DOI: 10.4324/9781003187769-4
46 Vanessa Ratten
This follows with an examination of the impact of user communities and social
media on artisan entrepreneurship.

Artisan knowledge
Artisans possess a practical knowledge of their craft that is the result of many years
of practice. Very skilled artisans accumulate knowledge about good practices.
This includes sensitive and location-specifc knowledge that takes time teach to
others. Some of this knowledge can also be superstitious that makes it hard to
translate. Artisans also have their own knowledge based on accurate and inaccu-
rate opinions (Ratten & Ferreira, 2017). Therefore, artisan knowledge needs to
be codifed in written documents to enable others to learn the craft. This is not
easy to do as some artisans do not want to share their knowledge. This means
that the knowledge they have is not known to others. Artisans require specifc
knowledge beyond that of other craftmakers.
The storing and sharing of knowledge is more easier due to the increased usage
of technological tools (Apostolopoulos, Ratten, Petropoulos, Liargovas, & Ana-
stasopoulou, 2021). Knowledge management is defned as “a management tool
characterised by a set of principles along with a series of practices and techniques
through which the principles are introduced, the aim of which is to create, con-
vert, disseminate and utilise knowledge” (Palacios, Gil, & Garrigos, 2009: 292).
Knowledge management involves creating, valuing and then utilising knowledge.
It also implies that knowledge can be stored and distributed based on need.
Therefore, it is the manipulation and control of how knowledge is shared. This
means that individuals can manage knowledge in a way that creates new capa-
bilities and increased performance (Ferreira, Fayolle, Ratten, & Raposo, 2018).
Organisations need to continually acquire and utilise knowledge in order to stay
competitive. For knowledge to be managed, it needs to be captured which can
be a complex process. This is due to knowledge acquisition being difcult and
involving a degree of subjectivity (Jones, Klapper, Ratten, & Fayolle, 2018).
Knowledge acquisition involves obtaining insights and skills. This process of
knowledge generation can be derived from relationships or be a result of the col-
lection of information. This means that knowledge acquisition is obtained from
network relationships that encourage the dissemination of knowledge. To help facil-
itate the accumulation of knowledge, it helps to have knowledge champions. These
knowledge champions can break down knowledge acquired into meaningful pieces
of information (Ratten, 2020). This enables more information about the knowl-
edge to be obtained in order to understand if it already exists or is unknown. Once
knowledge is obtained it can then be shared with others. This process of knowledge
sharing involves capturing the knowledge from multiple sources then ensuring it is
shared to those who need it. Obtaining knowledge in a timely manner is important.
This ensures individuals have the right kind of knowledge when it is needed.
In order to transmit this knowledge, it can be useful to have supervised
mentorships or apprenticeships. This enables knowledge to be observed and
 Knowledge management 47
demonstrated to others. Artisans have general knowledge about how to make
products that is similar to other artisans’ knowledge. They also have eclectic
knowledge that is more individualised and based on personal experience. Some
artisans learn their skills through professional training or educational institu-
tions. This enables basic knowledge to be taught based on common repositories
of information (Ratten, 2021a). This is an efcient way to learn about a craft
and has many advantages. Practical knowledge can be taught in schools to a
group of people (Ratten & Dana, 2017). This enables information about best
practices to be shared. Teachers communicate knowledge in a way that can be
easily understood.
Crafts knowledge includes cultivating the use of information and a com-
mitment to the value of experience. Artisans have certain skills and abili-
ties that they have nurtured over a period of time. This means that artisans
trust their intuition and feeling about what is appropriate given the context.
Artisan skill is transmitted through practical examples and modelling. The
apprenticeship model is viable amongst those wanting to learn how to be an
artisan due to the need to gain tacit knowledge. Knowledge can take a variety
of different forms but the main way to understand knowledge is whether it
takes a tacit or explicit form (Ratten, 2021b). Tacit knowledge is unwritten
information that takes time to accumulate. It is hard to explain and does not
exist in a written format. Explicit knowledge does take a written format and
is thus easier to transfer to others. Some knowledge about artisan practices
can be acquired by reading books but most is acquired through informal
learning processes. This includes learning by doing in a way that transfers
specific practical skills. Communicating the subtleties of a craft technique
can be difficult to explain even when an artisan is shown how to do a certain
technique. This means that it takes time for another person to know how to
do this same technique.
Learning artisan techniques even when in direct contact with another artisan
can be difcult. There is more online content including pictures and examples
showing how to make a craft. This can be a useful source of information for
those wanting to obtain new skills. In addition, there are videos available on
how to engage in craft making activity. This includes freely available video con-
tent on websites including YouTube that are constantly being updated. Despite
the various online resources available on craft practices, there is still a need to
learn through direct experience. Online resources can supplement the direct
experience by providing creative inspiration. This enables communities of arti-
sans to share their practices online that facilitates discussion. In addition, online
resources can help provide clarifcation about techniques particularly when it is
hard to learn through direct experience. This facilitates a person viewing a video
multiple times in order to learn at their own pace. As not everyone learns at
the same pace, it can be helpful to have fexibility in replaying a video in order
to learn new techniques. An example of artisan knowledge in Indonesia is the
wayang kulit puppets.
48 Vanessa Ratten
Wayang kulit
Wayang kulit are leather puppets popular in Indonesia. They use the shadows
thrown by puppets to tell a story. The puppets are made from elaborately detailed
leather. The dalang is the puppeteer who moves the puppets around the screen.
Wayang kulits have a mythical connotation in Indonesia as they symbolise good
and evil. The puppets are projected onto a linen screen that has light shown on
it. The stories combine educational lessons and a source of entertainment. They
are an oral and intangible part of Indonesia’s culture. In a play, there are several
puppets used to represent diferent characters. During the performance, a drum
is used as well as cymbol percussion instruments. Normally a wayang kulit perfor-
mance begins after dark and can take a long time period. This means that some
performances can go for eight to nine hours all through the night.
The play normally tells the story of the Hindu epics Ramayana and Mahab-
harate. The dalang uses hand movements and narration to tell the stories. The
Mahabharate is an Indian epic story that tells of a family feud between the Kaura-
vas and their cousins the Pandavas. This story has since been adapted to new con-
texts. In each story, the good characters are on the right and the evil characters
on the left. There are deep philosophical messages portrayed in the performances.
This is complemented by the gamelan orchestra and vocals used. The puppets are
art works in themselves as they take a long time to make. The gamelan orchestra
can consist of between 20 and 40 musicians that play a variety of instruments. In
the gamelan orchestra gongs, metallophones, xylophones and strings are used.
The wayang kulit was frst mentioned in the 12th-century Javanese poems but is
thought to be in existence before that time period. The performance is orches-
trated by the puppeteer and their assistants that hand them the puppets. The
stories tell the search for self-knowledge, life, love and death. Each story can
combine unsolveable challenges in the form of unknown outcomes.

Craft knowledge
The knowledge needed to practice crafts can be easy or hard to obtain depending
on the type of craft. Crafts that require simple repetitive action are easier to learn.
However, within each craft, there can be certain skills required in order to make
the craft in a fast manner. In addition, some crafts may need more skills in order
to produce a high-quality product. For craft novices, actually making a product
can be more difcult than they assume. This is due to an artisan’s skills being
embedded in their experience. Thus, the knowledge of how to make a product
can be difcult to express as it is embedded in physical movements.
Craft knowledge in artisans is more than just experience as it includes physical
activity. This means that it includes the manipulation and use of physical mate-
rial to make a product. Thus, there is no substitute for actual hands-on experi-
ence. Online forums enable craftmakers to post pictures and make comments.
As a result, a sense of community develops that enables individuals to access
information regardless of geographic position. The ease of posting and accessing
 Knowledge management 49
information online has changed the way crafts are practices. It also enables ques-
tions to be asked and answered by other artisans.
Artisans mostly exist as small enterprises that do not have the resources to
generate new knowledge. This means that inter-organisational knowledge trans-
fer is required. In order to understand how knowledge is transferred amongst
artisans, social capital theory can be used. Social capital is defned as “the sum
of the actual and potential resources embedded within, available through, and
derived from, the network of relationships possessed by an individual or social
unit” (Nahapiet & Ghoshal, 1998: 243). Knowledge is contextual so it needs to
be understood based on social interactions. Despite the importance of knowledge
management to the competitiveness of the cultural industries, artisans have been
slow to adopt knowledge management practices. The efective management of
knowledge requires four main processes: creation, storage, transfer and applica-
tion (Alavi & Leidner, 2001). The creation of knowledge involves thinking about
new artisan products or marketing methods. The storage refers to keeping the
information in a way that can be easily accessible. Transfer involves exchanging
with others useful information. Application means acting on the knowledge in a
useful way.

The process of knowledge transfer

There is a well-established body of literature on knowledge transfer due to
its signifcant role in the innovation process. Knowledge transfer in an inter-
organisational context refers to the “process through which one organisation
learns from the experience and knowledge of another for gaining or sustaining a
competitive advantage” (Martinkenaite, 2011: 54). Knowledge transfer between
artisans eases the way new ideas are introduced into the market. Artisan engage-
ment refers to high relational involvement in situations where multiple artisans
work together on joint projects. Knowledge transfer involves exchanging knowl-
edge that is useful from one context to another. The capability of artisans to
absorb new knowledge depends on their knowledge base. This means that the
capacity to recognise and apply new knowledge can vary amongst artisans. The
interpretation of knowledge can be made difcult when artisans have diferent
opinions and beliefs about its usefulness.
Knowledge helps artisans maintain a strategic competitive advantage in the
marketplace. Therefore, knowledge can be developed through a range of pro-
cesses including experience and improvisation. In order to strengthen the arti-
san, industry knowledge needs to be shared. Knowledge transfer is a process of
information exchange. This is a complex task as it requires the accurate interpre-
tation of information. De Luca and Rubio (2019) suggest that people learn on
two levels: a lower level and higher level. The lower level refers to repetition of
past behaviours that are improved over time. This involves focusing on routine
activities that are conducted in the short term. Higher level learning involves the
development of new insights that change existing assumptions. This enables new
knowledge to be created.
50 Vanessa Ratten
The possession of knowledge can help guide an artisan towards success. It pro-
vides an artisan with useful information that enhances their entrepreneurial capa-
bility. Knowledge transfer involves a reciprocal relationship between the giver and
receiver. Latilla, Frattini, Petruzzelli and Berner (2019: 1336) suggest that craft
organisations are involved in “the production of high symbolic value artifacts,
resulted of largely manual (handmade) processes obtained through the work of
high-skilled craftsmen”. Thus, artisan knowledge mainly exists in the minds of the
artisans as a result of their working experience. This means that it is not expressed
in an explicit way but rather is manifested in a tacit way. Therefore, this form of
knowledge requires actual demonstrations. Artisans have a form of cultural intel-
ligence. They confer a sense of exclusivity to products they make. This unique
position means they have an aura that is difcult to copy. Artisan knowledge is
the result of abilities and talent used to make products. An artisan who efectively
manages their knowledge can build a good reputation.
Knowledge transfer involves articulating information to others in a way that is
mutually understood. To do this, it involves the modifcation of existing knowl-
edge to a new context. Knowledge is transferred when one person purposefully
receives and uses the knowledge from other individuals. In the context of artisans,
it can be useful to focus on how other artisans transfer knowledge through tools
and tasks. Tools refer to equipment and technology needed to make artisan prod-
ucts. Tasks involve the actual actions required by an artisan to make a product.
Learning occurs when knowledge is used to solve problems. Knowledge is an
elusive concept that can be best described as useful information that is accumu-
lated over time. This means what an artisan knows and how they use this knowl-
edge is important. In order for knowledge to be useful, it needs to be harnessed
and leveraged in the right way. This involves transferring information in a way
that makes sense to others. One way to transfer information is by selecting key
themes that can be shared with others. For knowledge to be transferred individu-
als need to be willing to share information. This means collaborating with others
through cooperative relationships.
Knowledge and expertise are part of the success of artisan entrepreneurs. The
most successful practices are taught to up-and-coming artisans to ensure the
craft remains in existence. There are many diferent forms of knowledge exist-
ing amongst artisans. This includes knowledge of things that can be used in the
production process. This might include information about certain objects that
can help an artisan make a product. There is also knowledge of how to do things
that is learned over time. This may include the steps required and the associated
resources required to make this happen. The making of an artisan product can
be done in diferent ways so consideration of the individual skills and context is
required. In order for others to learn this practice, it can be helpful for an artisan
to show how they are making a product and the necessary steps required. This
might include the know-how in terms of the capability to undertake a task or
the know-why in terms of the reasons for the actions. Managing knowledge is a
prerequisite for higher levels of productivity.
 Knowledge management 51
Utilisation of social networks
Social networks are important for entrepreneurial success as they enable individu-
als to accumulate knowledge. The ability to develop and maintain a personal net-
work is a key skill needed by artisan entrepreneurs. Social networks give access to
resources that entrepreneurs need to build their business. Individuals as members
of a social network are dependent on the exchange of resources. Entrepreneurs
try to reduce uncertainty by being members of a social network. Therefore, arti-
san entrepreneurship is dependent on access to diferent kinds of resources.
Social networks are part of asset parsimony as they enable quick access to nec-
essary resources. Asset parsimony is defned as “the efort needed to acquire the
minimum assets at the lowest possible cost, in order to pursue the company’s
goals” (Jenssen, 2001: 104). This gives entrepreneurs some degree of fexibility
in how they manage their business practices. A social network provides a way for
an entrepreneur to take advantage of resources when the need arises. This fexibil-
ity is helpful when the pace of business growth is unknown, and there is a degree
of fuctuation in market demand. Access to resources can save an entrepreneur
time and money. Entrepreneurs without a social network may have a difcult time
in creating networks. This means that entrepreneurs constantly use their existing
networks as a source of information. They also develop their initial network into
a larger network over time. The individuals in the initial network can introduce
other people to the network or give advice about who else to contact. The more
contacts an entrepreneur has increases the probability that a specifc resource or
type of information can be accessed. However, the quality of network contacts
can be more important than the quantity of social contacts. In a social network,
the bonds between members can be described as strong or weak. Strong ties
imply a close bond between network members. This enables higher levels of trust
to exist between members because of the high level of interaction. Weak ties refer
to network members with infrequent contact.
Artisan entrepreneurs often engage in social entrepreneurship due to the
hybrid nature of their businesses combing both proft and non-proft objectives.
Social entrepreneurship occurs when an entrepreneur has a dual mission of both
fnancial outcomes and social impact. Social entrepreneurship plays an important
role in the adoption of business strategies that contribute to economic develop-
ment and social change. Increasingly social entrepreneurship is being adopted by
artisan entrepreneurs due to initiatives by stakeholders in pursuing joint cultural
and social goals.
There is a consensus in the literature that the defning characteristics of a social
entrepreneur is the ability to combine social value with business strategy. Social
enterprises utilise a wide range of business models to achieve their social objec-
tives. Due to the hybrid nature of social enterprises, they can ensure the coopera-
tion of diferent stakeholders including local communities, government, artisans
and private sector organisations. This enables social forms of innovation to occur
through stakeholder relationships.
52 Vanessa Ratten
Social innovation involves adopting creative practices with the purpose of solv-
ing social problems. Social innovations can refer to new products, organisational
forms and processes. This means that there are many ways innovations can be
considered as having a social component. Social innovators mobilise resources
in order to transform society. They do this by engaging with benefciaries of the
change in order to increase access to resources. The key aim of social innovation
is to empower people by supporting relational and structural change.
Artisan social entrepreneurship is a process that uses artisanry to create innova-
tive solutions to social problems. This can be done by harnessing the capacities
and ideas from an artisan context. Social entrepreneurship marks an ethical shift
in the way entrepreneurship is conducted. This means incorporating social ben-
efts as the central mission of an artisan business, thereby extending the benefts
of artisan entrepreneurship to a social context. This means thinking diferently
about the value created from an artisan by investing in social goals.

Social media and intellectual capital

Social media is recognised by artisans as a way of facilitating communication
with others about their products. It enhances public relations and expands their
customer base. Digital technologies have enabled artisans to reduce their com-
munication costs and enabled the transmission of new types of information. Digi-
tal technologies such as social media have led to new approaches for knowledge
creation and coordination to be adopted. This has enhanced the way knowledge
is stored and shared. Digital applications such as annotation in online discussions
can provide useful feedback and comments.
Artisan entrepreneurs have a high level of intellectual capital that diferenti-
ates them from other entrepreneurs. Marr and Moustaghfr (2005: 1116) defne
intellectual capital as “any valuable intangible resource gained through experience
and learning that can be used in the production of further wealth”. Artisan entre-
preneurs have intellectual capital in the form of attitudes, knowledge and skills.
Intellectual capital includes the invisible assets of an entrepreneur such as mana-
gerial skills and technological knowledge. These skills are important resources for
the long-term success. Klein and Prusak (1994) suggest that intellectual capital
includes any form of intellectual material that can be leveraged to create a higher-
value asset. This means that it is the result of information-based assets including
competencies and skills. Moreover, intangible property rights such as brand name
and reputation contribute to an individual’s intellectual capital. This enables them
to utilise customer relationships in a strategic way. Intellectual capital is difcult
to imitate because of its individual-specifc nature.
Artisans need to utilise their intellectual capital through a process of dynamic
capabilities in order to compete in the global marketplace. Teece, Pisano and
Shuen (1997: 516) defned dynamic capabilities as “a frm’s ability to integrate,
build and reconfgure internal and external competences to address rapidly
changing environments”. This means purposefully extending their resource base
in order to capitalise on new opportunities. The way artisans create or modify
 Knowledge management 53
their existing products is a result of market demands. Eisenhardt and Martin
(2000) suggest that markets are constantly changing in terms of colliding, split-
ting, evolving and dying. This means that artisan frms need to consider how they
can reconfgure their products to ft emerging market needs.
Teece (2007) suggested that frms can utilise their dynamic capabilities by sens-
ing, seizing and transforming their strategy. Sensing involves predicting threats
and opportunities before they occur in the market. This involves understanding
the changes in the environment. Seizing involves acting on opportunities as they
emerge in the marketplace. This is important in leveraging capabilities and enter-
ing new markets. Transforming involves changing the frm’s strategy to suit new
market needs.
Artisans utilise their knowledge and experience to create products so
domain-specifc knowledge is highly relevant to their production techniques.
Nordqvist and Frishammar (2019: 79) defne domain-specifc knowledge as
“knowledge about something that is gained by means of experiments, study
and experience within the specifc technical domain in which the work is per-
formed”. It enables an artisan to produce products at a specifc quality and
output level. Procedural knowledge refers to steps needed to perform a task.
This is a distinct type of knowledge as it infuences how artisans undertake
work and engage in collaboration. Artisans gain procedural knowledge from
previous experience in designing products. It resides in the minds of artisans as
it involves knowledge about how to market a product. In order for individuals
to learn artisan skills, they must take a conscious step to tap into the knowl-
edge of existing artisans.
A big part of the development process in innovation derives from the input and
feedback of users. The role of users in innovation tends to be underestimated but
increasingly they are being utilised as a way to advance the innovation develop-
ment process. Community of users are using online and social media platforms
to discuss innovation. This provides a good mechanism to disseminate ideas and
obtain advice about new developments. Users are motivated to be innovative in
order to gain advantages in terms of usage consumption patterns. In addition,
there are non-proft motives such as willingness to be a member of a community
that further infuences the innovation process. The cost of innovation depends on
the type of resources required. Users can create low cost and quick innovations
based on their knowledge.
The performance of a locality is impacted by the complexity of actors that
interact for business purposes. This means that each locality needs to be con-
sidered as a unique place that has its own sense of identity. The success of an
artisan business is more dependent on the exercise of specialist knowledge than
on market forces. Artisan knowledge is dependent on manual skills and cogni-
tive abilities. Artisans have certain know-how that is embodied with their craft.
This means that artisan products depend on intimate knowledge of a craft. An
artisan’s tacit understandings of a craft are more important than their general
knowledge. Artisans simultaneously construct products based on their interac-
tion with them.
54 Vanessa Ratten
Artisan knowledge in a community context
Artisan entrepreneurs are powerful contributors to local communities and act as
catalysts of change. Community-based entrepreneurs are established and gov-
erned to promote benefts to a community. They are similar to social enterprises
due to the non-proft nature of many of their business activities. They have a
collectivist structure that focuses on a group of people, rather than just indi-
vidual needs. The success of a community enterprise is the result of how specifc
cultural values have been embedded in business practices. Naturally, academics,
practitioners and policymakers are paying increased attention to artisan entre-
preneurs because of their role in cultural development. Artisan entrepreneurship
is a popular topic due to the growing fascination with culture, history and the
handicraft industry. The entrepreneurship literature tends to glorify individual
entrepreneurs who create value through technological innovation whilst dimin-
ishing the role cultural entrepreneurs plays in society.
The link between artisans and entrepreneurs represents a new frontier in entre-
preneurship research. This link builds on the existing literature in the anthropol-
ogy, sociology, tourism and community development felds. Social scientists have
for a long time researched the way culture is practised in society through creative
pursuits. In fact, the sense of culture is evident in most forms of artisan entre-
preneurship. Lumpkin, Bacq and Pidduck (2018) suggest that community level
activities can be understood through sociological, economic, anthropology and
political science. Entrepreneurship is touted as a way to incorporate cultural ele-
ments within business practices. There has been a tendency to focus on high-tech
products within entrepreneurship practices, but this has changed with more focus
being placed on preserving an area’s cultural heritage. As a result, there are now
more eforts to spur entrepreneurship based on cultural practices. Artisan entre-
preneurship has played a key role in the revitalisation of communities by aligning
business practices to cultural heritage. This is due to artisan entrepreneurship
involving the creation, development and management of artisan businesses.
A defning feature of artisan entrepreneurship is in the way cultural elements are
incorporated into products. This enables entrepreneurs to respect the past whilst
embracing the future. A related feature of artisan entrepreneurship is in the way
artisans reconcile cultural values with modern practices. This can be a challenge
due to alternating socio-cultural needs.
Artisan entrepreneurs belong to diverse realities due to their geographic posi-
tion and history. Therefore, artisan entrepreneurship can be considered in terms
of urban, rural and remote practices. Urban practices refer to the use of culture
within city-based artisans. There has been more emphasis on handicrafts amongst
community groups in cities. Rural practices involve farm-based artisan activity
that occurs in a country environment. This occurs when specifc use of land or
material is required for the artisan business. Remote practices refer to artisans
who operate in areas that are geographically difcult to enter. Due to the remote-
ness of the area, it may mean that the artisans are involved in unique practices that
only occur in that location.
 Knowledge management 55
Conclusion
Artisans have distinct forms of knowledge that diferentiate them from other
types of craftmakers. Due to the way culture is embedded within artisanship, it
is important that knowledge is transferred to others. To do this takes some time
as knowledge can be both tacit and explicit. This chapter examined the difer-
ent types and ways that knowledge can be exchanged based on artisan practices,
thereby highlighting the need for artisans to implement knowledge management
practices.

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5 Indonesian migrant
entrepreneurs Hamizah Abd HamidIndonesian migrant entrepreneurs

A comparison of two cohorts

in Malaysia
Hamizah Abd Hamid

Introduction
Research focusing on migration, in particular, within the scope of migrant
entrepreneurs has largely focused on Western-based countries, leaving a gap in
understanding intra-regional migration, especially towards non-Western migrant-
receiving countries (Aliaga-Isla & Rialp, 2013). Additionally, research within this
area has not fully captured the interest among academics in developing countries
(Mosbah, Debili, & Merazga, 2018), which can be explained by societal diversity
and lack of public information on migration in such nations (developing, non-
Western) (Abd Hamid, O’Kane, & Everett, 2019), attributing to the complex-
ity in feshing out the phenomenon. To this end, this chapter navigates these
uncharted waters by focusing on the historical contexts of intra-regional migra-
tion through the perspectives of ethnic migrant entrepreneurs.
In addition to the traditional migration from non-Western countries to West-
ern countries, the global migration landscape is observing migration from non-
Western countries within their regions. These changes in migration pattern imply
a change in the type of migrants these countries are attracting, which include
skilled and educated individuals, as opposed to the traditional low-skilled work-
ers. Such knowledge about the mechanisms and experiences of migration in such
countries, especially in Asia, is rather limited in the literature (Abel, Raymer, &
Guan, 2019; Hugo, 2005).
A shifting trend in global mobility calls for a deeper understanding of migra-
tion to such countries. In this regard, this chapter responds to this gap by explor-
ing the experiences of Indonesian migrant entrepreneurs (IMEs) in Malaysia.
This chapter focuses on the historical dimension in migration, informed by the
experiences of two migrant cohorts. Doing so enables us to elucidate the con-
textual factors surrounding entrepreneurship activities within the scope of migra-
tion. Migrant entrepreneurs as a context provide us with accounts of actors,
networks and institutions involved in the migrant-sending and migrant-receiving
countries (Barrett  & Vershinina, 2017; Kloosterman  & Rath, 2001). Further,
unlike expatriates, migrant entrepreneurs are considered as individuals more
closely linked with in-group networks, given the published challenges experi-
enced in the migrant-receiving country. In this aspect, this chapter provides a

DOI: 10.4324/9781003187769-5
58 Hamizah Abd Hamid
contextual account of Indonesian entrepreneurship through the perspective of
migrant entrepreneurs.
This chapter’s setting, Malaysia, represents a country with comparatively low
resources (when compared with traditional migrant-receiving countries) in deal-
ing with foreigners, while Indonesia is selected as a migrant-sending country to
be investigated given their propensities as one of the largest diaspora community
globally (World Bank, 2017). Although emigration from Indonesia to Malaysia
has been consistently high, a wave of migration from Indonesia is observed in
1997 to 1998 infuenced by political reform and fnancial crisis which encourages
the migration of skilled and economically prosperous individuals (Arifn, Ananta,
Wilujeng Wahyu Utami, Budi Handayani,  & Pramono, 2015). Such phenom-
enon exacerbates the embeddedness of entrepreneurs into their socio-cultural
context, as documented in Indonesian entrepreneurs (Anggadwita, Luturlean
Bachruddin, Ramadani, & Ratten, 2017).
The structure of the chapter is as per following. First, this chapter discusses the
theoretical framework, then followed by a clarifcation of the context chosen in
this chapter (Indonesian migration to Malaysia across two time frames). Next, the
methods and the fndings of this chapter are explained, followed by a discussion
of the fndings and concluded with a summary of the research and recommenda-
tions for future studies.

Literature review

The embeddedness framework

This chapter is outlined by the embeddedness framework (Jack  & Anderson,
2002; Kloosterman, 2010; Kloosterman & Rath, 2001; Uzzi, 1997) to under-
stand IMEs’ embeddedness within their home and host countries with regards
to migration and entrepreneurship activities. Embeddedness is referred to as the
complexity and extent of individuals to an environment (Jack & Anderson, 2002;
Uzzi, 1997), infuenced by history and linkages among members (Marsden,
1981). As entrepreneurship is a result of the dynamics of the entrepreneur and
the local context through the embeddedness process (Jack & Anderson, 2002;
Ozdemir, Moran, Zhong,  & Bliemel, 2016), this framework has been applied
in studies in exploring the way entrepreneurs perceive and exploit opportunities
within a specifc setting. This includes female entrepreneurs (Essers, Benschop, &
Doorewaard, 2010), entrepreneurs in depleted communities (McKeever, Jack, &
Anderson, 2015) and post-war Soviet entrepreneurs (Rodgers, Vershinina, Wil-
liams, & Theodorakopoulos, 2019).
These studies demonstrate the way entrepreneurship activities are contextually
bound; however, to our best knowledge, a time-based comparison on entrepre-
neurship activities particularly in ethnic migrant entrepreneurship has yet to be
done. Adding historical accounts could enrich our knowledge on the selected
entrepreneurial phenomenon, especially in contextually sensitive topics such
as ethnic migrant entrepreneurship (Koning  & Verver, 2013; Peters, 2002).
 Indonesian migrant entrepreneurs 59
Through exploring the migration and entrepreneurial experiences of migrants
from diferent cohorts, this chapter is able to gauge how such communities navi-
gate the social and institutional environments of the host country, based on their
motivations and mechanisms of migration. As examples, research on Chinese
migrant entrepreneurs in Thailand by Koning and Verver (2013) illustrated the
diferences in the way in which two generations of Chinese migrants in busi-
ness perceive their identities in the host country, whereas Storti’s (2014) study
of Italian migrants in Germany shows the way post-war migrants deal with the
host country through small entrepreneurship ventures. As such entrepreneurs are
highly embedded within their contexts for resources and entrepreneurial oppor-
tunities, this chapter further examines embeddedness in entrepreneurial activities
using a time-based comparison.

Embeddedness in ethnic migrant entrepreneurship

The embeddedness framework in this chapter is outlined by the mixed embed-
dedness model, which is a model specifcally designed to study ethnic migrant
entrepreneurs. According to the mixed embeddedness model, ethnic migrant
entrepreneurs are embedded within their particular opportunity structure, infu-
enced by layers of societal factors within the host–home country dynamics (Jones,
Ram, Edwards, Kiselinchev, & Muchenje, 2014; Kloosterman, 2010; Klooster-
man & Rath, 2001). In particular, ethnic migrant entrepreneurs are embedded
in the internal, micro-environment of their entrepreneurial ventures and the
external structure of the host country through complex community-level and
nation-level environments (Abd Hamid, Everett, & O’Kane, 2018; Ram, Theo-
dorakopoulos, & Jones, 2008). More importantly, this model specifes the role
of political, spatial, economic and regulatory contexts afecting an ethnic migrant
entrepreneur’s entrepreneurial venture (Carter, Mwaura, Ram, Trehan, & Jones,
2015; Jones et al., 2014; Kloosterman, 2010). As such, for this chapter, IMEs are
conceptualised as embedded within the dynamics of their home countries and the
host country, which will hold important implications for the process of starting a
venture in the host country as a migrant.

Intra-regional migration, diaspora waves

and embeddedness
Embeddedness within the scope of ethnic migrant entrepreneurship is opera-
tionalised as entrepreneurs’ home country relations within the setting of the host
country, which covers layers of societal and contextual factors within the host–
home country dynamics. Through the embeddedness lens, this chapter investi-
gates the diferences and similarities of the ways pre-1997 and post-1997 IMEs
deal with intra-regional migration and entrepreneurship activities. IMEs from dif-
ferent waves of intra-regional migration are embedded within the history, struc-
tures and processes experienced in their home and host countries. Consider these
two situations: (1) a migrant from a politically unstable nation feeing his/her
60 Hamizah Abd Hamid
country pushed into entrepreneurship due to lack of employment opportunities
and (2) a migrant from a relatively stable country equipped with resources for
entrepreneurship being self-employed in a host country. Ethnic migrant entre-
preneurs from Situation (2) are likely to fare more fortunately than entrepreneurs
from the frst situation, as they are more equipped to start a new venture in a
foreign nation. In this regard, the way an ethnic migrant entrepreneur deals with
the process of migration and entrepreneurial venture commencement in the host
country is almost contingent with his/her resources and relations to his/her
home country.
To understand the diferences between entrepreneurs in Situation (1) and
Situation (2), this chapter utilises a time-based boundary to complement the
embeddedness framework outlining this chapter. A  time-based boundary
will delineate individuals’ experiences with regards to time and environment
(Ancona, Okhuysen, & Perlow, 2001; Kim, Bansal, & Haugh, 2019) given the
socially constructed nature of time (Bluedorn & Standifer, 2006). As this chap-
ter is examining variances in experiences, diferent points of time are taken into
account (Bluedorn & Standifer, 2006), especially for experiences with regards to
migration, as time-sensitive large-scale changes (e.g. the Arab spring or Brexit)
may impact migrants’ resources and opportunities (Erel & Ryan, 2019).

Research focus
The embeddedness framework has been applied to many community-based
entrepreneurship topics (e.g. see McKeever et al. (2015)). Although these stud-
ies have assisted our understanding about the way entrepreneurship activities are
bounded contextually, a time-based comparison on entrepreneurship activities
has yet to be done, especially within ethnic migrant entrepreneurship context.
In this regard, this chapter’s research focus is How do ethnic migrant entrepre-
neurs from diferent waves of migration build their ventures in the host country? To
adhere to the embeddedness framework, this chapter focuses on the migration
of IMEs to Malaysia, comparing two groups of IMEs (pre-1997 and post-1997
IMEs). Here, particular attention is paid to both groups’ home country embed-
dedness in the host country in their process of migration and building a venture.

Indonesian migration to Malaysia: context and focus

Intra-regional migrations especially in Asia are largely infuenced by relationships
maintained by migrants in the migrant-receiving and migrant-sending countries
(Hugo, 2014), which shape their embeddedness within the region. Migration
to Malaysia has seen a positive increase since the 1980s (United Nations, 2019),
in which most of the migrants come to Malaysia to fll the demand for low-
skilled jobs (Kaur, 2008). Malaysia is particularly attractive as a labour market to
migrants from neighbouring countries such as Indonesia, the Philippines, China,
Bangladesh, India, Thailand, Myanmar and Pakistan, given its stable economic
growth that induces job creation (World Bank, 2019). Migration to Malaysia is
 Indonesian migrant entrepreneurs 61
further encouraged by Malaysia’s geographic location, which is centrally located
in Southeast Asia’s most congested migration route; this facilitates the relocation
of many multinational companies to the nation which encourages a large demand
for foreign workers (Bastide, in press). With regards to the demographics of
migrants received by Malaysia, as of the year 2019, the largest migrant-sending
countries are Indonesia, followed by the Philippines, Bangladesh, Thailand,
Myanmar, Nepal, India and China (United Nations, 2019), with consistent
increase in migration from Indonesia, as shown in Figure 5.1.
Indonesia as a migrant-sending nation, however, is a country characterised by
its multi-ethnic and multi-cultural society encompassing over 200 ethnic groups.
Its national culture is largely infuenced by various religions including Islam,
Christianity, Buddhism and Hinduism. Indonesia diaspora are primarily promi-
nent in Malaysia, Saudi Arabia and the United Arab Emirates, mainly employed
in service and manufacturing sectors (United Nations, 2019; World Bank, 2017).
Present-day Malaysia and Indonesia share a similar history, given that both coun-
tries belong in the Indo–Malay archipelago and are connected through trade,
migration and marriage (Liow, 2005a). Indonesian migrants’ permanent pres-
ence in major Malaysian urban areas is facilitated by Indonesians who were able
to obtain Malaysian permanent resident status (Wong, 2006). The Islam-related
afnity, racial and linguistic similarities shared common history and geographi-
cal proximity in the Malay Archipelago have largely defned Malaysia–Indonesia
bilateral relations. These commonalities and similarities have been assumed under
the underlying concept of serumpun (Khalid & Yacob, 2012), described as the
organising principle of Malaysia–Indonesia relations (Liow, 2005a, 2005b).
Therefore, within the framework of embeddedness, Indonesian migrants are

Migraon to Malaysia from Indonesia, 1990–2019

4,000,000
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
1990 1995 2000 2005 2010 2015 2019

Total Indonesia

Figure 5.1 Migration from Indonesia to Malaysia

62 Hamizah Abd Hamid
largely embedded by their home country in Malaysia. This concept can be seen in
the propensity for Indonesian migrants to live in clusters of Indonesian societies
in the host country even though they are able to converse and communicate with
the locals in Malaysia.
In general, Malaysia has made more economic development progress than
Indonesia; therefore, for Indonesians, migrating to Malaysia is seen as a chance to
improve their lives. In the early 20th century, large-scale migration from Indone-
sia to Malaysia started to develop when the British colonial government decided
to recruit Java Island Indonesian workers from the then-Dutch East Indies. This
was based on the rationale of Javanese and Malays sharing similar cultures and
religions, thus leading to the assumptions that they might assimilate easily (Kaur,
2004). Closeness in culture in the context of Indonesians in Malaysia enables
intercultural communication through the similarities in language (Abd Hamid
et  al., 2018; Jamaludin, Senik, Abd Hamid,  & Muhamad, 2020). In relation
to the locals’ favourability towards certain migrant groups (Weiss  & Tulin, in
press), such closeness in culture provides Indonesian migrants in Malaysia lever-
age against migrants from other countries (e.g. migrants from Bangladesh and
the Philippines) especially in communicating with the locals. Cultural closeness is
complemented by geographical proximity; there are six migration corridors from
Indonesia to Malaysia spanning air, water and land travel, which further encour-
ages the dynamic mobility of individuals from Indonesia to Malaysia (and vice
versa) (Spaan & van Naerssen, 2018).
The high number of Indonesian migrants to Malaysia is partly a result of the
rapid transformation of Malaysia during the 1980s and 1990s, in which most
of them arriving for employment. Aptly called Indonesian labour force, Tenaga
Kerja Indonesia or TKI, Indonesian workers have been documented to be willing
to work long hours for low wages. Indonesian men are generally employed in the
construction sector, whereas Indonesian women generally can be found working
as domestic help, factory employees and restaurant workers (Khalid  & Yacob,
2012; Rahman & Fee, 2009).
An important event in the history of Indonesia is during the economic
downturn in 1997. The devaluation of Thai Baht; the economic crisis led to a
political one, called Orde Baru, which is a political restructuring that impacts,
among others, the private sector in Indonesia which entails the closing of many
businesses and industries causing business and employment loss (Munandar,
2003). A  wave of emigration around 1997 to 1998 ensues, partly as a result
of such political reform and fnancial crisis (Arifn et  al., 2015); this mainly
shapes Indonesia’s emigration landscape in which more high-skilled emigra-
tion is witnessed during such times. This partly explains Indonesian migration
motivations to other countries during the late 1990s, especially to Malaysia,
composed by resource-rich professionals and business owners (Hasanah, 2015).
Indeed, Indonesian migration to Malaysia, pre- and post-late-1990s has shaped
a multifaceted horizon of migrants, from unskilled workers to skilled profes-
sionals. With regard to this, a qualitative study is undertaken on IMEs who
came to Malaysia before 1997 post 1997 to further understand the dynamics of
 Indonesian migrant entrepreneurs 63
embeddedness in ethnic migrant entrepreneurship, focusing on the context of
Indonesia–Malaysia.

Research methods
This chapter employs a qualitative design in enabling the investigation of the phe-
nomenon in its real-life context (Yin, 2014) and builds detailed narratives display-
ing the process (Flyvbjerg, 2006). In this chapter, purposive sampling is applied
in selecting the participants of this chapter to facilitate comparisons (Miles  &
Huberman, 1994), which is instrumental in the initial stages of data collection
planning (Denzin & Lincoln, 2011). The sampling of Indonesian entrepreneurs
and their ventures was guided by the following criteria:

• Indonesian entrepreneurs who arrive in Malaysia since before 1997 and after
1997
• Indonesian entrepreneurs who have experienced operating at least one busi-
ness venture in Malaysia
• Indonesian entrepreneurs whose ventures have been operating for one or
more fnancial years in Malaysia

For consistency reasons, this chapter focuses on IMEs in greater Kuala Lum-
pur, Malaysia. To achieve a nuanced perspective of the phenomenon, interviews
were held with three key societal association informants, namely an Indonesian
embassy representative focusing on trade and migration, a community leader and
the president of an Indonesian trade association in the migrant-receiving country.
Such perspectives encourage understanding development-related migration top-
ics (De Haas, 2010; Gamlen, Cummings,  & Vaaler, 2019). The details of the
informants in this chapter are summarised in Tables 5.1 and 5.2.

Table 5.1 Sources of primary data for the study

Name Year of Gender Education Form of Details of

arrival business entrepreneurial
venture

IME1 Pre-1997 Male Master’s General Jamu (Indonesian

degree partnership herb products)
IME2 Pre-1997 Male Upper General Logistics
secondary partnership
IME3 Post-1997 Male Master’s General Indonesian FMCGs
degree partnership (fast-moving
consumer goods)
IME4 Post-1997 Female Bachelor’s General Spa services and
degree partnership products
IME5 Post-1997 Female Master’s General Indonesian FMCGs
degree partnership

(Continued)
64 Hamizah Abd Hamid
Table 5.1 (Continued)

Name Year of Gender Education Form of Details of

arrival business entrepreneurial
venture
IME6 Pre-1997 Male Upper General Logistics
secondary partnership
IME7 Post-1997 Male Bachelor’s General Teakwood furniture
degree partnership
IME8 Post-1997 Female Bachelor’s General Indonesian-based
degree partnership food
IME9 Pre-1997 Male Upper Sole trader Textile and groceries
secondary
IME10 Pre-1997 Male Diploma General Indonesian FMCGs
partnership

Table 5.2 Summary of supplementary respondents

Respondent type Name (coded) Details

Embassy representative ITE Embassy representative focusing

specialising on trade on migration and trade
Within-community trade ITL Leader of an Indonesian trade
association leader association in Malaysia,
members of the association
conduct and operate small to
medium-sized entrepreneurial
ventures in Malaysia
Within-community ICL Leader of a community
association leader association of Indonesian
migrants in Malaysia. This
association focuses on the well-
being of Indonesian compatriots
in the migrant-receiving country

Secondary data sources were used for cross-checking purposes, through

validating the fndings from the interviews and gathering further informa-
tion from partial sources. This was conducted during and after data collec-
tion in three stages: frst, employing a case-level review of community-centric
entrepreneurial activities referred from community documents and sources;
the second step involved conducting a frm-level examination underlined by
the information from company-based sources including websites and com-
pany documents; and the third consisting of an individual-level assessment of
the entrepreneurs was conducted based on the information available on their
company websites.
The participants were contacted via phone prior to interviewing and were
given details about this chapter. Interviews within the duration of 25 to 90 were
digitally recorded, with the consent of the interviewees. In total, 735 minutes of
 Indonesian migrant entrepreneurs 65
face-to-face interviews were conducted (thirteen sessions). All interviews were
held at the participants’ business/formal premises to have a deeper understand-
ing of their responses. The body of data was divided into two categories: IMEs
who have arrived in Malaysia before the year 1997 (pre-1997 IMEs), and IMEs
who have arrived in Malaysia after 1997 (post-1997 IMEs) to understand the
way IMEs difer in terms of their migration and entrepreneurial motivations.
An abductive approach was undertaken to analyse the data, in which a deduc-
tive approach was employed using the embeddedness framework. An inductive
approach followed, whereby the observed narratives were analysed by identifying
themes and patterns. The themes were then synthesised in accordance with the
embeddedness framework.

Results
Five of the interviewees came to Malaysia in 1998 (the respondents mentioned
that the fnancial crisis in Indonesia which was at its peak in 1998 is one of the
main reasons they left the country), while the years of entry for the rest of the
IME interviewees are between 1969 and 1990. Comparisons are made based on
the multi-focal date of arrival for the studied IMEs especially with regards to the
contextual aspects underlying their migration motivations and mechanisms. The
interviewees have at a minimum upper secondary education qualifcation and
have diferent personal and professional motivations to migrate to Malaysia. Only
one of the businesses is in the form of sole proprietorship, whereas the rest are
in the form of general partnerships. It can be observed that all of the companies
studied in this chapter have at least one home country element in their opera-
tions, shown in the characteristics of the products or services that they ofer and/
or their initial target market.

Motivations of migration to Malaysia: push factors

from the migrant-sending country, pull factors from the
migrant-receiving country
To contextualise the factors encouraging the IMEs’ migration to Malaysia, the
motivations to emigrate are categorised into two main dimensions: push and pull
factors. Push factors in this aspect include the political contexts of the migrant-
sending country and employment reasons to migrate. Pull factors refer to the
aspects of the host country that attract IMEs to migrate, which include the pros-
pects for business opportunities and family reunifcation.
Only one pre-1997 IME came to Malaysia due to push factors from their home
country. IME10, an herbal trader (or jamu, in Bahasa Indonesia), explained that
he came to Malaysia for employment reasons and decided to build his own ven-
ture in the host country:

I moved to Malaysia in 1980, as an employee with a trading company that spe-

cialises in Indonesian herbal products, or jamu and cosmetics.
(IME10)
66 Hamizah Abd Hamid
For the post-1997 IMEs, the respondents commented that the political
changes happening around the late 1990s were primarily a reason for them
to emigrate. Further investigation into this reason revealed that the political
changes had potential detrimental efects towards their well-being in their home
country, which primarily infuencing their employment and entrepreneurial
activities. This is illustrated by the following comments from the community
leader (ICL), embassy representative (ITE) and an entrepreneur in the teakwood
industry, IME7:

Indonesian entrepreneurs come to Malaysia with diferent background and

stories, depending on the year of arrival.
(ICL)

Those that I mentioned who came later, these are the people who left Indonesia
due to the political changes that was happening during the time, I were experi-
encing some political changes in the government, which is the end of Orde Baru,
resulting in political restructuring in the republic. The said situation could be
one of the push factors for these entrepreneurs to come to Malaysia.
(ITE)

(I came here) due to the transfer of power in Indonesia. I came to Malaysia to

survey the market and look into what kind of opportunities for me to venture
into.
(IME7)

The pull factors within the context of this chapter are mainly the attracting aspects
of the host country encouraging IMEs’ migration. Given the economic devel-
opment of Malaysia which is relatively higher than Indonesia, IMEs are pulled
into migration in the migrant-receiving country as the host country provides
them with employment and entrepreneurial prospects. The pull factors for IMEs
pre-1997 and post-1997 are similar in which the respondents explained that the
cultural and geographical proximity of Malaysia to Indonesia is one of the main
attracting factors to the host country as it reduces the need for learning new
markets and new business methods for the respondents. Further, according to
our data, cultural similarities reduce IMEs’ needs to specifcally tailor their prod-
ucts and services to another country’s preference, while geographical proximity
enables individual and product mobility. This is illustrated by the following com-
ments by a pre-1997 IME, IME9:

Malaysia is so near to Indonesia, so accessible, so it was easy for me. I suppose

because my parents were concerned that I would get too comfortable living in
Indonesia, they asked me to go to Malaysia and look for opportunities. I decided
to open a textile business in 1989 because my family is involved in the business
back home.
(IME9)
 Indonesian migrant entrepreneurs 67
Several post-1997 IMEs, IME3 (who operates a Malaysia–Indonesia trade ven-
ture) and IME4 (who conducts a Balinese spa operation) also explained that
Malaysia–Indonesia cultural and geographical proximity are attracting factors for
their professional-based migration:

The reason why Malaysia was chosen is because of the cultural proximity, dis-
tance and also, we have the Indonesians here as our base clients.
(IME3)

Malaysia and Indonesia, we are similar in more ways than one. The food, the
language, the culture . . . what you wear, what you eat and what you use in daily
basis are similar. So the process of adapting to a new market was easier because of
that. Then, when it comes to importing and shipment, because of the distance, it
will not cost you a bomb. And because of the geographical distance, you can put
your shipment in another person’s container and it will arrive to you.
(IME4)

As a country with higher development level than the IMEs’ home country,
Malaysia is also considered as “a place of opportunity”, as clarifed by an Indone-
sian trade association leader, ITE:

The situation in Indonesia can be a challenge in operating a business. Malaysia

is seen by these entrepreneurs as a place of opportunity . . . to start a new life, to
start a new business . . . There are more opportunities here because of good eco-
nomic conditions here, and proximity in terms of distance and culture.
(ITE)

In this aspect based on the evidence, the push factors of emigration largely infu-
ence post-1997 IMEs to move to Malaysia, whereas the pull factors that include
geographical and cultural closeness encourage them to pursue opportunities in
the host country.

Interlinked mechanisms of migration and

entrepreneurship activities within the framework
of embeddedness
The IMEs were asked about the way migration and entrepreneurial activities
were facilitated for them. Responses within this dimension include family and
friends in the migrant-receiving country, their employers’ arrangements and
social passes. In general, professional mechanisms enabling the migration process
are largely linked with IMEs’ motivation to emigrate; these mechanisms include
employment and entrepreneurial aspects. Profession-wise, post-1997 IMEs
came to Malaysia as expatriates based on the professional assignments given by
their employers in their home country. The expatriate assignments then evolved
into entrepreneurship projects which eventually encouraged them to leave their
68 Hamizah Abd Hamid
employment to focus on their entrepreneurial ventures in Malaysia. For IMEs
who came to Malaysia solely to start a business venture, Malaysia is seen as an
opportunity-based market for their established entrepreneurial ventures in Indo-
nesia. When gauged further, the mechanisms under this category are mainly
related with IMEs who migrate to Malaysia for opportunity reasons, and they are
usually equipped with fnancial means to survive in the host country, as illustrated
in the following quotations by IME4, a spa operator; IME5, a food trader; and
ITE, an Indonesian embassy representative:

The spa company that I was working for decided to open a branch in Malaysia.
That was 1998.
(IME4)

During my tenure as a country manager in Malaysia, I  took the time to

learn and adapt to the culture in Malaysia, and turns out, there is not much
diference.
(IME5)

Some came to Malaysia as labourers, and stayed on and became entrepreneurs.

(ITE)

Mechanisms enabling migration

For pre-1997 IMEs, personal and institutional mechanisms facilitating the migra-
tion process are primarily interrelated with IMEs’ personal afliations in the host
country. This category includes aspects such as having friends, close family and
long-distance relatives in Malaysia who can assist their migration processes, and
facilitated by the institutional arrangements of the migrant-sending and migrant-
receiving countries, manifested in the form of social passes. Several narratives
within this aspect suggest that the relationships that they have in Malaysia pro-
vided them with employment opportunities and living arrangements which are
otherwise more difcult to obtain for migrants who do not have any connections
in the host country. Consider the following comments by IME1 and an Indo-
nesian association community leader, ICL, regarding their home country social
embeddedness in the host country:

In terms of settlement, I  have received some assistance from my relatives who

have moved to Malaysia years before I came here. Also, my uncle has provided me
with working experience, by ofering me to work in his Jamu business.
(IME1)

Why did I  say accessible? Some have long distance relatives here. Some also
have acquaintances from their village that have arrived in Malaysia much
earlier.
(ICL)
 Indonesian migrant entrepreneurs 69
Post-1997 IMEs’ personal mechanisms facilitating the migration process are pre-
dominantly interrelated with IMEs’ bridging relationships in the host country.
IMEs within this category do not have any family members living in Malaysia,
unlike pre-1997 IMEs. However, their relationships in the host country are pre-
dominantly marriage-based or professional-based. This is illustrated by the expe-
riences of IME5 and IME8. IME5 who conducts a trade venture clarifed that her
arrival (and the startup of her venture) is facilitated by her previous employment
opportunity in Malaysia, while IME8 who manages a restaurant explained that
she came to the host country as a result of marriage:

I came here as the country manager for Company X, stayed on the job for three
years in Malaysia . . . I take it as a learning experience for me. I was learn-
ing the system and getting to know the people involved in this business. I also
have got the chance to meet Mr Lee, a local, who was the previous owner of this
company. He was one of our clients and now he is one of the partners in this
business.
(IME5)

To be with my husband . . . My husband mainly has infuenced my decision [to

migrate and start a business]. When we got married, he asked me what I want
to do in Malaysia, I told him that I would like to build a restaurant, so he helped
me build it.
(IME8)

Mechanisms enabling entrepreneurship activities

The theme of intra-regional migration mechanism enabling entrepreneurial
activities differs across the two groups. For pre-1997 IMEs, their intra-
regional entrepreneurial mechanisms are primarily facilitated by their fam-
ily members in Malaysia, and, for post-1997 IMEs, their mechanisms are
mainly enabled by inexpensive procurement from Indonesia. IME1, a pre-
1997 IME, explained that his entrepreneurial venture began after he accu-
mulated business knowledge as a result of working for his uncle in Malaysia,
and IME2, who is also a pre-1997 IME, clarified that his family members
both in Malaysia and Indonesia have assisted him in developing his logistics
venture:

I managed my uncle’s business two years after I arrived in Malaysia. . . . In

1992, after working with my uncle, I started a small business, very small. With
the trust of these manufacturers, I imported their products and sell these prod-
ucts in night markets and directly to consumers. I have received some assistance
from my relatives who have moved to Malaysia years before I came here. Also,
my uncle has provided me with working experience, by ofering me to work in
his Jamu business.
(IME1)
70 Hamizah Abd Hamid
There is a strong element of family values in this company, as I built this company
using the money that I have gained by selling my father’s land, and my family,
both in Malaysia and Indonesia, helped me a great deal with this company.
(IME2)

Many of the post-1997 IMEs’ ventures are facilitated by inexpensive procure-

ment opportunities in Malaysia. Here, IMEs’ relations to Indonesia in terms of
entrepreneurial framework are largely strategic. Some examples of ventures con-
ducted within this category include procuring teakwood furniture, Balinese spa
products and food to be traded in Malaysia. For instance, IME4, a spa operator,
clarifed that she sourced the products for her operation from her hometown
in Bali, and IME7 who conducts a teakwood trade operation explained that he
procured the materials for his venture from his hometown, which is one of the
premier locations for teakwood supplies in Indonesia. In this way, they are able
to source the products in an inexpensive manner and ensure the quality of the
procured products based on the trust and relations that they have in their home-
towns. Consider the following quotations by IME4 and IME7:

We only source our products from Bali because I know the market . . . The fur-
niture and wood products, we source them for Bali.
(IME4)

Our furniture is made from Indonesian teak wood, and made in our manufac-
turing plant in Indonesia, in my hometown to be exact.
(IME7)

A similar theme across the groups is the role of the Indonesian community in Malaysia;
a consistently large number of Indonesians in the host country meant that IMEs are
able to leverage on their fellow countrymen as a customer base and a source of inexpen-
sive labour. Some entrepreneurs build their ventures using their fellow countrymen’s
assistance and utilise them as markets for their ventures. This is exemplifed by IME2
and IME6, who are pre-1997 IMEs, and IME3 who represents a post-1997 IME:

The company was being built under the eforts of Indonesian students in the
nearby university; a large part of this company was being contributed by
them, in terms of capital and labour . . . We have a strong presence among the
Indonesian community in Malaysia . . . mainly with students, as we started
of with the help of Indonesian students. We try to sponsor a few of their activi-
ties. As for the Indonesian workers, who are our main clients, most of them are
return clients, and we are known through word-of-mouth, and other media.
(IME2)

Right now, we only have Indonesians as our target market . . . specifcally Indo-
nesian workers in Malaysia. The bosses of these workers may also be our clients
 Indonesian migrant entrepreneurs 71
but then again they contact us because they would like to do something nice for
their worker . . . in a sense, almost all of our clients are Indonesian workers.
(IME6)

We have the Indonesians here as our base clients. There is a huge number of
Indonesian workers here . . . We came to Malaysia in 1998, started importing
to Hong Kong and Vietnam since the last ten years, because we have a huge
number of Indonesian workers there, serving us as a market.
(IME3)

Discussion
The investigation of the narratives revealed that there are several similarities and
diferences for the IMEs from across diferent waves of migration (pre-1997 IMEs
and post-1997 IMEs). In particular, pre-1997 IMEs’ migration motivations are
based on fnding employment and entrepreneurial opportunities, whereas post-
1997 motivations are based on professional assignments and the intention to
start a new life. Geographical and cultural proximity remain as dominant pull
factors for both groups. The mechanisms enabling migration and entrepreneurial
endeavours, however, largely difer for the two groups. The narratives were syn-
thesised and displayed using a matrix in Table 5.3.

Table 5.3 Summary of the fndings

Motivation Migration and entrepreneurial

mechanisms

Subject Pull factors Push factors Mechanisms Mechanisms

enabling enabling
migration entrepreneurial
process activities

IMEs arriving Geographical Finding Family in Family members in

to Malaysia proximity employment and Malaysia Malaysia
pre-1997 Cultural entrepreneurial Indonesians as
proximity opportunities base customers
Indonesians
as a labour
source
IMEs arriving Geographical Professional Marriage Inexpensive
to Malaysia proximity assignment Professional procurement
post-1997 Cultural Starting a new life ties from
proximity Indonesia
Indonesians as
base customers
Indonesians
as a labour
source
72 Hamizah Abd Hamid
Embeddedness, geographical and cultural proximities in
motivations to migrate
Pre-1997 IMEs, in general, are motivated to emigrate to Malaysia to work, less
prepared to start a venture, and their migration processes were enabled by their
relatives in the host country. They stayed on and become entrepreneurs, some
serving their home countrymen as target markets, while some utilises the similar-
ity between Malaysia and Indonesia to serve the local markets. Post-1997 IMEs,
however, are more prepared resource-wise to start a venture in the host coun-
try. Most of them are equipped with professional ties in Malaysia as a result of
professional working experience in the host country although many of them do
not have any personal or family relationships in Malaysia. The varying migration
motivations of pre-1997 and post-1997 IMEs are balanced by the geographical
and cultural proximities of Malaysia and Indonesia; such proximity encourages
trade facilitation and communication for IMEs across the groups thus further
enabling their migration and entrepreneurial processes. Here, IMEs are embed-
ded within their intentions and resources in the host country, and such embed-
dedness is further shaped by the geographical and cultural proximity of Malaysia
and Indonesia. In this regard, such aspects provide IMEs with a certain edge
against other migrant groups (Weiss  & Tulin, in press) but utilised diferently
according to migrant cohorts. The embeddedness view in migrant entrepre-
neurship suggests that migrant entrepreneurs’ opportunity structure is shaped
by the host–home country dynamics (Jones et  al., 2014; Kloosterman, 2010;
Kloosterman & Rath, 2001). The data of this chapter illustrate that for migrant
entrepreneurs migrating within-region, the historical element mainly shapes their
experiences thus infuencing their motivations and strategies in operating ven-
tures in the host country.

Entrepreneurship activities resulting from home country

embeddedness
An emerging theme in the data is the role of the entrepreneurs’ home country
diaspora community in the migrant-receiving country (Indonesians in Malay-
sia) as a source of support for IMEs’ ventures. Pre-1997 IMEs and post-1997
IMEs show similar qualities within this theme whereby both groups leverage
on the Indonesia community in Malaysia as (1) their base customers before
moving on to the more lucrative local market and (2) a source of inexpensive
labour. The large number of Indonesians in Malaysia could explain this propen-
sity as the size of the Indonesian diaspora community is large enough to form
a market and a labour pool. A dimension unavailable in pre-1997 IMEs is post-
1997 IMEs’ strategic utilisation of their hometowns as a source of inexpensive
procurement; some IMEs obtain business supplies and products to be traded
in Malaysia from their hometowns, IMEs within this dimension clarifed that
this procurement process is further enabled by trust, as they personally know
the people involved.
 Indonesian migrant entrepreneurs 73
From the data, the mechanisms enabling IMEs’ migration to Malaysia and
their ventures are largely composed of professional, personal and institutional
explanatory dimensions. Based on the diferent characteristics of such mechanisms
from the fndings, it can be suggested that historical contexts mainly infuence
migrants’ motivations and strategies in the host country. Migrants as individuals
experience time and environment in accordance to the historical social and politi-
cal contexts, as their well-being in their home countries are largely afected by
the changes in their home nations. Here, the socially constructed nature of time
(Bluedorn & Standifer, 2006) shapes individuals’ (in this case migrants) experi-
ences in a specifc situation (Ancona et al., 2001; Kim et al., 2019).

Cultural similarity, geographical proximity, home

country population and historical contexts for
Indonesian migrant entrepreneurs
Indonesia–Malaysia cultural similarities, which mainly covers similarity in lan-
guage and shared history enables IMEs’ communication in the host country,
product knowledge and preferences. The two countries’ geographical proxim-
ity, however, encourages mobility for products and individuals. Such proximity
attributes to a large home country-based population in the host country, which
further enables activation of personal networks and providing IMEs with a cus-
tomer base and labour source. Cultural similarities, geographical proximity and a
large number of home country population in the host country consistently act as
facilitating factors for migration and entrepreneurship for IMEs in Malaysia for
both cohorts. However, a comparison of two migrant cohorts in the host nation
shows that historical contexts could attribute to IMEs’ migration and venture
strategies in the host country. The embeddedness of the migration and entrepre-
neurial activities shaped by cultural similarity, geographical proximity and histori-
cal aspects for this chapter is illustrated in Figure 5.2.

Conclusions
This chapter contributes to the discussion of embeddedness in migration by
examining IMEs’ migration motives and enabling mechanisms in Malaysia, out-
lined by the embeddedness framework (Jack & Anderson, 2002; Uzzi, 1997).
The types of migrants received by Malaysia are largely for the purpose of labour,
especially in low-skilled sectors such as construction and domestic services.
Theory-wise, this chapter suggests that embeddedness can be more salient in
intra-regional contexts especially when historical dimension is taken into account.
More importantly, this chapter indicates that although the motivation to migrate
and their entrepreneurial focus difer (less strategic versus more strategic), pre-
1997 and post-1997 IMEs are enabled by (1) the Malaysia–Indonesia cultural
and geographical proximity and (2) the large number of Indonesians in Malay-
sia. Practice-wise, the consistent role of Indonesia–Malaysia cultural and geo-
graphical proximity and the large population of home country population in the
74 Hamizah Abd Hamid

Intra-regional enablers

Communicaon in the Cultural similaries Knowledge of product

migrant-receiving country • Language preferences and tastes
• History

Individual mobility Geographical Product mobility

proximity

Home country
Development of personal populaon in the Customer base
networks migrant-receiving Labour base
country

Aspects facilitang
Aspects facilitang migraon entrepreneurship acvies

Shaped by:
• Historical contexts in
migrant-sending country

Figure 5.2 The embeddedness of the migration and entrepreneurial activities

host country provides a structure for future entrepreneurial opportunities for

entrepreneurs between the two countries. In contrast to the traditional view of
ethnic migrant entrepreneurship where the home country market is considered
unproftable, a large home country population could mean otherwise for ethnic
migrant entrepreneurs. Additionally, the proximities shared by the two countries
imply that little to no modifcations are needed when it comes to marketing
and business for locals. The narratives illustrate that the trajectory towards busi-
ness ownership in a close, neighbouring country for Indonesian entrepreneurs is
multi-dimensional; a result of various push and pull factors enabled by layers of
migration-facilitating mechanisms and embeddedness. As such, skilled migrants
can utilise this framework as a guiding model to navigate their mobility within
the region.
This chapter investigated Indonesian entrepreneurs who migrate to Malaysia
who develop and operate entrepreneurial ventures. This chapter’s fndings indi-
cate that within-migration experience is beyond “searching for a better life”, in
which migrants are embedded within layers of ties and relations to their home
countries, especially if the sending and receiving countries are geographically and
culturally proximate. As such, this chapter illuminates Indonesian entrepreneur-
ship from the perspective of migrant entrepreneurship and practice-wise, the
fndings of this chapter will be valuable for policymakers in Indonesia especially
within the areas of international labour and trade.
 Indonesian migrant entrepreneurs 75
Although limited by the context of IMEs in Malaysia, this chapter’s fndings
demonstrate that intra-regional migration will see a more dynamic landscape
beyond labour-based migration. As this chapter is particularly focused on South-
east Asia, perhaps future research can consider studying the aspects shaping intra-
regional migrant entrepreneurship in other geographical regions, using historical
accounts and narratives.

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6 Technology entrepreneurship
in Indonesia Vanessa RattenTechnology entrepreneurship in Indonesia

Vanessa Ratten

Introduction
Digital transformation is a market process that has the potential to signifcantly
change business practices (Apostolopoulos et  al., 2020). Digitalisation is com-
plex as it involves creating new electronic applications that further advance the
internet economy. Cutting-edge technology is technology that includes new
forms of technological innovation into its products, services or processes (Ratten,
2020a). The use of cutting-edge technology has revolutionised industries and
spurred entrepreneurship. As a result, technological innovation is increasingly
being used in entrepreneurial endeavours. Emerging technologies are changing
the way individuals and businesses interact in society (Ratten, 2020b). The most
well-known cutting-edge technologies include artifcial intelligence, augmented
reality, virtual reality, wearable technology, robots and big data analytics (Ameen,
Hosany, & Tarhini, in press).
New technologies are revolutionising marketing communications as they
provide more personalised services. This is having profound efects on the way
customers interact with companies by providing a more interactive process.
Virtual reality refers to a technology environment that can or cannot mimic
the real world. This, in turn, is enabling a better experience for consumers that
takes into account real time information. New technology in the form of data
analytics has enabled information to be accessed in real time. This enables huge
amounts of information to be obtained that can provide directions on human
behaviour. By using this data to predict events, it can lead to time efciencies.
Artifcial intelligence refers to the use of technology to make computers do
certain tasks. This involves imitating human behaviour through computers.
Increasingly the use of artifcial intelligence is being promoted in society in
order to provide consumer insights. This is due to the way technology can use
predictive analytics to analyse current and future behaviour, thereby enhanc-
ing customer experiences by encompassing emotional and social intelligence.
The goal of this chapter is to discuss the way technology innovation is utilised
in Indonesia. To do this, a discussion of the role of technology unicorns in
Indonesia is stated. This helps to understand why innovation is needed in the
Indonesian economy.

DOI: 10.4324/9781003187769-6
 Technology entrepreneurship in Indonesia 79
Technology unicorns in Indonesia
A unicorn is a startup that has a valuation of $1 billion or more. The most well-
known unicorns in Indonesia are Go-Jek, Traveloka, Bukalapak and Tokopedia.
Go-Jek is an on-demand and multi-service platform originally developed as a
ride-hailing service. Since its launch in 2015, it has diversifed into an app ser-
vice providing more than 20 services. This includes ride sharing, shopping and
food delivery services. It is considered as one of the most successful Indonesian
startups and was the frst unicorn company in the country. The name Go-Jek
derives from the word ‘ojek’ which refers to motorbike taxis that are common in
Southeast Asia. In order to expand its online payment business, it has acquired
other fntech frms. Go-Jek has expanded its business to the Philippines, Singa-
pore, Thailand and Vietnam. Go-Jek has a number of other products that all have
the ‘Go’ name. This includes Go-Pay, an electronic wallet service; Go-Car, a car
hailing service; and Go-Mart, a grocery shopping service. Other notable prod-
ucts include Go-Clean a cleaning service and Go-Tix an electronic ticketing ser-
vice. Go-Jek has more than 2 million driver partners and 900,000 food merchant
partners. Go-Jek now has three major platforms: consumer, driver and merchant
applications. Go-Jek provides an electronic ecosystem that supports the growth
of entrepreneurial frms. This has been particularly helpful during the Covid-19
pandemic with more consumers and businesses requiring online systems.
Traveloka is an online ticket and hotel booking service. It initially focused on
accommodation and fight bookings but has expanded to include food features,
home protection insurance, movie booking and visa insurance. Its main market is
Indonesia but it also serves Malaysia, Thailand, Philippines, Vietnam, Singapore
and Australia. The website started as a way to compare airline ticket prices but
then started selling airline tickets.
Bukalapak is an e-commerce company that acts as an online marketplace for
enterprises to go online. It started in 2010 as a way of enabling businesses to
sell their goods online. The online environment enables small and medium-sized
enterprises to broaden the market. Due to the large number of consumers in
Indonesia, Bukalapak enables a way of bridging the gap between buyer and seller.
The aim of the company is to help Indonesia’s micro-economy to be competi-
tive. To do this, businesses advertise their services on an e-commerce platform.
Tokopedia is a technology company that specialises in e-commerce. It started as
a marketplace business that has since grown to a fnancial technology company.

Technology innovation
Startups are major economic creators and play a key role in fostering entrepre-
neurship. Newly established businesses in the form of startups are expected to
increase economic development but at the same time be cognisant of social and
environmental obligations. Entrepreneurship is an indispensable part of any
economy. New types of customers have emerged on digital platforms due to the
growth in unofcial businesses. Digital platforms are defned as “a set of digital
80 Vanessa Ratten
resources- including services and content- that enable value-creating interactions
between external producers and consumers” (Constantinides, Henfridsson,  &
Parker, 2018: 381). These businesses are usually in the form of startup enterprises
that are established to fll a certain market need. Often these unofcial businesses
are informal in nature and can respond to rapid change in demand. This makes
them nimble and open to new market opportunities.
The word ‘innovation’ is considered a golden term to describe positive change.
This means that innovation can be misunderstood due to its elusiveness. Whilst
innovation as a concept is commonly used in society, its defnition refers to a
broad concept that is dynamic in nature. This results in the way innovation is
understood by an individual being based on their mindset. Individuals with a
progressive view on innovation view it as a necessity to producing a better society.
Individuals who are happy with current conditions and the status quo may view
innovation as being a costly and time-wasting activity. This is due to innovation
sometimes requiring some form of risk as the outcome of the change is unknown.
This means that special resources may be needed to evaluate the potential of an
innovative idea.
Innovation does not necessarily mean something that is completely new as it
can involve the rediscovery of previous behaviours or include the introduction
of reconfgured behaviour. However, normally innovation involves the introduc-
tion of something new into society. This can include an idea, process or method
depending on the situation. The capacity of an entity to be innovative is called
innovativeness. Innovation implies there is a good outcome from a change. Inno-
vation needs to be considered in a holistic manner as it represents diferent types
of activity. Some technology providers are more innovative than others due to
the kind of technology they are involved in. For example, emerging technology
is based on risk-taking activity, so it needs to keep up to date with societal condi-
tions. Other technology providers due to their large market share and position
in the marketplace do not have to be innovative. This is due to some forms of
technology such as cultural technology being based on historical conditions that
are not likely to change. Due to the emphasis in society on technological innova-
tion, there has been a tendency to assume all innovation as being technologically
based. This is not always the case as innovation can be related to a changing
mindset. Therefore, innovation whilst often involving technology can also refer
to alternations in existing assumptions. This paves the way for new ways of think-
ing to emerge that challenge the status quo.
Innovation is hard work as it takes time to develop. This means not all innova-
tion happens overnight but rather is the accumulation of a lot of efort. To induce
innovation, there needs to be the right processes in place to make it happen.
This means establishing clear goals and reviewing progress at every step. This
will enable an innovative idea to come to fruition. Innovation needs to be man-
aged in the same way other processes are in order to make sure it occurs in the
right way. Most of the innovative ideas come from recognising an opportunity
in the marketplace that others have not seen. Therefore, persistence is needed at
the initial stages of an innovation in order to overcome market resistance. Once
 Technology entrepreneurship in Indonesia 81
the innovation has become recognised as a good idea, it is then easier to man-
age. An innovation difers from other business functions due to it being an idea
or source of knowledge. Thus, other business activities involve doing whereas
innovation focuses on knowing something of value. Astute business managers
value innovation as it can give them a competitive advantage. However, recognis-
ing an innovation then converting it into an opportunity can take time. Innova-
tion arises from a realisation that there is an opportunity in the marketplace.
The inspiration for an innovation can come from a variety of places including
experience or expert knowledge. Therefore, innovation enables existing or new
resources to be used for wealth creation purposes.
Successful innovations often do not last long in the marketplace before they are
replaced by other innovations. Therefore, it is important to build and maintain
an innovation in order to keep its competitiveness. To do this requires an innova-
tion strategy, which refers to a plan of action regarding an innovation. Having
an innovation strategy in place can help prevent negative events from occurring.
This is useful as a risk management strategy and to alleviate concerns. Good inno-
vation strategies engage in forecasting scenarios about potential causes of action.
This helps in clarifying priorities and objectives about an innovation. To do this
requires a well thought-out plan that emphasises the future needs. An innova-
tion strategy requires the integration of a number of systems that are interlinked.
These systems synthesise ideas and help progress an innovation. An innovation
system presents a set of structures that can select which direction to take. This
involves making trade-of decisions and weighing up diferent paths to take.
Innovativeness is a skill valued and increasingly being taught in society. Inno-
vation involves some form of change normally of a positive nature. Increasingly
innovation is being used as a buzzword to describe creativity. This means that the
emphasis is on renewal or modifcations to existing behaviour. In order to stimu-
late economic growth, innovation is required. It helps to move on from the past
and think about future occurrences. It can be difcult to describe innovation as it
takes on a variety of diferent forms, which means that innovation is contextual as
it depends on the circumstances. Innovation is based on the capacity of an indi-
vidual or entity to accept change. This means that there can be some ambiguity
as to how the innovation evolves in the marketplace. Novelty or newness is at the
heart of any conceptualisation of innovation. This means that the change results
from a departure or alteration from existing practices.
There is a tendency to describe innovation in a binary way such as good or bad,
incremental or radical, or evolutionary or revolutionary. This distinction makes it
easier to understand but limits how innovation occurs in society. Therefore, inno-
vation whilst existing in a continuum from small to large change also occurs as a
process. This means that innovation can occur quickly but often is the result of a
number of diferent steps. Each step provides a source of knowledge for an entity
to learn about how to improve. Innovation is based on demand and represents a
source of competitiveness.
Creativity is essential for any form of innovation. This is due to the need to
rethink current practices by involving a problem-solving approach. Powerful new
82 Vanessa Ratten
ideas that emerge in society are based on societal needs. This means creative
thinking is required in order to bring about innovation. Innovation is associated
with invention but is more than invention as it focuses on the business applica-
tions of invention. The main types of innovation are product, process and service-
based. Typically, product innovations refer to changes in tangible goods, whilst
process innovation refers to the time taken to conduct an action being altered.
More recently, service innovations have been emphasised due to the increased
number of intangible transactions occurring in society. The knowledge economy
and resulting digital transformation have emphasised service innovations.
Innovation is a form of dynamic capability as it enables actions needed to
modify behaviour. The dynamism or fexibility is important as the change can
occur in a number of ways. Organisations are seeking to be innovative by modi-
fying their existing operations in order to be more competitive. By looking at
an existing situation in a new way, it can enable new results to emerge. This
alternative way of thinking is useful particularly when new contexts emerge in
the marketplace.

Types of technology innovation

At the heart of most studies on technology, innovation is how to create and
sustain wealth creation. Technology innovation is a word that appears frequently
since it is important in understanding technology business growth. There are
a variety of ways to analyse technology innovation but few explicitly defne its
usage. Moreover, when researchers seldom do defne technology innovation nor-
mally they use a simplistic approach without considering its complex nature. This
makes it difcult to generalise research as whilst there are many research studies
they are analysing it in a diferent way. In order to build a comprehensive body
of research on technology innovation, a number of studies are required but there
also needs to be some degree of comparability.
An opportunity in a technology context can involve an idea or project that is
currently not under consideration by others. Opportunities can be found in the
marketplace by identifying needs. These needs can be in existence or are futuristic
in nature. In order to assess an opportunity, there needs to be a discovery pro-
cess. This means fnding solutions to unmet expectations that exist in society. To
do this is a cognitive process as it requires counterfactual thinking. Technology
innovation involves recognising opportunities by focusing on purposeful change
that can lead to a beneft in the market. Innovation results from a conscious efort
to try new things. This means within each innovation is a sense of curiosity as to
what the idea will produce. Innovation can arise from unexpected occurrences or
situations that require new thinking. Furthermore, market changes can lead to an
innovation taking place. In times of economic turmoil, innovations can take on a
societal function in terms of enabling more members of society access to a service.
In good economic conditions, the innovation may lead to more fnancial gain in
terms of obtaining additional revenue. Moreover, as there has been an increased
usage of technology in the market changes in socio-demographic behaviour
 Technology entrepreneurship in Indonesia 83
require new products or services. This makes innovation useful in order to fll the
gap in the market from technological advancement.
Innovations sometimes have unexpected success with the original idea altered
based on market feedback. Thus, it is important with all forms of innovation
to obtain feedback. This enables innovations to metamorphise into other types
of products that suit specifc market needs. Failure is part of innovation as it
can take numerous iterations of an innovation to result in a successful outcome.
Innovations can initially be disregarded by others due to their unknown nature.
This makes it important to stress the usefulness of an innovation then to educate
others about its role in the market. Some individuals may dismiss innovations as
being a bad idea as they are comfortable with the status quo. This means that cur-
rent market practices may be preferred due to the substantial amount of resources
invested.
Innovations can have unanticipated possibilities that lead to further innova-
tions. An initial innovation may fall fort of expectations and require further adap-
tations. This means that it is useful to think of an innovation as a continual and
dynamic process that changes based on need. Innovation requires ingenuity in
terms of thinking creatively to see possibilities. This means focusing one’s atten-
tion on future market trends to identify gaps in the market. Purposeful innova-
tion requires skill. This refers to being innovative is a process that can be learnt
over time. Individuals who persist and overcome hurdles are likely to be more
innovative. This is important in today’s competitive global marketplace when
diferentiating your product from others is important. Innovation takes time and
diligence in obtaining a good outcome. Businesses need to adapt due to changing
government regulations and technology requirements. Thus, it is important that
businesses think about the future in anticipating change.
Innovation needs to be adopted as part of a business life in order to create
value. Once an innovation is successful, there can be a risk that a sense of compla-
cency results. This can be damaging to the innovation as competitors come into
the marketplace and copy their idea. Therefore, continual learning and acquir-
ing new knowledge about marketplace changes are needed. Sustained innovation
over a long time period is needed in order to cope with change. Managing cur-
rent market conditions with future needs can be difcult. Therefore, businesses
need to have highly efective learning systems to make this happen. Improving
on today’s innovation whilst preparing for tomorrow is a skill. This is important
as businesses evolve and more knowledge about an innovation becomes known.
Innovation is associated with major technological and global advances such
as the introduction of mobile commerce systems. Although most of the innova-
tions are based on cumulative incremental innovations that take time to develop,
innovation also involves the creative combination of new skills that can be utilised
in the market. Incremental innovations are small changes to existing products
or services. They normally provide extensions or additional features that add
value. Incremental innovations occur all the time and are often derived from
customer requirements. Disruptive innovation involves any form of substantial
ongoing change. This means that the disruption caused by innovation takes on
84 Vanessa Ratten
a risk-taking nature as there is a threat that the efort will result in negative con-
sequences. Thus, disruptive innovations need to be analysed in a holistic manner
taking into account both short- and long-term consequences. This enables the
short-term reactive reaction to be softened by more longer-term positive out-
comes. Disruptive innovation has a tendency to shake up an industry by intro-
ducing fundamental change. This can make it difcult for existing frms to keep
up to date with new change.
Kahn (2018) suggests that the main types of product innovation are cost
reductions, product improvements, line extensions, new markets, new uses, new
category entries and new to the world products. Cost reductions enable cheaper
prices to be paid for products. This can involve the use of new materials or meth-
ods that lower the cost of production. Product improvements involve enhance-
ments to products that increase a product’s value in the marketplace. To do this,
new features might be added to a product in order to increase its usability. This
enhances its usefulness in the market and attracts customers. The main charac-
teristic of product improvements is that the product is better than before. Line
extensions involve adding new options to an existing product. This can include
complementary services to those that are already in existence in the marketplace.
Additional product oferings help increase a products marketability. New markets
involve fnding new usages for a product. This can include alternative ways to
use the product or the entry into new geographic markets. New uses involve
positioning products for diferent usages. This enables new forms of products to
emerge that have additional functions. New categories involve making products
that suit an additional market segment. This can include a previously unknown
market segment that emerges due to technological innovation. New to the world
products are completely new products that have not been seen before. They can
emerge from technological developments that enable ideas to become a reality.
Innovation is critical to tourism development and enables new business models
to emerge in the marketplace. Regions with no tradition of attracting visitors
can be transformed with the use of innovative strategies. Entrepreneurship pro-
vides many opportunities for innovation both in the formal and informal sectors.
The formal technology sector includes activities that are registered as technology
services such as web services. The informal technology sector is not ofcially
identifed as being a technology provider but rather exists in an informal man-
ner. Entrepreneurship involves creating novel products or services that have not
been identifed previously in the marketplace. These novel ideas are implemented
in a creative way. Innovation involves perceived new ideas. The idea might not
be new but its perception as being diferent makes it new in the current context.
Contemporary technology owes its origins to pioneering innovators that trans-
formed the industry.
Collaborative innovation provides a way for frms to tap into other frms’
resources (Feranita, Kotlar, & De Massis, 2017). This is useful in terms of gaining
additional knowledge and insight from other sources. Feranita et al. (2017: 138)
defne collaborative innovation as “a form of inter-frm relationship that involves
the exchange and sharing of resources such as fnancial capital, information,
 Technology entrepreneurship in Indonesia 85
knowledge and technology with external parties in order to achieve innovation”.
There is increased emphasis on collaboration due to frms realising they can-
not do everything themselves. This means that frms can leverage on others to
obtain the necessary support for innovation purposes. Collaborative innovation
involves embracing an open culture to the sharing of information. This is impor-
tant as obtaining information in a timely manner can infuence the success of an
innovation.
It is hard to determine what role institutions play in innovation. This is due to
innovation resulting from a number of diferent factors that produce new ideas.
Techno-economic innovations involve technology being used in a more efec-
tive way in order to promote economic efciency. Regulatory innovations are
defned as innovations that “transform explicit regulations and/or the ways they
are sanctioned” (Heiskala, 2007: 59). Increasingly more emphasis in society is
being placed on efciency with the move from a paper to online based system.
This means regulatory authorities have tried to introduce innovation in order to
make it easier to use services. This includes the use of self-service technology as
a form of regulatory and user innovation. Normative innovations are defned as
innovations that “challenge established value commitments and/or the way the
values are specifed into legitimate social norms” (Heiskala, 2007: 59). These
normative innovations can include dress standards or ways of behaving in society.
Increasingly changes in societal conduct are based on the increased usage of
technological innovation. Mobile phone technology has resulted in the introduc-
tion of video calls that have changed the nature of communication. This has led
to alterations in the way people interact, which is a social norm. Cultural innova-
tions are defned as innovations that “challenge the established ways to interpret
reality by transforming mental paradigms, cognitive frames and habits of inter-
pretations” (Heiskala, 2007: 59). This form of innovation is also largely based
around technological change and the way individuals perceive cultural change.
Open innovation is a type of innovation that has gained popularity because of
the increased interest in co-creation activities. Chesbrough (2003: 43) defned
open innovation as the process whereby “valuable ideas can come from inside or
outside the company and can go to market from inside or outside the company
as well”. This defnition stresses the free-fowing nature of innovation and how
it can be helpful to obtain the input from multiple stakeholders. In the past, it
was considered better to limit the amount of information about an innovation
that was shared with others. With the introduction of the internet and increased
online capabilities, the need to share information has increased.

Online communities
Increasingly online rather than physical communities are infuencing people’s
behaviour. The ease and quickness of communication online have further fuelled
the growth of online communication. Online communities are defned as “social
aggregations that emerge from the Net when enough people carry on those
public discussions long enough, with sufcient human feeling, to form webs of
86 Vanessa Ratten
personal relationships in cyberspace” (Rheingold, 1993: 7). With more people
having access to mobile communication, it is becoming easier to communicate
with others regardless of location. People like to form communities online as a
form of social support and to exchange information. There are other reasons
why the number of online communities has grown and this includes entertain-
ment value and recreation. Thus, people utilise online communities as a source of
self-discovery that leads to the accumulation of knowledge. This enhances inter-
personal connectivity.
Online environments enable groups to be formed in both a planned and adhoc
manner. This enables people to come together and form a community based on
a common interest. The need of individuals to belong to a community has moti-
vated them to join online formats. These communities act as a source of support
and help shape group members views of a topic. The connections that individuals
form online enables them to form connections. These connections are a valuable
source of knowledge and value. In an online community, individuals can transfer
knowledge and learn from others. This provides a sense of value co-creation and
enhances long-term goals.
New markets are being created all the time due to the emergence of difer-
ent products and solutions. Sprong, Driessen, Hillebrand and Molner (in press:
1) defne a market innovation as “purposive action by market stakeholders that
result in a distinctively new or altered form of market”. This has led to chang-
ing market structures and altered market behaviour. As a result, businesses have
had to change how they interact with their stakeholders. Market innovation is a
political and social process as it requires institutional change. Therefore, to create
a new market involves receiving the input of stakeholders in terms of resource
acquisition and exchange (Huarng & Yu, in press).

Customer entrepreneurship
In the increasingly connected digital world, customer entrepreneurship is becom-
ing more prevalent. Customer entrepreneurship is defned as “the entrepreneurial
activities of actors conventionally categorised as end-consumers or end-users in
ecosystems” (Park, Kim, Jeong, & Minshall, 2021: 96). This is altering the posi-
tion of customers on digital platforms from end-users to more active participants.
This is resulting in business model innovation as customers become more active
about pursuing innovation. Customers are normally viewed as target audiences
rather than innovators. This means traditionally customers are the buyers of
products or services rather than co-creators. This role has changed with custom-
ers being proactive entrepreneurs on digital platforms. Increasingly customers
are trading goods online with the goal of making a proft. This has led to goods
being sold online in advance then being resold in other online platforms. The
volume of this online trade is considerable and efects the international mar-
ket. Customer entrepreneurs are normally everyday people using platforms for
business activities. The platforms increasingly are digital based but they can also
be through traditional mechanisms such as bricks and mortar shops. Normally
 Technology entrepreneurship in Indonesia 87
the customer entrepreneurs operate their business as a side project and have
another main business. In order to maximise profts, customer entrepreneurs use
social media and other marketing activities. Customer entrepreneurs constantly
appraise their performance by evaluating the market. This involves focusing on
pricing adjustments and advertising strategies. When the market or demand is
shifting, customers can decrease prices. Due to the informal and friendship-based
nature of customer entrepreneurs, their market transactions tend to be small.
This leads to an emphasis on word of mouth or direct marketing for sales. Unlike
professional and full-time entrepreneurs, the commercial activities of customer
entrepreneurs tend to occur on an ad hoc basis. This makes the purchase deci-
sions based on access to the products.
Price is an important determinant of consumers decision to buy a product.
Consumers normally are more price sensitive with online purchases as they have
time to shop around. This makes it important for online stores to make it easy
to search for products. This will impact the degree of loyalty consumers have
towards a brand. Those with channel loyalty will repurchase items from their
preferred channels. This makes it important for online retailers to emphasise
customer loyalty through their websites. Technological literacy is defned as
“individual capabilities to use technology such as digital devices and software, in
various areas of life” (Park et al., 2021: 103). Some individuals have a higher level
of technological literacy than others due to their ability to integrate technology
into their lifestyle. This enables individuals to interact with technology particu-
larly that of a digital kind. Individuals need to trust that the technology is reliable
and safe. This means that they have confdence in the integrity and usefulness of
the technology.

Technology marketing
Marketing is a process that involves making then keeping promises to consum-
ers (Grönroos, 2006). This means that there is a sense of obligation inherent in
any form of marketing communication. Shaw (2012: 31) states “marketing cov-
ers an entire discipline that contains both micro (e.g. marketing management,
buyer behaviour and consumer psychology) and macro (e.g. industry, distribu-
tion channels and aggregate marketing system) perspectives”. Marketing strat-
egy involves planning for the future in terms of anticipating demand. Normally
whether this obligation has been met is determined by the perceptions of a con-
sumer. This means that there is some degree of subjectivity as to whether the
goals of a marketing campaign have been achieved. Marketing is an essential
part of any economy as it enables producers of goods to advertise their services.
The general perception of marketing has tended to be negative due to the large
amount of money businesses spend on marketing. This means that marketing is
sometimes stereotyped as an advantageous activity that biases large businesses
that have the fnancial resources to aford to do so. Moreover, marketers have
been stereotyped as salespeople that over exaggerate the usefulness of a product.
This has led to marketers being viewed as unauthentic. Whilst this stereotype has
88 Vanessa Ratten
changed with the advance of new marketing campaigns based on direct interac-
tion between buyer and seller, there is still some negative connotations.
The 4Ps of marketing involve product, price, promotion and place. In a tech-
nology context, the product means what actual goods or services are exchanged.
The price is also important due to some technology providers competing on
price whilst others being price inelastic. Promotion can occur in a variety of ways
including through social media, direct advertising or traditional marketing mech-
anisms such as word of mouth or print media.
Marketing is essentially an exchange process based on the perception of value.
This means that, when marketing occurs, it is the result of some form of exchange.
The exchange can be transactional in terms of a specifc time frame or of a contin-
ual nature. Increasingly relationships are being utilised in technology transactions
due to the need to include the input of many diferent stakeholders. Relationship
marketing is defned as “attracting, maintaining and-in-multi-service organisa-
tions- enhancing customer relationships” (Berry, 1983: 25). Relationship tech-
nology marketers develop segmentation strategies to suit diferent markets. This
makes technology marketing fundamentally about understanding the customers
in a business relationship then building strategies with them in order to maintain
the relationship. This means that marketing is a broad set of activities and processes
that facilitate communication about oferings. This communication can occur in
a direct or indirect way depending on the context. In order to enable the com-
munication, information about the oferings needs to be exchanged. The infor-
mation enables marketers to monitor marketing performance and to re-evaluate
actions, thereby generating new solutions that can further create more value.
There are a number of diferent types of marketing with new types emerging
constantly in the marketplace. Relationship marketing refers to strategies that
encourage loyalty to be built between the buyer and seller. Relationships are
essential to the long-term survival of a business and encourage long-term links.
In order to engage in relationship marketing, diferent types of tactics can be
used including behavioural advertising based on data analytics. This enables the
identifcation of specifc consumer segments that are then targeted more precisely
through marketing campaigns. This is useful in technology marketing, which
involves planning activities around satisfying organisational objectives. All forms
of technology marketing emphasise value creation due to the interaction between
buyer and seller being an important component of any marketing efort particu-
larly that involving innovation.

Cyber entrepreneurship
Entrepreneurial activity should be encouraged as it is an engine of growth and
indicator of economic competitiveness. Cyber entrepreneurship is a contempo-
rary phenomenon that has gained popularity due to the emphasis on information
technology communications. There is no universal defnition of cyber entrepre-
neurship due to the variety of contexts and environments in which it can occur.
Tajvidi and Tajvidi (in press: 4) defne cyber entrepreneurship as “a internet-based
 Technology entrepreneurship in Indonesia 89
business practice in which entrepreneurs attempt to establish their companies
via an internet platform”. New business ventures provide many benefts to an
economy including through creating job opportunities and tax revenues. Indi-
viduals are motivated due to the need for fnancial gain or to remain productive.
Technological advancements have led to societal changes and economic shifts.
This has led to the new economy being referred to as the knowledge, online or
digital economy (Tajvidi & Tajvidi, in press). The new economy is based on the
need for economic and social systems to be based on technological innovation.
This has led to increased customer interaction in online communities through
reviews and the sharing of information. As a result, frms have had to focus more
on social media as a marketing tool and way to keep engaged with customers.
Social media enables frms and customers to interact in a more direct and fre-
quent manner. This has led to customers sharing their opinions and expressing
their needs. Cyber entrepreneurship provides a way for new ideas to emerge in
the online environment. This new type of entrepreneurship is becoming popular
due to the need to integrate digital business activities into the global economic
environment.
Entrepreneurship can be broadly defned as turning innovative ideas into
business ventures. This means that entrepreneurship involves some form of
uncertainty in terms of outcome and risk. Entrepreneurs are a key input in the
production process of the global economy. This means that entrepreneurs equili-
brate supply and demand by focusing on market opportunities. Cyber entre-
preneurship is a leadership style as it involves an individual pursuing an idea.
This requires some level of determination and perseverance. Moreover, cyber
entrepreneurs emphasise the need for online business ventures that can achieve
proftable business growth.
Businesses are increasingly focusing on how to create innovative ideas in the
digital economy. This means that the online environment is fostering business
growth through identifying online information technology projects. Cyber entre-
preneurship occurs through the exchange of data in an electronic network. This
makes it important to utilise information technology for business transactions.
Cyber entrepreneurs rely on technology for their business activities. This is difer-
ent from traditional entrepreneurship that did not necessarily utilise cyberspace.
However, existing businesses can become cyber entrepreneurs by incorporating
cyberspace for extensions to their business activities.
Cyber entrepreneurship can range from low to high levels of digital tech-
nology innovation. In a low-digital technology context, the business idea is a
complement, addition or supplement to existing activities. This means its intro-
duction to the marketplace normally comes at a slower and more progressive
pace. Moderate forms of cyber entrepreneurship go a step further by emphasis-
ing digital products or services. Increasingly this is becoming the norm as more
businesses integrate digital components into their business activities. High lev-
els of digital technology involve entirely new business ventures based on digital
technology. This means that the business operates entirely through the digital
environment.
90 Vanessa Ratten
Cyber entrepreneurs need to have knowledge of information technology. This
means developing a digital business can be more complex than a traditional busi-
ness but it can be easier and faster to start a digital business. This is due to the low
cost of market entry and the less time-consuming process. To foster cyber entre-
preneurship, knowledge needs to be exchanged in order to create value. This
process can be accelerated by utilising digital collaborative tools that make the
sharing of information easier. Increasingly online communities are being utilised
as a source of information and knowledge. This provides a platform for cyber
entrepreneurs to access information about new ideas.

Conclusion
This chapter has discussed the role of technology entrepreneurship in Indonesia.
Due to the growth in the digital and knowledge economy, technology-based ven-
tures are being prioritised in the Indonesian economy. The way in which unicorns
such as Go-Jek have revolutionised the Indonesian economy were stated. This led
to an examination on technology innovation and cyber entrepreneurship. In the
future, it is expected that there will be further emphasis on technology innovation
in Indonesia.

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7 Cross-sectional study (period
2013–2016) of the factors
that identify entrepreneurship
in Indonesia Mercedes Barrachina Fernández et al.Cross-sectional study

Mercedes Barrachina Fernández, Maria

del Carmen Garcia Centeno and Carmen
Calderón Patier

Introduction
Entrepreneurship is of great importance in the global economy and is a hot topic
for interested public decision-makers due to its growing importance in economic
activity (Thurik, 2014). It is important to highlight that the relevance of entre-
preneurial business activity has quickened in recent decades, and the approach to
the economy has shifted from an “administered” approach to an “entrepreneur-
ial” focus according to diferent researchers (Audretsch & Thurik, 2001). Indo-
nesia is a developing country characterised by stable economic growth and with
an enriching socio-cultural diversity. The entrepreneurs are a fundamental part of
the economy and support the stabilisation of the country (Ratten, 2014). Indo-
nesia is the largest archipelago in the world, and it is composed of 5 major islands
and 30 smaller ones. In total, there are around 17,500 islands, and it is estimated
that one-third of them are inhabited (Adisoemarto, 2019). Statistics Indonesia
(2021) has reported that the country’s population has reached 270.20 million
in September 2020. According to data provided by the Indonesian Ministry of
Cooperatives and Small and medium-sized enterprises (SMEs), in 2018, only
3.1% of the population were entrepreneurs.
Indonesia is a republic with its capital in the city of Jakarta. Other important
cities of the country, especially with a high infuence in the country’s economy,
are Bogor, Depok, Tangerang, Bekasi and Bali. The country is rich in natural
resources such as oil, natural gas, coal, tin, copper or gold and, because of them,
it can be considered as one of the richest countries in the world. To understand
Indonesia main fgures (OECD, 2018; IMF, 2020), it is key to mention that
Indonesia had an unemployment rate of 8% in 2020, the infation rate in 2019
was 2.8%, the gross domestic product (GDP) per capita in 2020 was around
4000 dollars and almost 50% of the people is dependent on the service sector.
Moreover, it is important to highlight that less than 0.1% of the GDP is invested
on Research and Development (R&D) (in average, the Organisation for Eco-
nomic Co-operation and Development (OECD) countries invest 2.3% of the
GDP). Indonesia is a very diverse country with six ofcial religions (Statistics

DOI: 10.4324/9781003187769-7
 Cross-sectional study 93
Indonesia, 2021): Islam (which is the religion of around 87% of the population),
Protestantism (7.6% of the population), Catholicism (around 3% of the popula-
tion), Hinduism (including 1.75% of the population), Buddhism (nearly 0.8% of
the population) and fnally Confucianism (with around 0.03% of the population).
According to Arsana and Alibhai (2016), more than 90% of the companies in
Indonesia are Micro, Small & Medium Enterprises (MSME), and more than 60%
of the micro enterprises are led by women.
The Indonesian government has tried to encourage individuals to become
entrepreneurs. The Industry Minister declared in 2018 that Indonesia needed
4 million new entrepreneurs to help with increasing the economic growth rate.
Therefore, the Indonesian State Minister for Cooperatives and SMEs has per-
formed diferent activities with the purpose of encouraging people to become
entrepreneurs and accelerate the foundation of companies. The main objective
of those activities and resources is to provide tools for the businesses to be inde-
pendent, strong, competitive, self-developing and be a strategic point in the job
creation process.
The main goal of this study is to evaluate the characteristics of entrepreneurship
in Indonesia. The chapter is organised as follows. First, a literature review sup-
porting the research is provided. Then, the research methodology and data col-
lection have been highlighted along with the main results of this study, together
with the discussion. Finally, conclusions, as well as limitations and future lines of
research have been proposed.

Literature review
Small and medium-sized companies are key in projecting inclusive and sustain-
able growth, also considering factors such as social cohesion. More specifcally,
in OECD countries, these types of companies, also known as SMEs, represent
99% of companies, 60% of employment, and are the main drivers in some cities
and regions (OECD, 2019a). There are diferent studies in the literature evaluat-
ing the efect of the policies regarding entrepreneurship (Castaño, Méndez, &
Galindo, 2016). However, Raafaldini, Simatupang and Larso (2015) mentioned
that entrepreneurship policy in entrepreneurship research has not been widely
researched. This study highlights that, at the micro company level, the programs
are very focused on individuals, with the purpose of increasing the number of
startups businesses and also the number of entrepreneurs. Those programs are
usually focused on motivation, technical skills, marketing training, management
training and fnancial skill. However, at the macro company level, diferent pro-
grams have been implemented, and the focus of those programs was venture capi-
tal, entrepreneurship education and infrastructure. In recent years, the interest
in women entrepreneurship has increased in popularity due to the contribution
women entrepreneurship makes in the rural environment, incrementing local
capabilities and increasing rural economic growth (Tambunan, 2007). Educa-
tion is an important fact for entrepreneurship and according to OECD (2019b),
around 90% of the young men in Indonesia are employed no matter the level of
94 Mercedes Barrachina Fernández et al.
education, however, for young women, the situation is diferent as their employ-
ment rate is 30% higher having a tertiary education level (compared with the
women only having a secondary education level).
In the literature, diferent public databases have been identifed that focus on
entrepreneurship activity. One of the main ones is the Global Entrepreneurship
Monitor (GEM) database, which is the world’s most important observatory on
entrepreneurship. It started in 1999 and since then, it measures the entrepre-
neurial dynamics in more than 100 countries, thanks to a common methodology,
with which it evaluates characteristics, attitudes or motivations (Asociación RED
GEM España, 2019).
The mentioned database was created in September  1997 as a joint research
initiative between two exceptional institutions: Babson College (United States)
and London Business School (United Kingdom). The main purpose of this pro-
ject was to put eforts in the entrepreneurship area and create a database with
valid information to evaluate the relationship between the entrepreneurship and
the economic growth. Initially, the GEM focused on the G7 countries (Canada,
France, Germany, Italy, Japan, the United Kingdom and the United States) and
additionally three more countries were added, due to the origin of the selected
academics (Denmark, Finland and Israel) (Reynolds, 1999).
There are three characteristics that uniquely identify this database worldwide.
First, there is no other similar data source with valid information about entrepre-
neurship with so many countries as GEM. Second, information about any type of
entrepreneurship can be found in the created database. Third, all the information
gathered is very focused on the initial phases of the entrepreneurship process,
which is also known as “nascent entrepreneurship”.
The GEM provides a strong framework in which national governments can
develop a set of efective policies to improve entrepreneurship. The sources of
information that feed the GEM observatory (Bergmann, Mueller, & Schrettle,
2014; Asociación RED GEM España, 2019) are the following:

1 APS: Survey of the adult population. This survey is carried out on more
than 2,000 adult individuals (18–64 years) from the country analysed and
mainly analyses the business aspirations of the country’s population. It takes
place between April and July in all participating nations and regions. NES:
National Survey of Experts. This survey is carried out by a group of experts,
at least 36 business and academic experts from the country analysed, and
focuses on analysing the country’s institutional factors. Each participating
country or region selects a representative sample of experts in diferent felds:
fnancing, government policies, political programs, education, R&D trans-
fer, opening of the internal market and social regulations. These experts are
interviewed between the months of March and July through a questionnaire
designed by GEM.
2 Secondary sources: Every year the GEM project collects information,
from July to September, from diferent sources that provide information
 Cross-sectional study 95
on fundamental economic variables: economic development, demography,
labour market, innovation and competitiveness.

The two mentioned surveys are subjected to rigorous quality controls in rela-
tion to their translation and feld work in order to guarantee that the responses
obtained in all the participating countries are comparable.
Multiple articles have been found in the literature that analyse diferent aspects
of entrepreneurship based on the GEM database. According to the study per-
formed by Faghih, Bonyadi and Sarreshtehdari (2019), they proposed three new
indices with the aim of investigating the attitude and capacity of communications,
proposing a non-linear regression approach and delving into the relationship
between these indices. In addition, it develops a ranking list of countries, show-
ing that the entrepreneurial attitude dispersion index can improve the economic
categorisation of countries.
In the literature, there are diferent types of studies related to female entrepre-
neurship. For example, there are studies on the classifcation of specifc typologies
(Bruni, Gherardi, & Poggio, 2004), which identify the diferent profles (aimless,
success-oriented, strongly success-oriented, dualist, return workers, traditional-
ists, radicals) for women entrepreneurs. Others focus the analysis on evaluating
the relationship between female entrepreneurship and social and demographic
conditions (Tominc & Rebernik, 2004; O’Gorman & Terjesen, 2006; Verheul,
Van Stel, & Thurik, 2006; Noguera, Alvarez, & Urbano, 2013; Ćirec & Močnik,
2015). Other articles found are based on the characteristics of female entre-
preneurship due to their success or failure in entrepreneurial activity (Justo,
DeTienne,  & Sieger, 2015) or focused on fnding the diferences between the
entrepreneurial activity of men and women (Crespo, 2017). There are other arti-
cles that focus on showing the relationship between female entrepreneurship and
diferent variables, for example, with the Better Life Index (Ribes-Giner, Moya-
Clemente, Cervelló-Royo, & Perello-Marin, 2019) or the relationship between
female entrepreneurship and the Country Risk Score and the Glass Ceiling Index
(Ribes-Giner, Moya-Clemente, Cervelló-Royo, & Perello-Marin, 2018).
There are various studies related to the factors that afect entrepreneurship in
diferent countries of the world, for example, Iran (Mohammadi, 2018), Romania
(Dumitru, 2018) and Italy (Matricano & Sorrentino, 2018). There are authors
(Chaganti, 1986; Brush, 1992) who have centred their attention on management
aspects related to the phase the startup is in, reaching very interesting results, for
example, that female entrepreneurs manage their companies in a more fexible
way than men, women tend to avoid long-term decisions, their leadership style
focuses on involving and motivating employees and not evaluating results only
based on income. However, there are also studies that focus on analysing the rea-
sons why entrepreneurs leave their businesses (Justo & Detienne, 2015). Other
articles analyse the most notable diferences between male and female entrepre-
neurship, for example, identifying that businesses created by women tend to be
smaller and grow less than those with men as owners (Du Rietz & Henrekson,
96 Mercedes Barrachina Fernández et al.
2000). Specifcally for Indonesia, Anggadwita, Luturlean, Ramadani and Ratten
(2017) focused on exploring the socio-cultural environment on the entrepre-
neurial behaviour considering the involvement of women in the entrepreneurial
process in Indonesia.
According to the data provided annually by the GEM database (GEM, 2018),
and considering the most updated information, Indonesia has a Total early-stage
Entrepreneurial Activity (TEA) of 14.09 (as average), a higher value than Aus-
tralia (10.52) but lower than Thailand (19.68), for example. According to the
literature, one of the most relevant problems in Indonesian workers is related to
the education of the population. Only 9% of the employees are considering high
skilled resources and this could be an issue when innovating.

Data and methodology

This work aims to analyse the efect of diferent variables (social, perceptual, eco-
nomic) on female entrepreneurial activity in the period 2013–2016 in Indonesia.
Data from the GEM will be used for the years 2013–2016 at the individual level
for Indonesia. Table 7.1 shows the variables that have been considered in this work:
The analysis was performed with the open-source Anaconda, for working with
Python to implement the method selected. The analysis of the data was initiated
with a review of the available data, and an initial pre-processing was executed
for cleaning the data. The analysis used a logistic regression model since, the

Table 7.1 Description of variables

Variable Description Source

gender Gender: This variable will be fltered to match the GEM Database
female gender (value 1)
age Age of the respondent GEM Database
hhsize Number of members in household GEM Database
gemeduc Education level: 1 if secondary or higher education GEM Database
gemhhinc Respondent income: 1 if it is in the highest 33rd GEM Database
percentile
fearfail 1 if the respondent is afraid of failure GEM Database
suskill 1 if the respondent has confdence in his/her GEM Database
entrepreneurial skill
knowent 1 if the respondent personally knows someone who GEM Database
started a frm in the past two years
opport 1 if the respondent perceives good opportunities to GEM Database
start a business
nbgood 1 if starting a business is a desirable career choice GEM Database
nbmedia 1 if the respondent often see stories in the public GEM Database
media about successful new business
nbstatus 1 if the respondent considers that entrepreneurs GEM Database
have a high level of status and respect
busang 1 if the respondent has personally acted as a GEM Database
business angel in the past 3 years
 Cross-sectional study 97
dependent variable takes value 1 if it is decided to launch a new business and 0 in
the opposite case. Thus, with the estimated model, it will be analysed what factors
of the proposed ones afect the decision to act as an entrepreneur in Indonesia.
The total number of registers evaluated sums up 19.120, and, after cleaning the
data, it decreased to 18.518 registers.
The hypothesis formulated in this analysis are listed later:

1 The age has a negative infuence on the decision of becoming an entrepre-

neur in Indonesia.
2 Having a high level of education has a positive infuence when deciding to
become an entrepreneur in Indonesia.
3 The higher the salary of the individual the higher the propensity to become
an entrepreneur in Indonesia.
4 The fear to fail infuences negatively in the creation of a business in Indonesia.
5 Individuals with confdence in their abilities are more likely to act as entre-
preneurs in Indonesia.
6 Having a strong entrepreneur network is a positive factor when deciding to
start a business in Indonesia.
7 Perceiving good opportunities in the living area afects positively in the
decision of becoming an entrepreneur in Indonesia.
8 A positive perception of entrepreneurship as a career path infuences posi-
tively in the decision of becoming an entrepreneur in Indonesia.
9 Having a high level of respect for founders of businesses has a positive
impact in the decision of becoming an entrepreneur in Indonesia.
10 Being used to display business successful stories in the media afects posi-
tively in the decision of becoming an entrepreneur in Indonesia.
11 Being an informal investor has a positive infuence in the decision of becom-
ing an entrepreneur.
12 Being a woman afects negatively in the decision of founding a business in
Indonesia.
13 The smaller the size of the household, the higher the probability to become
an entrepreneur in Indonesia.

Results
This analysis was performed using the “liblinear” library in Python, which is the
one containing the logistic regression methods. The main results after the execu-
tion of the logistic regression model are displayed in Table 7.2.
Additionally, it is relevant to identify that in terms of Pseudo-R2, the values
obtained in the period analysed is 6.4%, in line with the value obtained in this
type of model in other similar works.
First, it is possible to conclude that for the analysed period, age (variable age)
has a negative and signifcant infuence on entrepreneurship in Indonesia, which
implies that the older the individual, the less likely to become entrepreneur, regard-
less of the economic situation of the country, confrming hypothesis 1 formulated.
98 Mercedes Barrachina Fernández et al.
Table 7.2 Results obtained from the logistic regression

Variable Coefcient St. deviation p-value

age −0.0290 0.0015 0.0000

gemeduc −0.3563 0.0404 0.0000
gemhhinc 0.1312 0.0446 0.0033
fearfail −0.5055 0.0405 0.0000
suskill 0.8022 0.0501 0.0000
knowent 0.3809 0.0478 0.0000
opport 0.5965 0.0435 0.0000
nbgoodc −0.1101 0.0450 0.0144
nbstatus −0.0486 0.0483 0.3140
nbmedia −0.0748 0.0476 0.1162
busang 0.4879 0.0869 0.0000
gender −0.3720 0.0345 0.0000
hhsize −0.17074 0.0122 0.0000

Regarding the level of education (gemeduc variable), the variable related to the
level of education is signifcant and negative which implies that the higher the
level of education the lower propensity to become an entrepreneur in Indonesia,
rejecting hypothesis 2.
The salary, represented with the gemhhinc variable, analyses the efect of the
respondent’s salary on their decision to act as an entrepreneur. The gemhhinc
variable takes the value 1, in case the respondent has a salary in the 33rd high-
est percentile. For Indonesia, this variable is signifcant and with a positive efect
confrming hypothesis 3.
Related to the fear of failure (fearfail), it is a signifcant variable with a nega-
tive efect in the decision of becoming an entrepreneur, confrming hypothesis 4.
Confdence in the own abilities, represented with variable suskill, afects signif-
cantly and positively in the decision of becoming an entrepreneur in Indonesia,
confrming hypothesis 5.
Having a strong network composed of other entrepreneurs is a signifcant and
positive variable when deciding to found a business, corroborating hypothesis 6.
The perception of good opportunities to start a business (opport) is obtained
to infuence positively to the decision of creating a company, supporting
hypothesis 7.
When deciding to start a business, an important consideration is the career
option, as it is an important step in someone’s professional career. In Indonesia,
contrary to what could be assumed, considering that entrepreneurship is a good
career option (nbgoodc), negatively afects the probability of becoming an entre-
preneur, rejecting hypothesis 8.
The experience acting in other businesses, as an informal investor (busang), is a
positive fact when deciding to become an entrepreneur in Indonesia, confrming
hypothesis 11.
In Indonesia, being a woman negatively infuences the decision of becoming
an entrepreneur (gender), supporting hypothesis 12.
 Cross-sectional study 99
Finally, related to the size of the household (hhsize), the higher the number of
members in the house, the lower probability to become an entrepreneur, con-
frming hypothesis 13.
Evaluating the values of the coefcients infuencing in the decision of becom-
ing an entrepreneur, the highest values are assigned to the confdence (suskill),
opportunities perception (opport) and having acted as an informal investor or
business angel (busang).

Discussion
The main objective is to determine what are the factors that have contributed or
not in entrepreneurship in Indonesia according to the economic situation, ana-
lysed between 2013 and 2016. In this work, the importance of entrepreneurship
has been exposed and its importance in the economy as well as the entrepreneur-
ship main facts in Indonesia. According to the model utilised, it is concluded that
the following variables are signifcant but with a negative infuence in the decision
of becoming an entrepreneur in Indonesia: age (age), level of education (geme-
duc), fear of failure (fearfail), considering entrepreneurship a good career option
(nbgoodc), being a woman (gender) and the household size (hhsize). The results
obtained are in line with other studies performed using similar variable fnding
that the fear to failure is having a negative impact when considering founding
a business (Wyrwich, Stuetzer,  & Sternberg, 2016). In the literature, the fact
of being a woman has also been studied, and, in other areas, such as in Europe
having similar results (Minniti, 2009; O’Gorman & Terjesen, 2006). Therefore,
this result is interesting to show the policymakers the areas in which the entre-
preneurship level could be improved, and, consequently, design and implement
measurements that could support and foster female entrepreneurship.
The age of an individual is another factor that has been widely studied in the
literature, concluding that it has a negative impact on becoming an entrepreneur
(Wennekers, 2010; O’Gorman & Terjesen, 2006). In the same line, this infor-
mation should be utilised to implement policies to help not only young entre-
preneurs but also senior-level entrepreneurs as they have, potentially, a stronger
background and experience, and this practice could be useful when founding a
business.
However, the signifcant variables that afect positively to the decision of creat-
ing a business are: having a good salary (gemhhinc), having confdence in the own
abilities (suskill), having a strong entrepreneur network (knowent) and perceive
opportunities to start a business in the living area (opport) and having experience
as a business angel (busang). Now, there is an increasing number of programs,
dedicated to connecting entrepreneurs and professionals. One of the most impor-
tant factors when deciding to create a new business in Indonesia is the network
contacts and their entrepreneur experiences. This could be used as a justifcation
for increasing the connections of the entrepreneurship networks by organising
national or regional events for associating and networking with other entrepre-
neurs in the same area. The programs for providing information of how to create
100 Mercedes Barrachina Fernández et al.
a business with basic information about fnancial resources, marketing strategies
and digital training are also very useful to build trust on the own’s abilities.

Conclusions
The main aim of this research was to identify the factors that characterise the
entrepreneurship in Indonesia, considering diferent types of variables, so that
policies can be articulated based on the entrepreneurship purposes. In this work,
the importance of entrepreneurship in the economy has been exposed, which
makes it extremely useful to know how it will evolve depending on the diferent
decisions made in other felds, especially to promote entrepreneurship in diferent
sectors, executing diferent economic and social policies. This analysis contributes
to the literature by extending the knowledge related to the factors that infu-
ence entrepreneurship in Indonesia. This information could be interesting for
policymakers to design policies to foster entrepreneurship between the diferent
population groups.
There are several limitations to the results of this study. This analysis is subject
to the limitations found during the execution, mainly related with the data avail-
able to be evaluated, as only information in the period 2013–2016 was feasible in
the GEM Database. Even though the initial idea was to consider the last 20 years,
the data from the GEM databases were not available for that period. Based on the
results obtained and considering that the topic of entrepreneurship is booming
due to its relationship with economic growth, for future research, it would be
interesting to extend this analysis for specifc groups of entrepreneurs. A possible
extension of this work would consist of evaluating the diferences between female
and male entrepreneurs in Indonesia or to identify the factors that infuence in
the decision of becoming an angel investor in Indonesia. Another interesting
research direction could be based on the diferent types of entrepreneurs identi-
fed in Indonesia, with the main purpose of identifying the main factors afect-
ing young entrepreneurs and senior-level entrepreneurs. Another potential future
study could be focused on comparing the entrepreneur’s factors in Indonesia
with the factors in other countries of the region with data available (e.g. Australia,
New Zealand or China).

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8 Rural entrepreneurship and social
innovation in Indonesia Vanessa RattenRural entrepreneurship

Vanessa Ratten

Introduction
Increasingly entrepreneurship research is emphasising the role of context. This
means that greater care is taken in understanding the role of rural areas in entre-
preneurial activity. Rural entrepreneurship needs to be understood in terms of
its historical and social role in business activity. The rural context infuences the
range of business activities that are available in a region. Therefore, rural areas
can provide benefts as well as disadvantages for entrepreneurs. In order for rural
entrepreneurs to survive and prosper, they need to be innovative. Fitz-Koch,
Norqvist, Carter and Hunter (2018: 130) state that “agriculture is amongst the
world’s largest sectors, employing over one billion people and accounting for
3% of global GDP”. This means that it is an important context from which to
study entrepreneurial behaviour. Moreover, there has been increased interaction
of agri-business activities into other sectors of the economy including through
tourism and education.
Although the practical importance of rural areas in the global economy is evi-
dent, mainstream entrepreneurship research has tended to neglect the agricul-
tural industry due to an emphasis on technology contexts. This is worrying as
there are many diferent ways the agricultural sector is entrepreneurial including
through the startup of new businesses and integration of technology innovation
into business activities. In addition, there has been an abundance of research
on the agricultural industry in the economics and sociology felds but less in an
entrepreneurship context. This has meant most of the existing studies on agricul-
tural entrepreneurship have their roots in other felds.
Stathopoulou, Psaltopoulos and Skuras (2004: 404) state that “rurality defnes
a territorially specifc entrepreneurial milieu with distinct physical, social and
economic characteristics”. This means that rural areas are characterised by the
landscape and environmental context that diferentiates them from urban areas.
The natural resources found in a rural area often provides an opportunity for spe-
cifc types of entrepreneurship to occur, namely around farming and agriculture.
However, there can be a diference amongst rural areas based on their geographic
proximity to other areas. This means that there are more remote rural areas that
are difcult to enter because of the terrain. Often more remote rural areas are less

DOI: 10.4324/9781003187769-8
104 Vanessa Ratten
populated and have a high dependence on farming. This results in infrastructural
inadequacies that can make it hard to transform into more value-added activities.
The under-development in rural areas makes it ripe for entrepreneurs. Research
into rural entrepreneurship is still sparse and lacks the substantial number of pub-
lications prevalent in other entrepreneurship research felds. This means research
into the efects and dynamics of rural entrepreneurship can shed light on new
entrepreneurial practices. The objective of this chapter is to present an integrated
framework on rural entrepreneurship taking into account social innovations. To
do this, the chapter will review and discuss the contextual issues associated with
rural, agricultural and farm entrepreneurship, thereby arguing that the process of
rural entrepreneurship is not very diferent from that found in other contexts but
rather depends on environmental factors.

Agricultural entrepreneurship
Agricultural entrepreneurship is synonymous with the rural context and espe-
cially relates to farming activities. This means, in its broadest sense, agricultural
entrepreneurship refers to the cultivation of rural products for economic gain.
This includes crop plants or livestock products that are traded in the marketplace.
Agricultural entrepreneurship is also referred to as farm or rural entrepreneur-
ship. Whilst all forms of entrepreneurship have a spatial nature in terms of being
location-specifc, agricultural entrepreneurship requires a rural environment. This
involves using the natural environment for farming pursuits. Agricultural activi-
ties have a positive impact on regions as they provide fnancial income, food secu-
rity and alleviate poverty. Ataei, Karimi, Ghadermarzi and Norovzi (2020: 186)
defne a SME as “a business that recruits 150 or fewer people and possesses no
integration with a public limited company”. Small and medium-sized enterprises
(SMEs) are a large component of the rural sector. They play a signifcant role in
the use of entrepreneurship in agricultural businesses.
Remote areas including mountainous and less favoured areas are prone to
economic inefciencies. This means, unlike city and urban areas, there is often
difculties in gaining access to these regions for entrepreneurial activity. The
high dependence on farming means there is a reliance on agriculture. This
leads to a fragile socio-economic environment that is reliant on weather and
soil terrain for farming activity (Brouder, 2012). Some rural areas are experi-
encing a new infow of entrepreneurs that have relocated to these areas because
of lifestyle factors. Entrepreneurs are also attracted to rural areas because of
their lower cost of living and abundance of natural resources. This means that
there is a prospect of a better standard of living. In addition, due to the Covid-
19 crisis, more people are working from home, which means they have the
ability to live in rural locations. Many individuals are unable or unwilling to
leave rural areas because of their family or social connections. This means that
there is a need to fnd non-farm activities that can support farming activi-
ties. The increased diversity in income means that there is more stability and
growth in rural areas.
 Rural entrepreneurship 105
Rural entrepreneurs are characterised by their independent nature and risk-
taking behaviour. This means that they emphasise achievement in their business
dealings by pursuing opportunities (Cassel  & Pashkevich, 2014). Agricultural
innovation is a way to promote growth in rural areas. Innovation refers to an
attempt to make an idea a business reality. This includes ideas about new products
that can be put into practice (Booyens  & Rogerson, 2017). In an agricultural
setting, innovation can include changes in technology or ecological systems that
result in increased performance gains. Innovation does not occur in a vacuum as
it requires human interaction.

Farm entrepreneurship
Farmers are trying to reduce their risks by diversifying into other business activi-
ties. This means moving away from purely traditional farming activities to include
other business ventures outside farms. This move is a strategic way farmers can
maintain existing revenue sources whilst growing their businesses. The concept
of portfolio management is a way to describe farm entrepreneurs having multi-
ple concurrent business ventures. To exploit changes in the rural environment,
farmers have focused on entrepreneurship as a way of providing business devel-
opment. Entrepreneurship is generally concerned with the pursuit of innovative
business opportunities. This means that it is important to understand why, when
and how entrepreneurship occurs in an agricultural context. Identifying entrepre-
neurial opportunities in a rural context is a way to increased fnancial revenue and
to transform existing activity.
There are a variety of diferent types of farm entrepreneurs from traditional
growers to social farmers (De Lauwere, 2005). Traditional growers focus on spe-
cialised crops that have been popular in the marketplace for a long time. This
means striving for more economies of scale in their farming activities. Social farm-
ers try to encourage social responsibility in their products. This means emphasis-
ing community benefts of farms in terms of having an enhanced rural landscape.
Farmers who have been in an area for a long time are normally characterised by
fnancial conservatism. This usually means they have less of a growth orienta-
tion compared to newer farmers. Agricultural innovation is infuenced by farm
location and landscape patterns. This means farms that are rurally attractive and
close to urban areas can also be tourist attractions. Rural entrepreneurship is
instrumental in afecting the economic development of other sectors. This occurs
by enhancing the productivity of a region and improving the quality of life in a
rural area.
Historically farmers could rely on the constant demand from the marketplace
for their products. This has changed due to shifting demands, new production
methods and increased internationalisation of the agricultural industry. As a
result, farmers now operate in a highly competitive marketplace. Moreover, in
the past, there were price subsidies, tarif protection and regulatory restrictions
on farming. This has changed with the shift to an open marketplace. Research
on farm entrepreneurship is sparse despite the economic efects of farming. An
106 Vanessa Ratten
entrepreneurial culture in farming can lead to greater efciencies. This means that
there are a number of competing strategies that farmers can implement such as
increasing production or focusing on a new market. In addition, farmers can inte-
grate forward or backward into the value chain by producing necessary equip-
ment or selling produce. Moreover, there is pressure on farmers to move up the
value chain in order to access more proftable activities. This enables them to be
portfolio entrepreneurs by taking on multiple business projects at the same time.
Portfolio entrepreneurship in farming is needed due to changes in consumer
demands such as wanting a continuous availability of products and pesticide-free
produce have infuenced new farming activities. The growing power of supermar-
kets has changed the industry dynamics. This has resulted in demand for lower
prices whilst increasing quality issues.
Farm entrepreneurs need to have fve main skills: professional, management,
opportunity, strategic and cooperation/networking (De Wolf, McElwee,  &
Schoorlemmer, 2007). Professional skills involve specifc knowledge that takes
time to learn (Brooker & Joppe, 2014). In the farming context, this can include
production methods and technical information. Management skills involve knowl-
edge about leadership and people management skills. This is important to farmers
in terms of managing their workforce. Opportunity skills involve the ability to
foresee change and act on it accordingly (Ferreira, Fernandes, & Ratten, 2017).
This is useful in the changing competitive marketplace that is focused on innova-
tion. Strategic skills mean developing and acting upon plans. This is needed in
terms of thinking about the future and how farming will change. Cooperation/
networking skills involve the ability to interact and form relationships with others
(Hjalager, 2009). Farmers need to do this in order to build bridges with others
who can then help them in their business ventures.
Farmers utilise portfolio entrepreneurship as a risk management strategy in
order to reduce risks associated with one business activity. Entrepreneurs may
decide to establish a new business that is concurrent with their existing businesses
(Fierro, Noble, Hatem, & Balunywa, 2018). The reason for this can be due to
a need to circumvent existing structures or to diversify business practices. Fierro
et al. (2018: 732) defne portfolio entrepreneurship as “the creation and man-
agement of multiple entrepreneurial ventures in a concurrent manner”. Portfolio
entrepreneurship normally is the result of changing market conditions requiring
new business practices. As startups progress in the marketplace, decisions can
then be made as to divest or continue with the business. Portfolio entrepreneurs
can have an interest in multiple projects, thereby enabling them to diversify their
business.
Entrepreneurs are increasingly owning and managing several businesses (Kahn,
2018). This is referred to as serial entrepreneurship and is defned as when an
“entrepreneur successively creates and manages new entrepreneurial ventures one
at a time” (Fierro et  al., 2018: 732). This enables them to use their business
experiences in other contexts. Serial entrepreneurship is common in the farming
sector due to the need to obtain income from multiple sources. Farmers need to
be entrepreneurial in order to obtain new skills. Agricultural production is one
 Rural entrepreneurship 107
of the most important factors in rural economies. Tourism in a farm setting is
referred to as agrotourism and is an example of serial entrepreneurship based on
a portfolio approach (McKercher & Du Cros, 2003). Often agrotourism incor-
porates a social element in terms of bridging societal change with innovative
activities.

Social innovation in agriculture

A broad defnition of social innovation is some form of innovation that is social
in terms of usage (Lee, Spanjol  & Sun, 2019). This can include agrotourism
innovation that has a social purpose or utilises social ideas. Individuals are moti-
vated to be social innovators due to observing or experiencing hardship (Avelino,
Dumitru, Cipolla, Kunze, & Wittmayer, 2020). This empathy makes them want
to produce innovations that can solve societal problems. By responding to prob-
lems with care and compassion then the problem can be solved in a more humane
way. There is much learning that goes into producing a social innovation as the
emphasis is on positive change (Marques, Morgan, & Richardson, 2018). This
means social innovation results from an exploration of possibilities by considering
diferent actions and which ones might be more appropriate (Castro-Arce & Van-
clay, 2020). To do this can be difcult due to decisions being made that weigh up
costs with benefts. As there are always trade-ofs being made when developing
a social innovation, it is important to consider the likely impact of the change.
The idea of social innovation is premised on a world based on cooperation
and change (Potts  & Ratten, 2016). This means social rights such as equality
and sustainability are encouraged. Once a social innovation has been developed,
it requires its adoption by members of society (Edwards-Schachter  & Wallace,
2017). Social innovation is hard to measure as it is based on perceptions. This
means more readily available measures such as patents and R&D spending have
been used as proxy for innovation (Stamboulis & Skayannis, 2003).
Social innovation is not a new concept as it has been in existence for some time
(Batle, Orfla, & Moon, 2018). Although the way social innovation is developed
in society has changed due to increased levels of globalisation and technology.
In the past, innovation that had a social component was prevalent in society but
assumed as a normal part of the economy (Ratten, 2011). It was used as a way
to help those in need but due to the rise of technology-based innovations it was
often overlooked. Social innovation as a term is so often used that its original
conceptualisation in a tourism context can be forgotten (Ratten, Ferreira, & Fer-
nandes, 2017). Initially, social innovation referred to change of a business nature
but has since become ubiquitous with anything altering societal conduct. This
means that social innovation is a victim of its own popularity. Social innovation
involves new practices to emerge in a social context (Drucker, 1987). This ena-
bles intentional action to develop around a targeted topic.
Social innovation involves an initiative that changes a social system (Ratten,
2017). This means the existing products or processes are altered in a way that
produces a social gain. Social innovation as a concept can be vague due to the way
108 Vanessa Ratten
it is used in society (Neumeier, 2017). Some view it as the study of non-proft
activity that is innovative in nature. Although it does not have to be non-proft
based and can be proft orientated in nature. This occurs when organisations see
a market opportunity to produce products that have a concurrent social purpose.
Increasingly social goals are viewed by organisations as being necessary in today’s
global environment that emphasises social equality (Heiscala, 2007).
Typically, innovation has been considered more of a business function so the
introduction of a social element to innovation acknowledges the need to think
about societal consequences. When a social innovation occurs, the existing rou-
tines or beliefs are changed. This produces a broader societal impact that has
fow-on efects. Social innovation is a dynamic process that requires the recogni-
tion of an opportunity then a resulting action (Pol & Ville, 2009). The ability
to produce social innovations enables vulnerable populations to be considered.
Social systems are complex as they are based on interaction amongst a group of
entities in society. There are multiple interchangeable elements within a social
system that enable procedures to occur.
Social innovation involves deriving new ideas that meet social goals (Oeij, Van
der Torre, Vaas, & Dhondt, 2019). This means creatively thinking about problems
occurring in society then producing innovative ideas to solve them. Social innova-
tion results from a process of change that produces new ways of thinking. This
means that social innovation is an essential part of society as it enables a focus on
the collective good. Due to increased levels of inequality in society, social innova-
tion is becoming more important. Moreover, societal issues such as global warm-
ing and poverty mean that social innovations are needed. Therefore, the advantage
of social innovation is that it enables unthinkable possibilities to emerge.
Social innovation can range in design from a technologically advanced idea to a
more incremental hands-on approach. Small changes that are based on interactive
steps are referred to as incremental innovation. This type of innovation is impor-
tant as it produces continual change. Not all forms of social innovation need to
result in monumental change as slight alterations can produce good results. This
means that it is important to think about social innovation as enhancing exist-
ing systems in order to produce more social gain. More substantial changes to
society that occur as a result of social innovation are referred to as radical innova-
tions. Due to the major changes that result from radical innovation, they are less
common in society. This means that radical innovations are less likely to occur
in society as they are uncommon, they still do occur but on a less frequent basis.
Social innovation can occur in a planned way in terms of it being considered
based on a step-by-step process (Rao-Nicholson, Vorley,  & Khan, 2017). This
approach is widely used by social innovators who have specifc ideas about what
kind of help is needed. Although taking a planned approach does not always work
well as sometimes serendipity plays a part in the development of an innovation.
This means that, by chance, encounters or discoveries are an important compo-
nent of social innovation. In addition, as many forms of social innovation require
a stakeholder perspective, it is right to assume that feedback will help move an
idea forward (Ziegler, 2017).
 Rural entrepreneurship 109
Social innovation tries to attain better outcomes for those at the periphery of
society. This means replacing older practices with more equal and progressive
practices. This can involve introducing new procedures that difer from the past
but produce better results. To do this, collective action is needed by govern-
ment, business and individuals in order to produce the change. Social innovation
does not necessarily align with economic rationality as it considers social needs
as being most important. Although economic and social goals do not need to be
separated and can work in tandem, social innovation involves a new confguration
of social practices in order to produce social change. This means answering needs
of individuals who are promoted by societal conditions.

Need for social innovation in the agricultural sector

Social innovation represents an important addition to agriculture and rural entre-
preneurship studies as it stresses the social nature of innovation. Whilst the term
‘innovation’ tends to imply a business result in the form of increased proftability
or additional market share, there are some forms of innovation that have a social
nature. This means the reason for their introduction into the marketplace is to
solve a social problem. Due to the emphasis on a free market economy in many
regions of the world, there has been decreased levels of government intervention.
This has resulted in a need for social innovators to address inequalities not being
solved by government policy. Social innovation thereby acts as a critical feature
of any economy interested in the well-being of its citizens. Moreover, due to
inequalities between developed and developing countries, social innovation acts
as a way to increase living standards. The global economy emphasises innovation
as a way to increase not only competitiveness but also wealth creation. This has
led to innovation being seen as a solution to global problems that have not yet
been solved.
Social innovation is a type of innovation that refers to improvements made
to increase living standards. It is the same as traditional forms of innovation in
terms of creating new products or processes but goes a step further in combining
a social need. Societal impacts are being emphasised more due to the realisation
that the world needs to consider issues such as sustainability in order to preserve
and improve living standards. Social innovation can be considered as a driver
of institutional change in terms of moving towards a more progressive society.
This means focusing on humanity and the collective good rather than pure proft
motives. Innovation typically has an economic motivation but it can also occur
based on cultural conditions. When culture is considered part of the reason for an
innovation then it is likely to be termed ‘social innovation’. Innovation generally
involves putting into action ideas about how to improve something for economic
reasons.
The main principle of social innovation is that the collective good needs to
be prioritised instead of individual gain. Mutual help in terms of cooperatives
and philanthropic business models can lead to societal gain. The pace of social
innovation is expected to accelerate due to the need for fnd solutions to global
110 Vanessa Ratten
problems. Social innovations are primarily difused through rural enterprises that
have a social objective in addition to fnancial goals. This means that some rural
enterprises are motivated by a need to help others that are less fortunate. There
are more social innovations that have moved from being niche business entities
to mainstream business models. This includes websites such as Wikipedia that was
established with the goal of providing free information regardless of income level.
The Wikipedia business model is based on volunteers providing updated entries
on topics of interest. In addition, microfnance and crowdfunding fnance models
have risen with the increased interest globally about funding social projects. This
means that due to the internet more information about social projects that need
fnance or help are available online.
Ideas for social innovation are generated from a number of diferent sources.
This includes obvious needs in a community such as homelessness. Other ideas
derive from less obvious sources such as racial inequality. Moulaert, Martinelli,
Swyngedouw and Gonzalez (2005) suggest that the main dimensions of social
innovation are meeting an unmet need, changing social relations and empow-
ering individuals. Satisfying human needs can take a variety of diferent forms.
Increasing the lack of access to certain services from clean drinking water to
afordable internet services is becoming important.
Due to global challenges in the area of social policies, more interest in how to
use innovation to solve social inequalities has emerged. Social innovation tries
to achieve change for the collective good of society. This means doing good
through investing in social innovation principles. Innovation means change but
this change does not necessarily produce good or bad results. Social innovation is
a purposeful form of change as it gives a sense of direction to innovative action.
Thus, social innovation involves developing then deploying solutions to solve
social problems. This means investing in solutions to social issues that can include
environmental and sustainability concerns. These solutions often need the sup-
port of stakeholders who when working together for a collective goal can pro-
duce a change.
Social innovation can be evaluated in terms of achieving set outcomes. This
includes activities that are part of an action plan designed to reduce distress in
society. Social value refers to non-fnancial impacts and interventions that result
in better living standards. This means that they are hard to quantify due to their
social nature. Social change is a process that results in alterations in societal con-
duct. These changes are not necessarily desirable by all but result in the overall
quality of life for most being improved.
Social innovation is a term that normally refers to change that has a positive
efect on society. The emphasis on the word social can mean that it has a non-
proft or inclusive nature. Social innovation plays an important role in the econ-
omy and society due to the fow-on efects it produces. This is due to it creating
a capacity for action that leads to increased living or working conditions. Social
innovation creates new capacities for action by focusing on societal problems.
In society, there are many vexing social problems and unmet social needs. This
makes it important for rural enterprises to move beyond traditional proft motives
 Rural entrepreneurship 111
to also incorporate social responsibility metrics. This will enable rural businesses
to undertake both business and social activities. The private sector plays a key role
in changing entrenched social issues in society. They can do this by strategically
investing in priority areas that help address key problems. To be a social innova-
tor, companies need to utilise cross-sector partnerships that occur when business,
government and other entities collaborate on a project. In order to have a good
cross-sector partnership, both private and public entities need to collaborate.
This will enable a clear business and social agenda to emerge that serves multiple
purposes. A successful partnership will also involve partners that are committed
to social change and have a long-term commitment.
Social innovators need to have an ability to engage with multiple stakeholders
such as customers, competitors and regulators. This ability enables them to pro-
duce ideas that can then result in societal change. To encourage social innovation,
there is a focus on creating hybrid solutions that meet business and social goals.
This means encouraging rural businesses not only to have a central for-proft
purpose but also to engage in social issues. Social movements in the form of
beliefs and opinions have infuenced the process of social innovation. Increasingly
consumers are prioritising social issues such as climate change and recycling in
their purchase decisions. This is then creating a fow-on efect by infuencing frm
behaviour.

Conclusion
This chapter has focused on the importance of the agricultural sector in Indone-
sia, thereby focusing on the role rural industries play in terms of growth and com-
petitiveness. It is important that more emphasis is placed on the way farmers are
entrepreneurial and contribute to Indonesia’s economic development. This means
discussing the role of social innovation in farming and rural entrepreneurship.

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9 Indonesian entrepreneurship Vanessa RattenFuture directions

Future directions
Vanessa Ratten

Introduction
Research on Indonesian entrepreneurship is under-represented in the literature
despite its cultural signifcance and impact on economic growth. The encourag-
ing news is that this is changing with an increased focus on the Indonesian econ-
omy in international business afairs. Therefore, it is necessary to build research
on Indonesian entrepreneurship by providing a deeper understanding of entre-
preneurship as experienced by those engaged in this activity. Western theories are
dominant in entrepreneurship research, so new cultural and national contexts are
needed in order to facilitate theoretical developments.
In the Indonesian entrepreneurship feld, there is an expanding volume of inter-
est from academic researchers, government policy and program developers, prac-
titioners, the business community and leaders in entrepreneurship. This means
that Indonesian entrepreneurship should emerge as one of the fastest growing
felds in entrepreneurship studies. There is a scarcity of comparative studies on
Indonesian entrepreneurship particularly studies comparing Indonesian and non-
Indonesian approaches. Thus, this book is motivated by the desire to ofer fresh
insights into the entrepreneurship feld by focusing on the Indonesian context.
This will provide a voice for those interested in Indonesia and build a community
of scholars around Indonesian entrepreneurship.
The phenomenon of Indonesian entrepreneurship is well presented in practice
but less so in an academic sense. This is the result of the entrepreneurial envi-
ronment in Indonesia rapidly evolving due to continued socio-cultural change.
There is recognition in Indonesia about the need for entrepreneurship not only
to increase economic growth rates but also to remedy systemic problems in soci-
ety. This includes reducing inequality and poverty levels. This book has provided
novel insights into a range of emerging topics in an Indonesian context. Recently,
there has been a signifcant investment in Indonesia in entrepreneurial ecosys-
tems, which has meant that entrepreneurship scholars are embracing a more con-
textualised understanding of entrepreneurship.
The amount of research on Indonesia is expected to expand in the future. The
future of Indonesian-focused research is bright and full of opportunities. Indone-
sian entrepreneurship research can contribute to the current and future business

DOI: 10.4324/9781003187769-9
 Future directions 115
environment. The aim of this chapter is to create a dynamic and continuous plat-
form to discuss Indonesian entrepreneurship research. This chapter reviews the
existing literature on Indonesian entrepreneurship, including suggestions about
the future growth of interest in this topic. Therefore, this chapter will lay the
foundation for the contribution of this book to entrepreneurship literature.

Indonesia
Indonesia is a country located in Southeast Asia. It is ofcially called the Republic
of Indonesia since gaining its independence. It is an archipelago comprised of a
number of islands. Indonesia is the world’s largest island country as it includes
a large number of islands of various sizes. The largest island is Java, on which
the capital Jakarta is located. The unifying features of Indonesia include a com-
mon language, history and economic interests. Indonesia is the only Association
of Southeast Asian Nations (ASEAN) member in the G20. Indonesia is already
a global player, but its position is expected to rise in the future. This is due
to the young population and increasingly technological savvy culture. Indonesia
is a geopolitical leader within Southeast Asia and its close proximity to other
emerging economies impacts business relationships in the region. Indonesia is
increasingly investing in education particularly of an entrepreneurial nature. This
will further increase the entrepreneurial potential of the country. Indonesia has
a democratic culture with high numbers of the overall population voting in elec-
tions. The six ofcial religions in Indonesia include Buddhism, Catholicism, Con-
fucianism, Hinduism, Islam and Protestantism although there are many other
religions practised in the country. This is due to Indonesia being an ethnically
diverse and multi-faith country.
The islands comprising Indonesia are spread through an area of land between
Australia and Asia. Indonesia was granted independence from its previous Dutch
rule in 1949 and is currently the largest economy in Southeast Asia with a strong
growth rate. Indonesia is comprised of a number of distinct ethnic groups. In
Indonesia, the saying ‘tak kenal maka tak sayang’ means that if we do not know
each other we do not care about each other. Thus, there is an emphasis on inter-
personal relationships to build connections that then lead to business ventures
being produced. This means that knowing others can facilitate knowledge shar-
ing and information dissemination. The entrepreneurship literature has focused
on China and India as emerging economies whilst overlooking Indonesia. There-
fore, the entrepreneurship spotlight needs to shift to focus more on Indonesia. In
order to facilitate more entrepreneurship, there are structural changes still needed
in Indonesia.

Entrepreneurship in Indonesia
Entrepreneurship in Indonesia is dynamic and constantly changing. The past dec-
ade has witnessed a rise in interest on entrepreneurship. The popular enthusiasm
is due to increased international focus on entrepreneurship and its contribution
116 Vanessa Ratten
to economic growth. Indonesian entrepreneurship builds on the existing research
on emerging economy entrepreneurship but focuses on a country context,
thereby making a critical contribution to the broad entrepreneurship literature.
Indonesian-specifc research on entrepreneurship enables researchers to incorpo-
rate cultural, historical, political and religious contexts, thereby extending and
revising theories by considering the country context. Most of the entrepreneur-
ship research is based on a North American or European perspective (Cavallo,
Ghezzi, & Sanasi, in press). This means that our understanding of entrepreneur-
ship is reliant on the cultural conditions apparent in developed countries. Whilst
this is changing, there is still a substantial gap of literature focusing on emerging
economy contexts like Indonesia. Given the unique cultural and economic con-
text of Indonesia, it is timely that this book focuses specifcally on Indonesian
entrepreneurship.
Indonesia is amongst the world’s largest and fastest growing economies. The
unique nature of entrepreneurship in Indonesia ofers the potential to bring new
insights. The economic impact of Indonesia is expanding due to its geopolitical
role and rising middle class. Indonesia has a rich cultural history that infuences
the way entrepreneurship is conducted. The liberalisation of market conditions in
Indonesia has kick-started an ambitious emphasis on entrepreneurship. This has
meant the adoption of market principles existing in other countries and improved
working conditions. Indonesia represents an attractive market destination for
individual investors and international frms. This is evident with recent statistics
highlighting the growth of emerging markets in the global economy. For exam-
ple, Cavusgil (2021: 1) states “emerging market economies accounted for only
about 30 percent of world GDP in 1990, but now make up some 42 percent of
world’s GDP”. The importance of entrepreneurship in Indonesia stems beyond
the confnes of a single country but extends to other countries. This means that
the economies surrounding Indonesia in Southeast Asia can beneft from the
entrepreneurial activity occurring in Indonesia. Moreover, the Indonesian dias-
pora that lives in other countries can also contribute to entrepreneurial activity.
Thus, the Indonesian economy has both a direct and indirect efect on other
economies. Indonesia has opened up its economy to international competition.
As part of this growth, international marketing has been emphasised due to the
way it can stimulate the economy.
Indonesia has much potential in terms of the opportunities and growth evident
in a region. Some markets will be more conducive than other markets due to their
favourable conditions. This makes it important to identify the most appropriate
markets for a frm given their growth strategy. This process needs to consider tim-
ing issues in terms of the number of consumers and suitability of the market for
a frm’s product. Moreover, the potential of a market can be impacted by other
environmental factors such as economic, political and social conditions (Jones,
Ratten, Klapper, & Fayolle, 2019). This makes it useful to monitor international
markets to see if conditions are changing or remaining the same.
In order to develop an entrepreneurial culture, it is important to focus on
learning (Jones, Ratten, & Hayduk, 2020). This is due to entrepreneurship being
 Future directions 117
fundamentally a behavioural process based on social interactions. Individuals
constantly interact with others that then result in new knowledge being acquired.
Based on this knowledge, business ventures are then started that fll a gap in the
market.

Entrepreneurship
The amount of entrepreneurship occurring in Indonesia continues to rise. Entre-
preneurs tend to have an open mindset that helps them engage in new ideas (Rat-
ten, 2020a). This openness is evident in their mental attitude that enables them
to see new opportunities in the marketplace. Entrepreneurs are also conscientious
in the way they pursue new ideas. This enables them to focus on the goals that
are relevant to their business ventures. Zhao, Ritchie and Echtner (2011: 1571)
state that the essence of entrepreneurship is “the initiation of change through
creativity or innovation that usually bears risk”. This means within any type of
entrepreneurship is a sense of creativity, innovation and risk. The creativity means
it is a new way of looking at things that has previously not been considered. This
can occur by introducing fresh insights that pave the way for future change. Inno-
vation involves doing something in a new way, thereby altering existing practices
(Mendoza-Silva, in press). Risk means there is some uncertainty as to what the
action will produce. This includes unknown outcomes in terms of market readi-
ness and adoption levels. Entrepreneurs discover opportunities before others
in the marketplace. To detect and act upon opportunities takes time and skills.
Entrepreneurs do this by seeing value in market gaps and then seizing the oppor-
tunity (Ratten, 2020b).
Entrepreneurs coordinate resources by taking initiative to turn ideas into a
business reality. Entrepreneurs are normally individuals who start a business
although this requirement has evolved to include those involved in the process
(Ratten & Usmanij, 2020). This means that entrepreneurs are alert to opportuni-
ties that are evident in the marketplace. Entrepreneurship involves pursuing an
idea by focusing on attracting then using resources. Thus, entrepreneurship is
a fuid concept that changes over time (Ratten & Jones, 2018). Initially, entre-
preneurship is about acquiring the necessary resources to make an idea a reality
but once the business has been established it can then be about re-energising or
building the business.
Entrepreneurs have a high level of self-efcacy in terms of believing that they
can perform a certain task (Ratten & Jones, 2020). This means that, when they
come across an innovative idea, they can then respond in a proactive and positive
way. Lortie, Cox and Sproul (in press) suggest that there are three main themes
regarding how a frm becomes entrepreneurial. Firstly, frms can be entrepreneur-
ial because of their status or due to the personality of the individual running the
frm. This means that technology frms are more likely to be classifed as entre-
preneurial due to the innovative nature of the information, communications and
technology industry (Tavares, Santos, Tavares, & Ratten, 2020). A frm might
in reality not be entrepreneurial but rather be perceived as being entrepreneurial
118 Vanessa Ratten
due to their association with a certain industry. As a result, there are many stereo-
types about entrepreneurial frms regarding their business structure. In addition,
individuals who are self-starters are perceived as being entrepreneurial due to
their quick thinking and ability to start a business.
Secondly, entrepreneurial frms are considered as those that are able to pursue
market gaps. This means identifying business opportunities then exploiting them
for fnancial gain. Not all frms are able to act on business opportunities, so an
entrepreneurial frm can be diferentiated from other frms by their timeliness and
capacity for change. Thirdly, entrepreneurial frms perform well in the market-
place. This means that they are able to grow and increase their revenue based on
pursuing new growth performance. Performance does not necessarily have to be
through fnancial gain as it can include learning, innovation and social or phil-
anthropic goals. It can be easier to evaluate entrepreneurial frms based on their
level of competitive diferentiation (Lortie et al., in press). This means that entre-
preneurial frms can generally be viewed as frms that focus on their uniqueness
in the marketplace. This uniqueness can include diferences in branding, service
features or network structure. Increasingly entrepreneurial frms are characterised
by how new their products or services are compared to previous ones. This means
that new products are likely to be substantially diferent from prior products,
thereby valuing innovation as the key product attribute. Entrepreneurial frms are
those that disrupt current market practices by bringing new ideas into the market,
thereby creating cutting-edge products that include new attributes.
Entrepreneurs are the driving force behind innovation as they provide the
impetus for economic development to take place. Entrepreneurs are diferent
from other individuals as they are willing to engage in innovation and risk-taking
activity. This occurs by trying new ideas or rethinking current business practices.
Some individuals do not want to engage in risk-taking activity and are happy with
the status quo. Thus, in order to progress society, entrepreneurs are needed to
step in and take decisive action about new projects. It can be difcult for entrepre-
neurs to introduce new ideas as they are normally untried in the marketplace. This
means that there will be some resistance to a new idea until it is adopted by others.
Most types of entrepreneurship emphasise innovation, which is normally meas-
ured as “research and development expenditure, number of inventions regis-
tered at a patent ofce, new products and processes introduced. And the share of
sales accounted for by innovative products” (Audretsch, 2012: 760). Sometimes
growth is used as a proxy for innovation, which is hard to measure. Innovation
does not necessarily lead to performance gains and can occur through efciency
improvements. Thus, in order to fully understand the impact of innovation, a
holistic perspective is needed that incorporates how entrepreneurship is embed-
ded in communities.

Entrepreneurship in communities
In stagnating or declining regions, local entrepreneurship can spur communities
into action. An entrepreneurial mindset involves being alert to opportunities and
 Future directions 119
then taking a risk in pursuing an idea. This can involve leveraging resources in a
way to solve problems in the marketplace. Entrepreneurship can provide a way
for communities to tackle issues such as deteriorating infrastructure and a shift
in population density. When small communities are motivated to be entrepre-
neurial, the local economy can improve. Therefore, entrepreneurship provides
multiple benefts for communities in terms of knowledge spillovers. Whilst busi-
ness creation is at the centre of most of the entrepreneurial endeavours, other
fow-on efects include rising employment rates and regional development. This
means that generally entrepreneurs have a sense of commitment to a community
in terms of not only providing services but also wanting to facilitate other forms
of economic and social activity. In most of the communities, there needs to be a
support structure for entrepreneurship. This involves mobilising individuals into
action in order to provide economic gain. Communities are important to the
entrepreneurial success of a business venture. Entrepreneurship can be consid-
ered as a form of economic strategy designed to facilitate community develop-
ment. A community is dynamic and changes based on the input of individuals,
businesses and government entities. Therefore, a community is based on the fow
of information circulating in society. The bonds existing amongst individuals in
a community can facilitate community development. Economic bonds refer to
fnancial linkages between individuals, businesses or entities based on need. Social
bonds refer to more communicative or family networks that provide a sense of
cohesion. Individuals in a community have a shared bond due to the locality
where they reside.
In order to understand the role of entrepreneurship in communities, it can
help to focus on the various elements that comprise a community. This is referred
to as the community capitals framework. Adhikari et  al. (2018: 259) state that
the community capitals framework includes “(1) built, (2) cultural, (3) fnancial,
(4) human, (5) political, (6) social and (7) natural capital”. The community capi-
tals framework can be explained as providing a way to analyse community devel-
opment eforts using a systems perspective. Built capital includes all the physical
buildings that are located in an area. These facilities can be used for a variety
of purposes including for non-proft and proft reasons. Physical infrastructure
is needed for entrepreneurship, so the existence of built capital is required for
economic development. Cultural capital includes the history and heritage existing
in a region. This type of capital can take time to establish as it involves the use
of intangible assets. Financial capital refers to the assets a region has that are in
the form of cash or other investment. The more fnancial capital a region has, the
easier it should be for entrepreneurs to obtain fnancing. Human capital refers to
the knowledge and expertise of individuals. This knowledge can be an important
source of information for entrepreneurs. Moreover, specifc types of expertise such
as scientifc knowledge may be more conducive to specifc types of entrepreneur-
ship. Political capital refers to the accumulation of resources built through rela-
tionships. This can include trust and goodwill amongst a group of stakeholders.
Social capital refers to the network of relationships that enables society to func-
tion. This includes reciprocity and a sense of belonging in a community. Natural
120 Vanessa Ratten
capital involves the existing non-man-made resources such as geographic location,
water, energy and mineral resources. Entrepreneurial competencies are embed-
ded within an individual’s human capital. This is due to skills such as assessing
and exploiting an opportunity being considered as knowledge assets. Over time
an individual’s entrepreneurial competencies can change through education and
training. In addition, the more experience an individual has with certain business
pursuits such as acquiring fnancing or building a venture will contribute to their
entrepreneurial competence. Entrepreneurial competencies not only tend to refer
to understanding how to recognise then act upon an opportunity but can also
refer to self-efcacy or tenacity. This is due to the way an entrepreneur needs to
convey a compelling vision about the idea and then manage the risks involved.
The entrepreneurship community is characterised by a lack of knowledge of
Indonesia despite its global signifcance. It is crucial that more emphasis is placed
on Indonesian entrepreneurship as it provides a fruitful research stream that is
embedded with practical signifcance. Indonesia is quickly transforming its econ-
omy to focus more on technological innovation. Therefore, a greater appreciation
of Indonesia’s entrepreneurial culture is required. This means that, to understand
Indonesian entrepreneurship, the culture and society needs to be appreciated.

Entrepreneurial ecosystems
The literature on entrepreneurial ecosystems has largely developed from the
economic geography feld. This has resulted in it being more cartographic and
structural based than other forms of entrepreneurship. Nevertheless, research
on entrepreneurial ecosystems from other research felds particularly in terms of
economic advancement has further diversifed the research. Entrepreneurial eco-
systems involve interdependent relationships that can directly or indirectly sup-
port entrepreneurial activity. Cao and Shi (2020: 1) state that “a broadly agreed
notion among researchers refers to an entrepreneurial ecosystem as a community
of multiple evolving stakeholders that provides a supportive environment for new
venture creations within a region”. This statement acknowledges that within all
entrepreneurial ecosystems is a group of stakeholders that each has a vested inter-
est. Each actor in an entrepreneurial system varies in terms of power and input.
More powerful actors include government entities that regulate market behav-
iour. Less powerful actors include individuals who work for a variety of businesses
over a period of time. However, the input that these individuals provide in terms
of knowledge and advice can be invaluable.
There has been more interest by Indonesian politicians and business leaders
about the relevance of entrepreneurial ecosystems. This is due to the concept of
knowledge spillovers being an important component of an entrepreneurial ecosys-
tem. In addition, an ecosystem enables synergies to develop overtime. To create
and nurture entrepreneurship, there needs to be an emphasis on innovation and
creativity. Entrepreneurship research has shifted from emphasising the individual
entrepreneur to taking a more systemic or ecosystem point of view. This derives
from the realisation that individuals need a conducive environment to develop
 Future directions 121
their business activities. This environment involves a group of entities working
together to achieve a common goal. An entrepreneurial ecosystem functions
when a set of coordinated factors work together in order to facilitate productive
forms of entrepreneurship. This means that there are positive gains to the entre-
preneurial activity in terms of fnancial and/or social gain. A  well-functioning
ecosystem has a set of actors that act in a collective manner. Entrepreneurs are not
autonomous entities but require others to help meet their goals. This means that
networks in the form of exchanges and relationships are important.
An ecosystem is a way to depict the competitive environment. Increasingly
frms are depending on other frms in order to create, market and distribute their
products. This dependence means that the word ecosystem is replacing the word
market in discussions about the business environment. An ecosystem exists as a
set of relationships that are based on shared resources, knowledge, spillovers and
regulatory requirements. Many diferent types and sizes of frms are required in
an entrepreneurial ecosystem. Startups provide new ideas, whilst large frms can
supply access to necessary infrastructure. Thus, the future of Indonesian entre-
preneurship faces a clear division between those embracing digital technology
and those resisting emerging technologies.
Innovation ecosystems are responsible for much of the disruptive innovation
that occurs in society. The nature of these ecosystems difers depending on their
location and membership. Normally the location of an ecosystem is related to the
type and quantity of specifc industry segments. This means that, in places of high-
technology or scientifc research, there is likely to be associated entities. This makes
it easier for entities in an ecosystem to interact and communicate new ideas. The
membership of an ecosystem can difer depending on its size. This means that
smaller, community-based ecosystems are likely to have local members that can
facilitate economic development. Larger ecosystems may have a more varied mem-
bership due to the need to incorporate international partners. This makes it difcult
in some cases to replicate an ecosystem due to its varied membership. Members of
an ecosystem participate in the startup then scale-up of business ventures.
Entrepreneurship is a process that involves bringing into existence ideas that are
conceived of with future usages in mind. This means adding an innovation to the
marketplace through creative thinking. Individuals choose to become active entre-
preneurs. Entrepreneurs face a number of risks when developing their business.
The main risk relates to fnance in terms of acquiring the right amount and kind
of fnance. In order to establish and grow a business, fnancing is needed. Thus, it
is important that it is provided in a quick manner. Some entrepreneurs engage in
a process of staged investing in order to expend resources only when needed. This
means that the business idea is established in a step-by-step way. Other entrepre-
neurs partner with others in order to share resources and shift the risks.

The role of context in Indonesian entrepreneurship

To fully understand the role Indonesian entrepreneurship plays in the global
economy, an examination of the context is needed. Context provides a useful
122 Vanessa Ratten
background to analyse entrepreneurship as it infuences behaviour and attitudes.
Johns (2006: 386) defnes context as “the situational opportunities and con-
straints that afect the occurrence and meaning of organizational behaviour as well
as functional relationships between variables”. This means that context can occur in
both a formal and informal manner. The formal way to analyse context is by exam-
ining the impact of economic, social, cultural and technological changes in the
environment. This includes analysing formal metrics such as tax rates, regulations
and economic growth. Informally context includes the impact of the surround-
ing environment on entrepreneurship. It may be harder to quantify the impact
of informal activity in entrepreneurship. Consequently, incorporating formal and
informal contexts into understanding entrepreneurial behaviour is required.
It is important to provide more information about entrepreneurship from an
Indonesian context. Context in an entrepreneurial setting refers to “circum-
stances, conditions, situations or environments that are external to the respective
phenomenon and enable or constrain it” (Welter, 2011: 168). Context is impor-
tant as it can help or hinder entrepreneurship. Some contexts notably geographic
areas such as Silicon Valley contain a high proportion of technology frms that
help facilitate entrepreneurship. Other locations might constrain entrepreneur-
ship due to regulatory requirements or cultural conditions.
The practice of entrepreneurship in Indonesia varies markedly from that in
other countries. Whilst this is gradually changing, there is still some way to go
before the conditions are the same that exist in other countries. Due to the
impact culture has on entrepreneurial activity, there will always be some dif-
ferences between countries. In emerging economies, there is normally more
necessity rather than opportunity entrepreneurs. This is due to the lack of social
security in many emerging economies that makes entrepreneurship a necessity.
Moreover, in emerging economies, there can be a lack of institutional structures
to facilitate business practices. This can make it difcult for entrepreneurs to gain
assurance that they will have legal protection. This means that there is more risk
and uncertainty for entrepreneurs.
Entrepreneurship can occur in a variety of contexts that are shaped by biol-
ogy. This means that environmental conditions in terms of economic conditions
shape entrepreneurship, but there are also characteristics of individual entrepre-
neurs that need to be considered. In addition, there has been an increasing pres-
sure from various stakeholders and institutions in Indonesia to increase rates of
entrepreneurship. This has resulted in a changing relationship between business
entities, the government and society. More emphasis is now placed on entrepre-
neurial management and practices that bridge for-proft and non-proft initia-
tives. Current studies on entrepreneurship in Indonesia focus on a wide range of
subjects such as the role of the digital economy, the motivators for adopting an
entrepreneurial mindset and the impact of entrepreneurship on society. Yet there
seems not to have been an efort to synthesise studies on Indonesian entrepre-
neurship. In order to guide future research, it is helpful to present the status of
this research area as a distinct topic by focusing on the role of context in Indone-
sian entrepreneurship.
 Future directions 123
The Indonesian context means that organisations need to be ambidextrous in
today’s competitive global marketplace. This enables them to align their entre-
preneurial practices with emerging market needs. To be ambidextrous can be a
complex task as organisations adapt to change in the environment whilst meet-
ing current demands. Organisations need to deal with internal tensions and new
issues in order to stay competitive. Ambidexterity can ensure an organisations
long-term success by balancing current with future needs. This enables existing
management practices to be refned whilst exploring new possibilities. Table 9.1
provides some suggestions for future research in contextual terms. This includes
focusing on issues such as inequality, working conditions, international realities
and entrepreneurial careers.

Research priorities about Indonesian entrepreneurship

The consideration of entrepreneurship in Indonesia is not a new phenomenon
as it has been practised for a long time period. However, this research feld will
see a new level of interest on the topic given Indonesia’s position in the global
economy and the increased emphasis within the country on technological inno-
vation. The emerging and potential links between Indonesian entrepreneurship
and economic growth tend to be centred around high technology. This incorpo-
rates artifcial intelligence, mobile commerce and big data that will increase the
diversity of Indonesian entrepreneurship research. Due to the increased recogni-
tion of Indonesia in the global economy, there is expected to be unprecedented
opportunities for researchers. At the same time, there will be challenges to keep

Table 9.1 Suggestions for future research on Indonesian entrepreneurship in contex-

tual terms

Approach Suggestions for future research

Inequality in Study the role of inequality in entrepreneurship.

entrepreneurship Whether entrepreneurship emerges from need or
opportunity.
Analyse the role of context in entrepreneurial
behaviour.
Working conditions What are the rewards or incentives for
entrepreneurship?
Ascertain the diferent motivations for
entrepreneurship.
Analyse leadership styles conducive to
entrepreneurship.
International realities Analyse the cultural diferences in entrepreneurs.
Ascertain how entrepreneurship is embedded in society.
Entrepreneurial careers Analyse social networks and relationship management.
Understand the impact of the formal and informal
environment.
Evaluate the career expectations of entrepreneurs.
124 Vanessa Ratten
up to date with the rapid changes in the Indonesian economy. This arises from
ethical issues in terms of collecting data and issues of intellectual property protec-
tion. In addition, there needs to be some degree of consideration about cultural
and social factors when doing research in Indonesia. The key opportunity is the
promise of a new generation of insights into Indonesian entrepreneurship by
means of increased publications. This will enable new research methods, study
designs and datasets on Indonesia to be used. In order to progress research on
Indonesian entrepreneurship, more conceptual and empirical work is needed.
Conceptual work could address the following issues:

1 Types of entrepreneurship occurring in Indonesia

2 Developing a theory of Indonesian entrepreneurship
3 How entrepreneurship can be productive or destructive
4 How technology can support entrepreneurship
5 The role of government and institutional support for entrepreneurship

Each of these distinct research areas will now be discussed in terms of under-
standing why they are important and how they will contribute to existing
entrepreneurship research, thereby ofering a new way of understanding how
the Indonesian context contributes to economic development. This will enable
researchers to focus in more detail on Indonesia as a unique country context for
entrepreneurship research and practice.

Types of entrepreneurship occurring in Indonesia

The term ‘Indonesian entrepreneurship’ might appear ambiguous as it can refer
to entrepreneurship in Indonesia and entrepreneurs who are by nationality Indo-
nesian. Entrepreneurship research needs to challenge the current assumptions in
order to bring new ideas to fruition. Many of the existing assumptions are eth-
nocentric and developed by researchers in certain countries. Therefore, entrepre-
neurship research needs to rethink current research practices by introducing new
contexts. This will help encourage serious study of Indonesian entrepreneurship
that is needed in order to advance our knowledge about how entrepreneurship
is practised.
The relationships between Indonesian culture and entrepreneurship are com-
plex. This is due to the diverse culture existing in Indonesia and the diferent
ways entrepreneurship is conducted in society. Entrepreneurship is motivated
by a number of factors including for necessity and those interested in pursu-
ing an opportunity. Thus, research on Indonesian entrepreneurship needs to
examine both necessity and opportunity forms of entrepreneurship. Necessity
entrepreneurs establish businesses as a source of income in order to survive.
Opportunity entrepreneurs are normally not motivated by necessity but instead
pursue a gap in the marketplace. Over the past decade, there has been a prolifera-
tion of Asian entrepreneurship in general but most of this research focuses on
China and India. This means that there is less research specifcally on Indonesian
 Future directions 125
entrepreneurship although it is sometimes classifed as Southeast Asian entrepre-
neurship. Thus, more emphasis needs to be placed on examining diferent types
of entrepreneurship.

Developing a theory of Indonesian entrepreneurship

The sheer diversity of existing entrepreneurship studies has contributed to a wid-
ening of the feld. Entrepreneurship research represents a hybrid feld with many
diferent perspectives. Indonesian entrepreneurship is a theme attracting substan-
tial interest in the academic community as it represents a promising research track.
Thus, more research needs to develop a theory of Indonesian entrepreneurship as
a process of using deliberate action to pursue innovative and risk-taking activity.
It involves acknowledging business opportunities that are currently overlooked
in the marketplace. Entrepreneurs need to have the confdence and capabilities to
turn ideas into a business venture.
The question emerges whether Indonesian entrepreneurship matters. Of
course it does, as Indonesia is the fourth most populous country in the world and
is at the centre of an emerging entrepreneurial ecosystem. Recent high levels of
startup activity especially in the technology sector further fuel this growth. There
are many special things about Indonesian entrepreneurship that justify more aca-
demic attention. Indonesian entrepreneurs need to not only pursue new ideas
but also comply with public interest and business imperatives. Therefore, from
their very inception Indonesian startups need to balance diferent demands. This
has meant that the rise in technology startups has also meant a shift in empha-
sis to digital business. The scope and velocity of change in technology make
entrepreneurial outcomes unpredictable for startups. Some startups succeed very
quickly, whilst others may need to overcome hurdles in order to develop. This
makes it important for startups to depend on creative ideas in order to bring new
ideas into the marketplace. The demand for digital products is infuenced by the
nature of the product and potential revenues. In addition, advertising is support-
ing digital content development, so digital websites need to appeal to advertisers
and consumers.

How entrepreneurship can be productive or destructive

There are environmental factors that pose distinct challenges to Indonesian
entrepreneurs, which entrepreneurs in other countries do not face. This exem-
plifes why the study of Indonesian entrepreneurship is relevant. Developing a
defnition of Indonesian entrepreneurship is an important step in conceptualising
the feld in terms of understanding whether entrepreneurship is productive or
destructive. Entrepreneurship is defned in diferent ways that often depend on
the interest of the researcher or practitioner. Individuals interest in commercial
or corporate ventures tends to defne entrepreneurship through fnancial perfor-
mance outcomes such as proftability. Those more interested in creativity tend to
focus on learning outcomes from entrepreneurial activity. For those invested in
126 Vanessa Ratten
social ventures, entrepreneurship tends to be characterised by philanthropic activ-
ity. This means that, whilst outcomes are important in entrepreneurial activity,
entrepreneurship also involves behaviour or dispositions. Thus, unlike manag-
ers who monitor outcomes, entrepreneurs are more fully involved in infuencing
specifc outcomes. Entrepreneurship occurs in a range of contexts but normally
involves growth contexts that are identifed through the recognition of market
opportunity.

How technology can support entrepreneurship

There is more emphasis now in Indonesia on technological forms of entrepre-
neurship. This is due to the rise of digital startups that have transformed the
economy. This means that there are more policy incentives for entrepreneurs to
focus on technological innovation. As a result, more research needs to focus on
how technological entrepreneurship is occurring in Indonesia. This means focus-
ing on the knowledge economy and the digital revolution.

The role of government and institutional support for

entrepreneurship
More research is needed on how government and institutions in Indonesia
are infuencing entrepreneurship. This includes focusing on the role of entre-
preneurial ecosystems in developing smart city initiatives in Indonesia. Local,
regional and country level policy needs to be examined in terms of the way
entrepreneurship is being encouraged or hindered. This will enable a compari-
son of policies between geographic regions in order to understand the entrepre-
neurial environment. Table 9.2 states the future research areas for Indonesian
entrepreneurship.

Table 9.2 Future research areas for Indonesian entrepreneurship

Field of study Potential research questions

Anthropology How does entrepreneurship occur in diferent contexts in

Indonesia?
What is the emancipatory potential of entrepreneurship for
subsistence entrepreneurs in Indonesia?
What is the role of culture and family-based settings for
entrepreneurship?
What kind of comparative studies will be useful to understand
entrepreneurship?
How have temporal dimensions afected entrepreneurship?
What are the challenges faced by entrepreneurs due to ethnicity
and social class?
How have institutions and government policy afected
entrepreneurship patterns?
How has the diaspora infuenced the growth of business ventures?
What kind of clusters have afected entrepreneurship?
 Future directions 127

Field of study Potential research questions

Economics What kind of fnancial incentives encourage entrepreneurship?
What is the role of tax subsidies in fostering entrepreneurship?
How can economic policy be utilised for entrepreneurship reasons?
How has internationalisation afected entrepreneurship?
What is the role of informal entrepreneurship?
Finance What kind of fnancial considerations do Indonesian entrepreneurs
make?
What are the fnancial trade-ofs in terms of work/life balance for
Indonesian entrepreneurs?
How do Indonesian entrepreneurs utilise grants and incentives to
build their businesses?
Are fnancial or social considerations more important for
Indonesian entrepreneurs?

Geography How does geography infuence Indonesian entrepreneurship?

Are rural or urban areas more conducive for Indonesian
entrepreneurship?
What are the socio-economic factors infuencing Indonesian
entrepreneurs to reside in an area?
What is the impact of local government initiatives on Indonesian
entrepreneurship?
History How have Indonesian businesses developed over time?
Are Indonesian businesses the same or diferent from past
generations?
What is the impact of family on Indonesian entrepreneurs?
How have Indonesian businesses changed?
Management What are the antecedents and consequences of entrepreneurship?
How can entrepreneur’s stakeholders be managed?
What is the role of social class in entrepreneurship?
How can longitudinal studies be utilised to understand the
changes in entrepreneurship?
What is the role of ethnicity in entrepreneurship?
How do frst, second and third generations of family business
owners difer in their response to entrepreneurship?
Organisational How are Indonesian businesses structured?
behaviour What is the typical size of Indonesian business?
What kind of business structure is used in Indonesian businesses?
How do diferent generations infuence the functioning of
Indonesian businesses?
Politics How does government policy infuence Indonesian businesses?
What is the impact of taxes, tarifs and other forms of subsidies on
Indonesian entrepreneurship?
What kind of public/private partnerships exist in Indonesia?
Tourism What is the impact of tourism on intention to become an
entrepreneur?
How are tourism ecosystems conducive to entrepreneurship?
What kind of tourism enterprises exist in Indonesia?
Technology What is the impact of technological innovation on Indonesian
entrepreneurship?
What kind of startups are occurring in Indonesia?
How has digital technology infuenced Indonesian
entrepreneurship?
128 Vanessa Ratten
Research contributions of the book
This chapter seeks to add to the research available on understanding entrepre-
neurship issues in Indonesia. Previous work on entrepreneurship normally con-
siders regional economic activity or stage of economic development instead of
discussing country-level phenomenon. This means that most of the methods used
to understand Indonesian entrepreneurship have focused on economic modelling
or case study research. These methods provide good data but more integrated
methodological approaches would be useful. This would enable research to ana-
lyse in fne-grained description how the Indonesian context difers. This would
provide a more complex reality of contrasting entrepreneurship contexts, thereby
providing insights and directions for future research.
This book consists of a number of chapters on a range of topics related to
Indonesian entrepreneurship. Each chapter focuses on a diferent topic of entre-
preneurship such as technology, artisan and education. The feld of Indonesian
entrepreneurship is new, so care must be taken in ensuring diferent areas are
incorporated into the discussion. This book has developed the feld of Indonesian
entrepreneurship by synthesising the diferent areas. There is some degree of per-
sonal choice in the topics discussed, but I believe the topics chosen provide the
best areas to focus on that combine cultural practices with business ideas.
Due to the continued growth of entrepreneurship in Indonesia, research in
this area has not kept pace with practice. Research on entrepreneurship in the
Indonesian context has only recently started to emerge in the English language
academic journals. Entrepreneurship is viewed as an important strategy to create
new business opportunities and to sustain economic development. Therefore, it
is timely to examine what entrepreneurship in Indonesia means and what can be
done to extend research interest in this topic.
Entrepreneurship can be defned in diferent ways from the ability to start
a business to the knowledge on how to encourage innovative thinking. Thus,
it is useful to ask the questions: How should Indonesian entrepreneurship be
researched? And what should be the relationships between research and practice?
This book has discussed what is known about Indonesian entrepreneurship and
what needs to be done. If the underlying area of Indonesian entrepreneurship is
optimistic, then, there is a need to understand how Indonesian society can make
the most of that potential.
Entrepreneurship in Indonesia is not new but appears to be in a new phase of
growth. Nevertheless, the growing research on Indonesian entrepreneurship is
yet to coalesce around a common defnition. This might be due to the newness
of the feld and the lack of research coherence. It is also the result of the variety
of actions that constitute Indonesian entrepreneurship. This is both a strength
in terms of enabling more research on this topic and a weakness in terms of lack
of clarity that needs to be addressed. Interest in Indonesian entrepreneurship
appears to be cut across mainstream business, civil society and government. This
means that this book has explained the multiple dimensions of Indonesian entre-
preneurship in a conceptual and empirical way.
 Future directions 129
Theoretical implications
This book contributes to the research on entrepreneurship in two main ways.
First, it reveals a need to focus on emerging country contexts such as Indonesia,
thereby highlighting the gap in the entrepreneurship literature in terms of stud-
ies on Indonesia. As much of the current entrepreneurship theory is based on
a North American or European perspective, it is important to incorporate new
country contexts that are based on diferent cultural conditions. Therefore, this
book contributes to the conceptualisation and operationalisation of an Indone-
sian perspective to entrepreneurship practice. This facilitates the development of
new theories that include cultural and historical considerations. This will change
entrepreneurship theory by introducing new thought processes into the research
discussion. As there are very few entrepreneurship studies on Indonesia in Eng-
lish, this book has opened up the possibility of future research paths. Research
on Indonesia is limited in quantity and quality, so this book has taken the frst
step in reducing this gap. Replication studies can be used in the Indonesian con-
text in order to fnd out if the current entrepreneurship theory also works in
Indonesia. Alternatively new studies that take a fresh approach can be utilised to
study entrepreneurship in Indonesia. Second, this book puts forward new ways
of understanding Indonesian entrepreneurship. This means that entrepreneur-
ship theory proposed in this book could assist scholars to understand emerging
country contexts. China and India have been substantially studied in research on
entrepreneurship but few studies focus on Indonesia, thereby including more
research on Indonesia can create a better and more holistic understanding of
emerging economy entrepreneurship.

Practical contributions of the book

There are a range of topics discussed in this book that highlight the practical
importance of Indonesian entrepreneurship. One of the most notable contribu-
tions is the discussion about the way entrepreneurs enable change and innovation
to occur in a country. This means that it is important for business owners and
managers to encourage an entrepreneurial spirit in their business endeavours.
This book corroborates earlier studies that advocate for more research on con-
text in entrepreneurship and focus on new country contexts. Entrepreneurship
is needed in any context but particularly in emerging markets like Indonesia that
are growing quickly and have an increased middle class. Managers need to give
more attention to entrepreneurship in Indonesia by cultivating an entrepreneur-
ial culture. Efectively developed policies regarding entrepreneurship can help
managers increase their performance.
There are many challenges facing Indonesian managers at the moment includ-
ing responding to the Covid-19 pandemic. Therefore, utilising an entrepreneur-
ial mindset in business practices can help them deal with uncertainty. Managers
are concerned with increasing their business performance but need to do this in
a strategic way. Evidence from the literature suggests that managers need to fnd
130 Vanessa Ratten
solutions for a number of problems including low productivity, job stress and
dissatisfaction with work practices. Thus, having an entrepreneurial mindset can
help managers to balance diferent needs and to utilise innovative approaches in
their business dealings.
Managers should facilitate open communication channels in order to facilitate
feedback amongst their stakeholders. This can enable employees, suppliers and
customers to communicate their thoughts and concerns. By enabling more par-
ticipation in decisions, it can help a manager better manage their organisation.
This will enable managers to increase their understanding of employees and to
address problems. Other management practices such as entrepreneurship training
and development can also be implemented. This will enable a more entrepre-
neurial attitude to be adopted in the workplace. Therefore, a carefully tailored
entrepreneurship program based on current needs can facilitate better workplace
practices.

Conclusion
This chapter has focused on the future trajectory of research on Indonesian
entrepreneurship by enabling new ways of understanding entrepreneurship from
a diferent country context. However, much more work needs to be done on
Indonesian entrepreneurship as there is currently a research gap in the academic
literature on this topic. Whilst there is much practical evidence of the importance
of entrepreneurship in Indonesia, there needs to be more connection between
the academic research and practice of entrepreneurship. This book has addressed
this gap by highlighting the ample opportunities for research on Indonesian
entrepreneurship.

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Index

active learning 5 economic activity 1, 15, 26, 36, 92, 128

agricultural 3, 103–106, 109, 111 emerging markets 4, 6, 7, 23, 116, 129
ambiguity 4, 9, 24, 81 environmental challenges 8
archipelago 3, 61, 92, 115 ethnic groups 2, 34, 61, 115
Asia 1, 2, 32, 57, 60, 75, 79, 115, 116 ethnic migrant entrepreneurs 57, 59,
Asian 1, 2, 115, 124, 125 60, 74
Europe 1, 9, 99
Bali 3, 34, 67, 70, 92 expatriates 57, 67
Bangladesh 60, 62
bankruptcy 5 failure 5, 11, 83, 95, 96, 98, 99
Buddhists 3 farmers 27, 42, 105, 106, 111
business practices 21, 51, 54, 78, 106, fertile soil 3
118, 122, 129 fnancial capital 119
business relationships 3, 115 Finland 94
foreign direct investment 6
Catholicism 93, 115 forest 3
China 1, 6, 16, 60, 61, 100
colonial government 62 gender 4, 25, 63, 64, 96, 98, 99
community 7, 9, 10, 15, 19, 21, 24, 25, Germany 59, 94
26, 34, 35, 38, 40–42, 48, 53, 54, global entrepreneurship 94
58–60, 63, 64, 66, 68, 70, 72, 86, global mobility 57
105, 110, 114, 119–121, 125 God 3, 35
competitive 12, 23, 24, 35, 37, 39, 45, government 3, 10, 24, 26, 51, 62, 66,
49, 79, 81–83, 88, 93, 105, 106, 83, 93, 94, 109, 111, 114, 119, 120,
118, 121, 123 122, 124, 126–128
construction sector 62 grief 5
Covid-19 11, 12, 20, 26, 29, 79, 104, gross domestic product 3, 92
129
cultural conditions 2, 20, 109, 116, Hindu 3, 35, 48, 61, 93, 115
122, 129 historical setting 7
hospitality 3, 26
data analytics 11, 78, 88 host countries 58, 59
databases 94, 100 human connections 7
democracy 3 human interaction 7, 105
demographic conditions 94 humanity 3, 109
demography 95
Denmark 94 income generating 8
diaspora 58, 59, 61, 72, 116, 126 independence 2, 4, 20, 37, 115
 Index 133
India 1, 6, 60, 61, 115, 124, 129 plantation 3
infation 92 political reform 1, 6, 8, 54, 58, 59, 62,
innovation mapping 11 65, 66, 73, 86, 94, 116, 119
insolvency 5 poverty 2, 23, 194, 108, 114
international strategies 5, 6 proactiveness 3, 37
internet 7, 11, 21, 38, 78, 85, 88, 89, psychological 4, 5, 39, 40
110 public information 57
intra-regional 69, 75, 95
Iran 95 quality controls 95
Israel 94
Italian 59 real world 11, 78
regional development 1, 8, 15, 119
Jakarta 2, 92, 115 regulatory contexts 59
Javanese 2, 28, 48, 62 resilience 11
roads 7
Komodo 3 Romania 95
rurality 103
leadership style 89, 95, 123
locations 4, 38, 40, 70, 104, 122 school 9, 10, 94
Lombok 3 sensemaking 5, 24
low-skilled workers 57 social regulations 94
social responsibility 105, 111
Malay 2, 61 societal diversity 57
Malaysian 61 societal problems 11, 107, 110
marketing 20, 23, 24, 26, 32, 38, 49, socio-cultural context 58
74, 78, 87–89, 93, 100, 116 socio-economic factors 4, 127
marriage 61, 69, 72 Sundanese 2
mature economy 6 survey 66, 94, 95
middle class 2, 3, 7, 116, 129
migrant-receiving 57, 58, 60, 63–67, technical skills 93
72, 74 tertiary education 94
mining 3 Thailand 59–61, 79, 96
monsoon 3 theoretical framework 58
Muslim 3, 34 theories 1, 6, 114, 116, 129
Myanmar 60, 61 trade association 63, 64, 67
trust 3, 6, 47, 51, 69, 70, 72, 87, 100,
nascent entrepreneurship 94 119
Nepal 61
new ventures 1 uncertainty 11, 51, 89, 117, 122, 129
North America 1 United Kingdom 94
United States 94
Papua New Guinea 2
passion 9, 21, 32, 35–37, 41 volcanic activity 2
performance gains 105, 118
phenomenon 7, 11 weather 6, 42, 104
Philippines 60–62, 79 World Bank 58, 60, 61
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