Building an Entrepreneurial Ecosystem: Ideas for Indonesia and Beyond

4/26/12

Twenty-plus years ago, I helped launch the $10K Business Plan Competition now known as the MIT $100K Competition. Back then there was very little of formalized entrepreneurship activities at MIT. The $100K gave rise to the Deshpande Center for Technological Innovation after Desh Deshpande had served as a $50K judge and noticed that there weren’t as many cutting-edge early-stage ideas in the competition as he would have liked. Around the same time Professor Dave Staelin, and MIT alum Alec Dingee got the Venture Mentoring Service off the ground, which among other things provided “after $100K support” to entrepreneurs who had entered the $100K.

Over the last 20 years, I have talked to a variety of delegations from other U.S. states and from foreign countries seeking to understand how to be as successful as MIT has been in entrepreneurship. They have seen the MIT Founders Report and the follow up report Professor Ed Roberts did for the Kauffman Foundation that shows that there are 125,000 living MIT alums and that the 25,000-plus active companies founded by MIT alums or professors if taken together would constitute the 11th largest economy in the world.

For many years, I would explain the various programs at MIT that foster entrepreneurship, and many of these delegations would go back to their homes and literally copy every MIT program. Often I would follow up with them and ask them how it was going, and in most cases the answer was “it wasn’t really working.” Over time, I realized that by the time they implemented the MIT-type programs I had described, new MIT programs had been born and the existing MIT programs had morphed. What we were looking at was an evolving Entrepreneurial Ecosystem.

Indonesia—Building an Entrepreneurial Ecosystem

I just returned from the better part of a week in Jakarta, Indonesia, as part of the Startup Boot Camp Indonesia program. Most of you probably don’t know much about Indonesia—I certainly didn’t before my trip. Indonesia is a G-20 country (the 17th largest economy) with 240 million people stretched across three time zones (as wide as the U.S.). Although it is not an Islamic state, more than 86 percent of Indonesians are Muslim, making Indonesia the world’s most populous Muslim-majority nation. The median age of the population is 27, versus 37 in the United States. With 42.5 million Facebook users, Indonesia has the 4th largest number of Facebook users in the world, behind the U.S. (157M), India (46M) and Brazil (45M). So it is a large nation with a young Internet-connected population.

Startup Boot Camp Indonesia is a program run by the GIST (Global Innovation through Science and Technology) Initiative. GIST was established in 2010, with funding from the U.S. Department of State, to spur economic advancement through science- and technology-based innovation in countries across the Middle East, North Africa, and Asia. The idea behind GIST is that economically empowered people (aka entrepreneurs) provide the basis for political stability and economic growth.

Key business and governmental leaders in Indonesia are just beginning to make a major effort to grow an Indonesia Entrepreneurial Ecosystem. This effort was almost single-handedly started by Dr. Ir. Ciputra, a successful Indonesian entrepreneur who recognized that entrepreneurship holds the key to the future of the developing world. Starting in 2006 and after 50-plus years in business, Dr. Ciputra began a vigorous effort to launch an entrepreneurial revolution in Indonesia. He created a new university, Universitas Ciputra (University of Ciputra), with entrepreneurship as the main theme for all students. He reached out and lobbied government and business leaders for support for a national entrepreneurship initiative, eventually obtaining the endorsement of the President of Indonesia. He engaged with the Kauffman Foundation and formed the Global Faculty Visitors Program to accelerate the teaching of entrepreneurship.

Part of the goal of my trip to Indonesia for the Startup Boot Camp was to begin a conversation with Indonesia about Entrepreneurial Ecosystems, taking what we have learned at MIT and helping Indonesia adapt the MIT experience into a workable Indonesia version.

What is my message here? We in the U.S. are lucky to have a system that lets us pursue our dreams with relatively little interference from government and with a culture that is somewhat supportive of entrepreneurship. U.S. entrepreneurship has created personal wealth and vibrant economic activity in parts of our country. However, its biggest impact may well prove to be as a role model for other countries seeking to create opportunity, economic improvement and political stability, something the U.S. has not been able to do in 10 years of military activity in Iraq and Afghanistan.

So for you serial entrepreneurs out there, after you have launched your nth company, take a moment and reflect on the impact that Dr. Ciputra has had. Then think about how you can use your skills to make a real “dent in the universe” by spreading the entrepreneurial virus around the world.

Joe Hadzima is a Managing Director of Main Street Partners, a venture development and technology commercialization firm. Follow @

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