IAF Alumni

Economic Freedom and the Challenge of Digital Entrepreneurship

On November 24, 2023, FNF Indonesia together with IAF Indonesia Alumni held a Networking Event & Public Discussion entitled "Economic Freedom and the Challenges of Digital Entrepreneurship" held at the FNF Indonesia office, at Jl. Kertanegara no. 51, Kebayoran, Jakarta Selatan..

This event presented three speakers, namely Poltak Hotradero, Business Development Advisor of the Indonesia Stock Exchange; Rofi Uddarojat, Vice Chairman of the Standing Committee, Directory of Informatics Applications and Standards, WKU Kominfo, Chamber of Commerce and Industry (KADIN); and Nanang Sunandar, Executive Director of the Institute of Democracy and Social Welfare (INDEKS). The event was led by Ganes Woro Retnani, Program Officer of FNF Indonesia who served as moderator this evening.

The substance of the public discussion has been summarized in this article by Sukron Hadi, IAF Alumni and event organizer from FNF Indonesia partner, INDEKS, in Indonesian (original) then later translated to English by FNF Indonesia Communications Officer, Rania Rizkiadinda.

Internet and Economic Freedom Create Democratization of Prosperity

The economy can grow and develop because of entrepreneurial activity (entrepreneurship). Entrepreneurship can develop optimally in an economic environment that is free or guarantees economic freedom. This includes digital entrepreneurship.

Economic freedom, presented by Ganes Woro Retnani (Project Officer FNF Indonesia) as a situation where every individual in society is guaranteed the rights to own property and develop their thoughts, creativity, energy, property and other property to carry out economic activities. He believes economic freedom is very important to be guaranteed.

Ganes conveyed this in the opening of the moderator in the Networking Event and Public Discussion entitled "Economic Freedom and the Challenges of Digital Entrepreneurship" organized by the Friedrich Naumann Foundation (FNF) Indonesia and Alumni of the Internatiol Academy for Freedom (IAF), on Friday, November 24, 2023, at the FNF Indonesia office.

In line with Ganes, Dr. Stefan Diederich as Director of FNF Indonesia and Malaysia said in his opening remarks that it is important to guarantee economic freedom. FNF Indonesia is not only concerned with promoting Human Rights and Civil Liberties, but also with promoting economic freedom in Indonesia.

Economic freedom that is guaranteed and respected by a country, Stefan continued, has been proven to make its people prosperous. Stefan cited South Korea and Germany as examples.

Internet Democratizes Trade

It has been argued above that entrepreneurship, including digital entrepreneurship, can develop optimally in a free economic environment.

The emergence of internet technology has not only opened up the flow of information to be more freely accessed by all members of society. But it also creates democratization of trade supported by a free market.

This was conveyed by Poltak Hotradero (Business Development Advisor of the Indonesia Stock Exchange) as the first speaker in this discussion.

Poltak said that when he was studying in Bandung, it was difficult to get the English books he needed. However, with the presence of the internet and the bookshop site Amazon, at that time, he was able to buy the books he wanted and could resell them on the site.

"I was an early subscriber to Amazon.com. There I could buy the books I wanted," Poltak said.

Besides Amazon.com and eBay, another early internet commerce site was Alibaba. Later, other internet commerce platforms emerged around the world. Including in Indonesia.

On these trading platforms, said Poltak, a variety of goods are available. Sellers provide a wide range of goods. On these platforms, consumers can also search for the goods they want, with ease and choice. Economic freedom finds its form in trading activities on the internet.

"On various marketplace platforms, everyone can sell, can open a shop. As long as they provide goods that other people want, they can run," Poltak explained.

Therefore, Poltak concludes that with the advancement of digital technology and the internet, economic activities on a global scale are more advanced, creating democratization of trade, and having a positive impact on prosperity. Including in Indonesia.

The State of Indonesian Entrepreneurship in the Digital Age

Entrepreneurs are the key actors behind business growth, job creation, and the production and distribution of goods and services that enable the wheels of the economy to turn and society to prosper. This includes entrepreneurs who utilize digital technology.

In short, according to Nanang Sunandar (Director of INDEKS Institute), entrepreneurship-including digital entrepreneurship-is a key driving force for economic development.

"Although entrepreneurs are said to be the motor of economic growth, a large number of entrepreneurs does not guarantee the creation of great prosperity," said the second speaker.

According to Nanang, the quality of entrepreneurs, workers, capital, and technology are factors that determine productivity.

Based on the Indonesian Entrepreneur Profile 2022 presented by Nanang, the majority of Indonesian entrepreneurs are self-employed/not creating jobs for other workforces (55.52%).

Another fact is that the majority of entrepreneurs have not used digital technology (Internet-based) in their work. However, the majority of entrepreneurs assisted by permanent workers (76.61%) use digital technology in their work.  

Nevertheless, continued Nanang, the utilization of digital technology by Indonesian entrepreneurs is trending upward every year. Including businesses in the agricultural sector that have increased.

Challenges of Economic Freedom in the Digital Age

There are accusations that social commerce is killing micro, small and medium enterprises (MSMEs), which led to the removal of the online buying and selling feature on one of the social media platforms in Indonesia.

This condition confirms the data above that the majority of business actors in Indonesia have not utilized and are ready to adapt to the digital economy, even though there has been an increase in utilizing it every year.

But in fact, internet penetration creates new economic opportunities for entrepreneurs in Indonesia. This was conveyed by Rofi Uddarojat (Vice Chairman of the Standing Committee, WKU for Communication and Information, KADIN Indonesia) as the third speaker.

This, said Rofi, is because 77% of the Indonesian population are internet users, and 60.4% of the Indonesian population own and actively use social media.

Even Indonesia's digital economy, based on the latest data presented by Rofi, is worth USD82 billion. "E-commerce is the driver of digital growth up to 73%," continued Rofi.

Therefore, digitalization and the internet are an opportunity and help MSME players. However, the challenge is that digital literacy and internet access are not yet evenly distributed.

Therefore, efforts are needed that can make business actors get access to capital and encourage digital literacy.

"Support more MSMEs to move online by providing education about digital platforms, which are built in collaboration with digital industry players," said Rofi.

In addition, business policies that are not complicated are needed. "Create simplified business policies with programs such as 'fast track' for permits and MSME policies, providing a smooth transition to digital operations," added Rofi.

Closing

The event was a great success, with participants actively engaging and posing enthusiastic questions to the three speakers. The gathering commenced with a shared dinner and concluded with a networking session, fostering connections between participants and speakers. Our sincere appreciation goes out to all IAF Indonesia alumni and FNF Indonesia friends who joined us for this occasion. We look forward to meeting you again at our next event in 2024!