IAF

Entrepreneurship and Open Market: Lessons in Ecosystems from Gummersbach

Gummersbach, a small town nestled just 50 kilometers east of Cologne—the largest city in the German state of North Rhine-Westphalia—became my gateway to Germany on October 13, 2024. It was here that I attended a 12-day seminar on Promoting Entrepreneurship and Open Markets, organized by the International Academy for Leadership (IAF) under the Friedrich Naumann Foundation (FNF) for Freedom. This opportunity was made possible by my organization, the Center for Indonesian Policy Studies (CIPS), in collaboration with FNF Indonesia.

The 12-day IAF seminar included excursions to four historical cities—Cologne, Frankfurt, Mainz, and Weisbaden—where we explored the ecosystem of entrepreneurship and market economy in western Germany. The seminar was facilitated by three exceptional facilitators: Rainer Heufers, Jyoti Sachavirawong, and María José. They were the perfect combination for this seminar right from the start—Rainer brought practical insights on market economy from his extensive work in Asia and Africa, Jyoti added a macroeconomic lens, and María José injected a Latin American perspective that made the sessions globally relevant. Their knowledge, engaging style, and friendly demeanor made the entire experience truly meaningful.

Through interactive workshops, panels, and group exercises, we explored various aspects of market freedom and the need for an enabling framework that promotes entrepreneurship. The seminar combined workshops was indeed a melting pot of ideas, bringing together participants from diverse backgrounds—policymakers, entrepreneurs, activists, and academics—and 12 different nationalities, all united by a shared curiosity and passion for innovation. Grounded in liberal values, these exchanges offered not just theoretical insights but also practical approaches to fostering a more inclusive and open economic landscape.

Key Themes and Insights

Throughout the seminar, several key themes stood out, each offering insightful perspectives on the interplay between entrepreneurship, innovation, and open markets. These themes were not merely academic discussions but were enriched by real-world insights, practical examples, and interactive activities that brought the concepts to life.

Entrepreneurial Mindset

Our sessions commenced with an in-depth exploration of entrepreneurship, from the mindset to the inherent risks involved. As someone who has yet to step into the world of entrepreneurship and possesses limited exposure to this ecosystem, I found the discussion super enlightening. It taught me that the entrepreneurial mindset is a foundational to innovation, they are risk-takers, problem solvers, and visionaries who see opportunities where others see obstacles. Entrepreneurship is not just about generating ideas; it also requires the courage, adaptability, and resilience to transform those ideas into reality.

During a group exercise, we explored the concerns and risks faced by entrepreneurs in our respective countries. Issues like overregulation, difficulty in accessing capital, lack of support for innovation, political instability, market monopolies, bureaucratic hurdles, shifting consumer behavior, lack of information and education, and social inequalities emerged as significant challenges. We also examined how adopting liberal values could provide solutions to these challenges, adding depth to our understanding of the entrepreneurial landscape.

Pillars of the Market Economy

We learned that the market economy provides the foundation for entrepreneurship. It provides both the necessary environment and incentives for entrepreneurs to seek out and exploit new business opportunities, while fostering competition that leads to economic growth and innovation. Rainer emphasized that a market economy thrives on five key principles: private property, freedom of choice, voluntary exchange and liability, competition, and free setting of prices.

Private property is the foundation of a market economy. It means that individuals and businesses have the right to own and control their assets. This first principle gives people a sense of ownership and responsibility over their possessions. The ability to own property incentivizes people to work hard, invest, and innovate. Freedom of choice on the other hand means that individuals and businesses can make their own decisions about what to buy, sell, produce, or consume without government interference. This second principle allows people to pursue their own interests and preferences in the marketplace.

Voluntary exchange is the principle that all economic transactions should be willingly entered into by both parties. When exchanges are voluntary, both parties believe they will benefit from the transaction, leading to mutually beneficial outcomes. Along with this principle comes liability, meaning individuals and businesses are accountable for their actions in the marketplace. This accountability fosters responsible behavior and maintains trust in the market.

Another important principle is competition, which drives efficiency and innovation in a market economy by having multiple businesses compete for the same customers or resources. In a competitive market, businesses strive to offer better products, lower prices, or improved services to attract customers, benefiting consumers with more choices and value. Complementing this is the principle of free setting of prices, where supply and demand dictate costs rather than centralized (government) control. Prices act as signals—rising when goods are scarce to encourage production and reduce consumption, and falling when goods are abundant to boost demand. This last principle enables efficient allocation of resources.

Campaigning for Affordable Rice Prices in Indonesia and Ecuador

The final challenge of the 12-day seminar was to develop a strong campaign on a real-world issue. Divided into teams, our group #Rice4All, focused on addressing the unintended consequences of restrictive rice import policies in both Indonesia and Ecuador. In Indonesia, price controls and annual quotas aimed to protect local farmers but had led to inflated consumer prices and limited supply. Similarly, in Ecuador, restrictive import policies disrupted access to affordable rice during periods of low domestic production and climate risks. Both cases highlighted a critical failure: these policies, while well-intentioned, neither ensured affordability nor guaranteed quality and availability.

Our proposed solution was a shift toward a more open, market-driven approach. The campaign outlined two key goals: aligning rice prices with international reference price and supporting policies that would enhance both food security and market competitiveness. We structured our strategy into three phases:

• Short-term: Partner with reputable research institutions to produce evidence-based policy research and recommendations.
• Medium-term: Conduct direct engagements and sustained advocacy with targeted policymakers.
• Long-term: Build public support by raising awareness, empowering local communities, and supporting farmers in adapting to policy changes.

To connect emotionally with our audience, we framed our pitch around two fictional yet relatable figures: Yanti from Indonesia and Maria from Ecuador. Both women struggled to provide for their families amid soaring rice prices. For them—and potentially millions of rice farmers—rice wasn’t just a staple food, it was the cornerstone of nutrition and the backbone of their households’ livelihoods. This narrative, paired with data on price trends and food insecurity, made a stronger case for reform. Our pitch wasn’t just about rice; it was about creating a fairer system where everyone—farmers and families alike—could thrive.

Reflections for Indonesia

One of the key takeaways was the role of a supportive ecosystem. The German entrepreneurial environment thrives on strong collaboration between the private sector (entrepreneurs, startups, banks, chambers of commerce, and venture capitalists), policymakers (federal, state, and municipal governments), and academia (university and research institutions). This synergy ensures that businesses, regardless of size, have access to resources, mentorship, and innovation-friendly policies. In Indonesia, where entrepreneurs often faces hurdles such as bureaucratic red tape, limited access to capital, and lack of mentorship and support networks, replicating this model of collaboration could help level the playing field and spur innovation.

The discussions on the pillars of the market economy also highlighted the importance of creating an enabling environment where businesses can grow organically. For Indonesia, this means reducing overregulation and fostering market mechanisms that incentivize both risk-taking and accountability. Policies should encourage competition while supporting small and medium enterprises, which often struggle to compete with dominant players. The rice campaign exercise was a relevant reminder of how misguided policies can create unintended consequences—price controls and import restrictions often backfire by hurting the very people they aim to protect.

The Way Forward

The insights I gained weren’t just about understanding abstract principles; they were about reimagining how these principles can be applied to create a more inclusive and sustainable entrepreneurial ecosystem back in my home country, Indonesia. Beyond the academic exercises and city visits, the seminar offered something even more profound: the connections forged during coffee breaks, brainstorming sessions, and evening socials. These moments of camaraderie were a powerful reminder that entrepreneurship and open markets are not just economic constructs—they are about people, friendship, and the beauty of human connection.

Moving forward, the focus must shift from theory to action. Policymakers, entrepreneurs, and civil society must work together to implement reforms that address systemic challenges. Evidence-based policy research and public awareness campaigns can significantly influence perceptions of the benefits of open markets, particularly in regions where skepticism prevails. At CIPS, we are committed to driving policy reforms through a market-driven approach, rooted in the belief that only civil, political, and economic freedom allows Indonesians to achieve greater prosperity.

Lastly, I want to express my deepest gratitude to the FNF IAF organizers, the seminar assistant, the facilitators, and all who made my two-week stay in Gummersbach unforgettable. Thank you, thank you so much! I close with the words of Ludwig Erhard, the father of Germany's post-war economic miracle: “Economic success is not the result of good fortune, but of sound principles, hard work, and wise decisions.”