Promoting peace
SK Zainuddin | June 02, 2011

When US President Barack Obama identified the promotion of entrepreneurship in Muslim countries as a key driver of US foreign policy, he unleashed a program that touched millions of people around the world. Indonesia too has felt the bug as it prepares to host the first ever Global Entrepreneurship Program in July Steven Koltai has a sign on his door: “World Peace Through Entrepreneurship.” 

The senior advisor for Entrepreneurship at the US State Department lives and breathes this message and is hoping to spread it to Indonesia. In Jakarta recently to lay the preparatory groundwork for the first ever meeting of the Global Entrepreneurship Program (GEP) in July, Steven told GlobeAsia that Indonesia is the third majority Muslim country in the world to host GEP, after Egypt and Turkey.

The idea originated from the 2009 speech President Barack Obama delivered in Cairo in which he talked about promoting entrepreneurship as a key driver for US foreign policy. The president also announced in that historic speech that he would host an entrepreneurship summit within a year and lived up to that promise by convening the summit in 2010 in Washington.

An entrepreneur and angel investor himself, Koltai organized the summit which was attended by more than 200 delegates from 55 countries, including Indonesia, which had the second largest delegation. “The most important thing in society is economics and jobs,” noted Koltai, who was born in Hungary but fled to the US during the 1956 revolution.

“Entrepreneurship is the single biggest creator of jobs,” he says, adding that from 1985 to 2005, net job growth in the US was in small and medium sized enterprises, outstripping job growth in large companies. “This is even more true in developing countries that have few large companies,” he says. “Jobs is the main issue as it underpins political and social stability.” 

The world according to GEP 

GEP’s purpose is to promote entrepreneurship in countries that are foreign policy priorities for the US, are near the “tipping point” to go entrepreneurial and where there is US government interagency commitment to do so.  GEP operates through partners, both in the US and in-country, who are drawn from five categories:  Non-government organizations (NGOs), corporations, foundations, academic institutions and investor groups (private equity, venture capital and angel investors).

The architecture of GEP is based on the view that a successful entrepreneurial ecosystem requires work in six areas:  identify, train, connect, sustain, enable public policy and celebrate entrepreneurs.  GEP –driven programs include the establishment of entrepreneurs-in-residence in focus countries, of which the first are Egypt, Indonesia and Turkey, mounting of entrepreneurship missions consisting of leading US early-stage investors and entrepreneurs to meet with start-ups abroad, encouraging the expansion of angel investor groups, creating an “entrepreneur bridge” (incubators, accelerators and centers of commercialization) to work alongside centers of innovations such as universities, a web-based mentor/mentored matching platform, just to name a few.

“In each of the three countries, our job is to be a catalyst, coordinator and consultant to local players who are interested in bolstering the entrepreneurial eco-system,” says Koltai. “One important factor is whether the government embraces entrepreneurship, but we work primarily with private partners.” Koltai has found more than just willing partners in Indonesia.

From the government, two heavyweight ministers, Trade Minister Mari Pangestu and Chairman of the Investment Coordinating Board Gita Wirjawan, have signed up. In the private sector, Shinta Kamdani, who was a delegate at the Washington summit in 2010, is spearheading the program under Global Entrepreneurship Program Indonesia (GEPI). The organization was founded by some of Indonesia’s most prominent entrepreneurs such as property tycoon Ciputra and media mogul Jakob Oetama. Ernst & Young, which runs the annual Entrepreneur of the Year Award, is also a partner.

Indonesian Summit

GEPI’s first task will be to convene an entrepreneurship summit in Indonesia in July where a high-powered delegation from the US will attend along with Secretary of State Hillary Clinton. The US delegates, many of them angel investors, will listen to business plans and pitches from hundreds of Indonesian start-up entrepreneurs and will offer funding and advice to a selected few. “We will select from hundreds of interested start-ups but 32 will be selected to pitch directly to the delegates,” Koltai notes.

The start-ups will be divided into two categories, tech and non-tech, as Indonesia has a very large non-tech entrepreneurial community. From the 32, four winners will be selected to present at the Asean Entrepreneurship Summit in Bali on July 22 where Mrs. Clinton will deliver the keynote address. “We want people to apply to present at the summit as there will be training workshops, angel investing sessions, apprentice workshops as well as a host of follow-on programs,” says Koltai. Interested participants can go to the GEPI website and submit ideas. 

Shinta, who heads her family’s Shintesa Group, told GlobeAsia that it is critical that Indonesia responds to the program in a positive way. “I was a delegate at the Washington summit so I am trying to implement it here,” she says. GEPI, she adds, is now an umbrella organization for other groups in the country that are promoting entrepreneurship.

“If we want to develop the economy, we have to develop entrepreneurship. This is our biggest challenge.” Shinta notes that 99% of all firms in Indonesia are SMEs, and most of these find it difficult to raise financing as banks are only willing to offer consumer loans. “It is very difficult for these companies to grow their business this way.” GEPI aims to help raise financing from the private sector through angel investors and programs that are specifically targeted at entrepreneurs.

The organization offers mentoring and helps SMEs develop viable and bankable business plans. GEPI will, for example, start the Entrepreneur in Residence program with Ciputra, where young entrepreneurs can tap on his vast knowledge and experience. “We need entrepreneurial knowledge as well theoretical knowledge,” says Shinta. “Our training thus goes beyond the classroom and involves real-life lessons.”

Developing entrepreneurs therefore goes beyond just giving them money but helping them start up and grow.” GEPI has its work cut out but it can draw on the lessons and experience of other countries in the region. As Shinta notes, a clear set of deliverables need to be established so entrepreneurs will be able to gauge their progress accordingly.  GA  

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