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ndonesia is on the stage where entrepreneurship plays a significant role in supporting its economy. Small and medium sized enterprises (SMEs) in 2012 reach 99.99 percent of total enterprises in Indonesia. The SMEs employ 107 million workers or almost 91 percent of the total Indonesia workforce in 2012. This figure will surely increase in the following years in accordance with the need of jobs.

The workforce grows faster than the job opportunities causing the rise of unemployment. This situation forces some individuals to explore their capabilities in creating new business as entrepreneur. In 2014 Indonesia'€™s unemployment rate is 5.9 percent, relatively high compared to Malaysia (3.1 percent), Singapore (1.9 percent) and Thailand (0.8 percent). Entrepreneurs create new businesses, new businesses in turn create jobs, intensify competition and may even enhance productivity through technological breakthroughs. This is the importance of having strong entrepreneurship for a country.

According to the Cooperatives and Small and Medium Enterprises Ministry, the entrepreneur rate in Indonesia is only 1.56 percent of the total population in 2013 and rose to 1.65 percent in the second quarter, 2014. Indonesia is still behind Malaysia and Singapore, which have entrepreneur rates of 5 percent and 7 percent and even further behind developed countries such as Japan (10 percent) and United States (12 percent). Many researches find that the ideal comparative number of entrepreneur rates in developing countries like Indonesia is 2 percent of its population. This is what the government aims for at the end of 2014.

In order to create sound policies to enhance entrepreneurship, the government must first identify exactly how the current condition of Indonesia'€™s entrepreneur is. There are two flagship projects we can use to reflect these issues. The first one is Global Entrepreneurship Monitor (GEM) conducted by the International Development Research Centre (IDRC) in collaboration with Parahyangan University (Unpar) in 2013. GEM data reflects entrepreneurial intent and represents the potential supply of entrepreneurs. GEM surveys 4,500 adults, between 15 and 64 years old, in selected 16 provinces, which represent 85 percent of the total Indonesian population.

One of the GEM results is that Indonesia has a relatively high perceived opportunity of 47 percent, this means that 47 percent of respondents see good opportunity to start a business in the area they live, 62 percent of the respondents also believe that they have the required skills, knowledge, and experience to start a new business. Indonesia scores second highest (35 percent) in entrepreneurial intentions among other ASEAN countries such as the Philippines (44.1 percent), Vietnam (24.1 percent), Thailand (18.5 percent), Singapore (15.1 percent) and Malaysia (11.8 percent). Entrepreneurial intentions show how many respondents intend to start business within the next three years.

The main indicator of the GEM report is total early-stage entrepreneurial activity (TEA). TEA consists of two main indicators, which are nascent entrepreneurship rate (populations who are actively involved in setting up new businesses they will own or co-own) and new business ownership rate (populations who are currently owners or managers of a new business for more than three months but less than 42 months). In other words TEA measures how many people are going to start a new business and business owners who will soon become sustainable entrepreneurs. The result was surprisingly high for Indonesia. Indonesia scores nascent business ownership rate of 5.7 percent compared to the Philippines (12 percent), Thailand (7.9 percent), Singapore (6.4 percent), Vietnam (4.1 percent) and Malaysia (1.5 percent). While Indonesia scores highest in new business entrepreneurship with a rate of 20.4 percent compared to Vietnam (11.5 percent), Thailand (10.4 percent), Philippines (6.7 percent), Malaysia (5.2 percent) and Singapore (4.4 percent). This means that the Indonesia TEA score (weighted) is 25.5 percent, which is the highest among other ASEAN countries surveyed.

The other research projects related to entrepreneurship are conducted by World Bank Group Entrepreneurship Survey (WBGES), which is a part of the business report. WBGES specifically highlights the number of newly registered corporations per 1,000 in the working-age population (ages 15-64) to see the relationship between entrepreneurship and the business environment and financial development. The result was captured in an indicator called new business density. In 2012 Indonesia new business'€™s density scored 0.29 new registered companies per 1,000 workforces, relatively low compared to other ASEAN countries such as Singapore (8.04), Malaysia (2.28), Thailand (0.86) and the Philippines (0.27). Although the score is low, the growth of Indonesia'€™s new business density is the highest in 8 years with 9.69 percent compared to others such as Singapore (5.72 percent), Thailand (2.56 percent), the Philippines (0.53 percent) and Malaysia (-1.81 percent). These figures inform us that the barriers to start new businesses in Indonesia are slowly decreased due to government support and environmental development. WBGES data differ from GEM especially that WBGES data would represent the actual rate of entrepreneurship though a tightly registered firm.

From these two pieces of research we can conclude that Indonesia (1) has high entrepreneurship spirit and intentions, (2) has many potential entrepreneurs, (3) tends to create a sustainable entrepreneur after 3 years of establishment, (4) but faces bureaucracy barriers to register new companies. From these points the government can design appropriate policies to support entrepreneurs'€™ growth. Early entrepreneurship education in schools even at home for Indonesian children will boost entrepreneurship spirit. To help lower class in accessing initial capital government already has good policy through People'€™s Business Credit (KUR) micro loans. KUR can be simplified and combined with micro credit channeled through branchless banking policy to broaden its coverage. Tax incentives will also play a significant role in boosting entrepreneurship in Indonesia. The low tax policy (1 percent for SME) can be combined with other tax incentives such as tax holiday for new companies and tax reduction for SMEs that absorb certain numbers of unemployed.

The writer is a senior professional staff at Mandiri Institute