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n the recent 2015 Global Entrepreneurship and Development Institute (GEDI) report, Indonesia ranks 120th in the Global Entrepreneurship Index (GEI) out of 130 countries, and 19th of 21 countries in the Asia Pacific.

Indonesia is also in the top 10 countries with biggest score declines from the previous year. This is not encouraging news at all, especially when the country is set to embrace the ASEAN Economic Community (AEC) later this year.

In a more open, practically barrier free playing field, the quantity and quality of entrepreneurs of a country are believed to play critical roles, as a game changer and a source of competitive advantage.

What are the fundamental problems of the country'€™s entrepreneurship score worsening this year?

Conventional wisdom says at least 2 percent of the country'€™s population should be entrepreneurs for the country to be able to prosper.

According to data from the Cooperatives and Small and Medium Enterprises Ministry, the number of entrepreneurs in Indonesia is still very low compared to other ASEAN countries.

The percentage of entrepreneurs in Indonesia is only around 1.65 percent of the population. In Singapore, the number has reached 7 percent, Malaysia 5 percent and Thailand 3 percent.

Almost all (99 percent) of businesses in Indonesia are categorized as micro, small and medium enterprises (MSMEs). Their contribution to employment is 96.99 percent, and to gross domestic product (GDP) formation is 60.34 percent.

These figures show that attempts to improve MSMEs with proper benchmarks to global entrepreneurship best practices will have a significant influence on the economy of Indonesia.

Of the 14 pillars in the GEI, the score of Indonesia is fine in opportunity recognition. This component measures the percentage of population that can identify good opportunities to start a business in the area where it lives.

It testifies to the ability of entrepeneurs in Indonesia to spot and capitalize on emerging opportunities. The recent popularity of agate stone or batu akik in society shows how micro and small entrepreneurs are quick in spotting opportunities and leveraging surging demand.

However, whether this demand for the stone will continue over the long term or be just hype may not be considered at all by these entrepreneurs.

We can reflect on the sudden popularity of anthurium leaves few years ago, which caused the price to skyrocket in a short time, but as the market fundamentals were not strong, the demand soon flattened out, causing many '€œshort-term entrepreneurs'€ to suffer huge losses.

Indonesia is considered weak in the component of high growth. This component measures the percentage of high-growth businesses that intend to employ at least 10 people and plan to grow more than 50 percent in five years using strategic tools.

The majority of MSMEs in Indonesia do not have business plans in the first place, let alone clear, well articulated strategic documents.

These entrepreneurs only have short-term targets and never think of how and by what means their businesses will grow in the future. The non existence of business plans and strategies causes banks and investors to be reluctant to provide capital support to MSMEs. Many MSME entrepreneurs still provide '€œme too'€ products, no brand and no clear differentiating elements with other products in the market.

Another weak component for Indonesia is internationalization. The proxy for internationalization is exporting, since it measures the capabilities of entrepreneurs to serve wider demands beyond those in domestic markets.

Indonesia'€™s entrepreneurs score low in this aspect because SMEs share in Indonesia'€™s exports is fairly small. Data from the Trade Ministry shows that from approximately 670,000 SMEs across the country, only 5,000 export some of their products abroad (about 0.75 percent).

The value of Indonesian non-oil and gas exports in 2014 reached US$145.9 billion, of which SMEs contribute only around $23 billion, or a mere 16 percent, a far cry from global standards of 25 percent.

This weakness may be attributed to the inadequate capacity of Indonesian entrepreneurs to build communication with their international counterparts, low confidence in business negotiations and poor understanding of trade contracts written in English.

As might be expected, another GEI component in which Indonesia is weak is human capital. An important feature of a venture with high growth potential is the entrepreneur'€™s level of education and employee quality. Investing in employee training pays off as the training increases productivity.

Obviously this very problem is related to the overall mediocre quality of education in Indonesia.

Various policies have been issued by the government to facilitate the creation of new entrepreneurs. However, policies are also required to improve the traits of entrepreneurial quality. The prevailing dominant paradigm in society is that an entrepreneur shall possess entrepreneurial spirit associated with a high appetite for risk taking, vigilance of market opportunities, resilience and not be required to attend formal education.

From the GEI result, it turns out that planning, business strategy, internationalization and the training of human capital are crucial in the sustainability of ventures owned by entrepreneurs.

Entrepreneurs can no longer depend solely on their entrepreneurial spirits per se, but should also use strategic tools, communication skills, continuing education and understanding of international markets.

If business executives are often encouraged to be able to think like an entrepreneur, it is timely now to educate our entrepreneurs to be able to think like a business executive.
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The writer, currently the head of the strategy and growth studies doctoral program in management at Bina Nusantara University, obtained his doctorate degree in management from the University of Indonesia.