Innovation for Indonesian youth entrepreneurs: achievement or compulsion?

Abstract

This paper aims to understand the role of innovation in youth entrepreneurship in Indonesia. Youth entrepreneurship is one of the priority programs to combat unemployment problems and to increase entrepreneurship activities in Indonesia. Similar to global trend, although it is not the majority, many youth entrepreneurs tries to apply innovation in their businesses. However, Indonesian adults do not have high preference of innovative products for their consumption, which tend to make innovation not as a distinctive nor potential feature for business. Using Global Entrepreneurship Monitor (GEM) data in Indonesia in 2013, this paper presents how innovation is perceived and utilised by Indonesian youth entrepreneurs. Youth entrepreneurs are all young adult aged between 18 and 34 years old who actively run businesses. Some indicators are also used to support the arguments. The finding suggests that youth entrepreneurs in Jakarta, Indonesia’s capital city, have higher perceived values of innovation compared to youth entrepreneurs in other areas. Also, among some entrepreneurs’ characteristics, education have significantly influenced how they innovate their products. This findings suggest the need to strengthen the education and to improve innovation process for more young entrepreneurial activities.