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View all search resultsWhat happened to Indonesia’s entrepreneurial class?
Indonesia’s missing entrepreneurs didn’t vanish by choice—they were systematically crowded out by a centuries-old governing instinct that still prefers centralized control over local economic freedom.
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Students of the Al Khoir Islamic Excellence School sell things on Nov. 30, 2025, during an event called Pasar Bocah in Surakarta, Central Java. Accompanied by teachers and parents, the students learned about entrepreneurship and were introduced to the use of the rupiah at the event. (Antara/Maulana Surya)
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ndonesia’s weak entrepreneurial formation is seldom examined seriously through the lens of culture. Culture may be mentioned, but it is rarely studied as a long-term force—largely because doing so requires patience, historical depth and a longer horizon than most policy thinking is willing to bear.
Where social legitimacy, family expectations, fear of shame and informal signals carry immense weight, ignoring culture causes policymakers to misread how entrepreneurial choices are actually formed.
But the harder reading began in the 15th and 16th centuries, when the trading world of the archipelago was anything but empty of commercial initiative. As the sociologist Syed Hussein Alatas argued, Javanese and Malay societies contained a flourishing merchant class engaged in high-level trade across wide commercial networks.
They were not marginal actors in local exchange alone; they operated across serious regional and international circuits. The better historical question is not why Indonesia lacked original entrepreneurial energy, but how a society with that historical reach could see its commercial layer weakened so severely within less than two centuries.
Hussein’s answer is that this entrepreneurial layer did not fade naturally; it was systematically dismantled by colonial monopoly and extraction. Crucially, the damage did not come only from the outside.
Under such conditions, modern passivity should not be mistaken for original indolence. It was a calculated adaptation to insecurity and the repeated punishment of independent effort. The colonial period has ended, but the habit of narrowing local economic agency has not entirely disappeared.
To be sure, the present is not the colonial past. The actors are different. The language is different. Yet some governing instincts look strikingly familiar. The state says it wants more entrepreneurs, yet its current designs routinely bypass local economic agency, centralize control and reduce the space in which independent enterprise can emerge.
