To Evaluate the Role of Government in Promoting Social: Entrepreneurship among Young Students: A Case Study of Indonesia

Social entrepreneurship is associated with the contemporary phenomenon in which the socio-economic development of a company takes place by finding solutions for social problems (Zahra and Wright 2016). As social enterprises address social issues and government is the main responsible entity to address such issues such as unemployment, it is likely that both entities must collaborate for effective solutions to address the social issues. On the other hand, evidence indicates that compared to other age groups, young people are more likely to join in a social enterprise (Ho, Clarke, and Dougherty 2015). The underlying reason is that they can earn a living while supporting various social causes that they have a passionate for and they get more job satisfaction. Young people are more likely to care about world and environment and make efforts towards betterment of the society. However, they also face significantly more barriers to become entrepreneurs such as lack of financial resources, skills and experience. Support from government and involvement of youth community are likely to have positive impact on the promotion of social enterprises in any economy such as Indonesia.

There has been a rise in social enterprises in Indonesia. Therefore it is important to analyse factors that play a positive role in the promotion of social enterprises in this economy. The role of government and youth in social enterprise sector has been identified as one of the positive factors in other countries, particularly European countries. Thus, this study aims to assess the role of Indonesian government in promoting social entrepreneurship among youth in Indonesia.

Indonesia is considered to be a populous country which has been facing a myriad of social and economic problems (Anggadwita and Dhewanto 2016). It has been fervently debated whether the government of Indonesia has a significant influence on training and education of social entrepreneurship (Idris and Hijrah Hati 2013). The debates on this issue have been related to low level of government’s involvement due to which the progress for the development is relatively slow. The case study analysis conducted by Wiguna and Manzilati (2014) stated that in Indonesia, the dominant and leading form of employment has been considered as within nonformal sector. Non-formal sector is the one which is not controlled by the government (Latchem 2014). In particular, social entrepreneurship in Indonesia has a main focus on the micro-enterprises. Traditionally, as said by Roth (2014), small business in non-formal sector of Indonesia has been characterized by the primary methods of production and has a limited access to capital and market which has led to the underdevelopment of the social entrepreneurship sector.

In many of the developing countries, while facing many challenges, social entrepreneurship has been the reason for achieving popular support for the government in the society. However, Razafindrambinina and Sabran (2014) stated that in developing countries like Indonesia, social enterprises have been exempted from the taxes which challenges government’s involvement in the development of social entrepreneurship. Nevertheless, the government of Indonesia has created a regulatory framework for social entrepreneurs in order to support the mission of social entrepreneurs and for gaining socioeconomic development in the country. Thus, this study aims to assess the role of Indonesian government in promoting social entrepreneurship among youth in Indonesia.