The Indonesian government has realized that entrepreneurial activities increase economy efficiency. Small and medium enterprises (SME) play a dynamic role in Indonesian economy. The number of Indonesian SMEs was 42.4 millions and they contribute to 56.7% of GDP, account 19,4% of total export, and employ 79 millions of work force. There is a strong tradition of women’s entrepreneurship in Indonesia, particularly in micro and small enterprises. In Indonesia, women are less likely than men to be owners. Despite their small numbers, women entrepreneurs in Indonesia have a good reputation.

There are many government efforts to introduce new technology for SMEs development. However, secessionist movements and the low level of security in the provincial regions, as well as relatively unstable political policies, form some of challenges for entrepreneurs. Additional problems include the lack of reliable legal recourse in contract disputes, corruption, weaknesses in the banking system. The confidence of investors remains low, and in order to achieve future growth, internal reform will be essential to build up confidence of international donors and investors.

Indonesia’s garment industry is dominated by entrepreneurs of Chinese descent and the Japer industry by pribumi (Indonesian Malays); in rattan furniture, the two are reasonably equally mixed. About 75 percent of the entrepreneurs in garments and rattan furniture have some university education; less than half of those in the more traditional, skill based Jepara industry do.