The document proposes a framework for entrepreneurship education in Indonesia. It summarizes current initiatives and lessons learned. Key recommendations include establishing political support, setting clear goals, reviewing curricula, and building public-private partnerships. It also recommends decentralizing entrepreneurship units, supporting school business projects, and establishing a training and certification system for teachers with master trainers, key facilitators, and regular skills upgrading. The goal is to encourage entrepreneurship and reduce unemployment among Indonesian youth.

1. ILO Education and Skills Training project
Proposed Framework for Entrepreneurship Education
Draft Concept Note for Discussion
I. Background: Why entrepreneurship education?
Despite registering a growth rate of 6.2 percent in 2008, amidst a global financial crisis, GDP
increase has not translated into a sufficient number of jobs to absorb the new cohorts of
Indonesian youth on the labour market. Indonesia faces an open unemployment rate of 8.39
percent and an underemployment rate of 27.8 percent,1 and 61 percent of unemployed
Indonesians are between 15 and 24 years old. Every year close to two million young women and
men enter the Indonesian labour market. A combination of lack of labour market opportunities
and lack of skills results in many young people being unable to secure a job in the formal
economy. Many of them end up working in the informal economy, but their productivity is
limited owning to inadequate preparation in schools.
Indeed, the fact that a large number of Indonesian students will end up making a living from the
informal economy is not fully reflected in the in-school and out of school learning and training
modules. Most of the schools in the country do not provide any entrepreneurship education that
youth would need to either start a business, join and increase the productivity of an existing
family business, or more generally develop a more proactive and entrepreneurial attitude in their
professional career.
The current theories on economic development include entrepreneurship education as an
important tool for the development of a vibrant micro and small enterprise sector. In Indonesia,
micro- small and medium enterprises (SMEs) contribute 53.6 of national GDP,2 and employ
more than 91.8 million people. Despite the role small enterprises play in the economy, many of
these businesses are unable to grow owing partly to lack of well trained human resources.
1
Trends of the selected socio economic indicators of Indonesia, BPS, March 2009
2
BPS

2. Encouraging entrepreneurial spirit among students and young people will not only contribute in
reducing unemployment, but will also help to boost productivity and competitiveness in the
SMEs.
There have been numerous attempts to conceptualize entrepreneurship education, but no
consensual definition has emerged so far. For the purpose of this note, entrepreneurship
education means “within the framework of lifelong learning, the process of providing individuals
with the concepts and practical skills to recognize opportunities, marshal resources, and possibly
initiate and manage a business.” The definition includes entrepreneurship education aiming both
at business creation and at improving the student attitude towards his/her professional life.
Entrepreneurship education is viewed as part of a lifelong learning process in order to ensure that
individuals can progress coherently in acquiring entrepreneurial competences and improving
their entrepreneurial attitudes within and outside the education system.
Limits of entrepreneurship education should also be noted:
• Not everybody can become an entrepreneur. Entrepreneurship education aims both for
individuals at becoming entrepreneur and entrepreneurial. It is not aimed exclusively at
business creation. The aim is also to foster attributes like creativity, autonomy, and initiative
in an individual (as part of life skills).
• To be effective in terms of business creation, entrepreneurship education should be
accompanied by a strong component of after training support / coaching / mentoring and/or
linkages with business development services.
• To maximize employment opportunities, entrepreneurship education should be part of a
broader focus on strengthening micro and small enterprises in Indonesia, in conjunction with
efforts to improve the business environment.
This note is divided in six parts. The second part describes the main initiatives being
implemented so far in the country in entrepreneurship education. The third part attempts to draw
preliminary lessons from this experience, and the fourth part list seven policy recommendations
for a comprehensive entrepreneurship education framework in Indonesia. The fifth and the sixth

3. parts make further recommendations for respectively the training of teachers, and monitoring
and evaluation.
II. Outline of current entrepreneurship education system in Indonesia
A. Entrepreneurship Education in Vocational Secondary Education (SMKs)
The Ministry of National Education (MONE) has been implementing entrepreneurship education
since 1994 in Vocational and Technical Secondary Schools. The introduction of entrepreneurship
curricula at the vocational secondary schools was seen as an opportunity to combine
entrepreneurship learning with technical skills in order to encourage students to become
entrepreneurs. In addition, many SMK schools are implementing a “Production Unit” which is
an actual business unit run within the school to generate income for the schools and to provide
students with a first work experience. It is to be noted however that most students do not get
involved in the business aspect of the “Production Unit” but focus on practising their vocational
skills. The Directorate of SMK development (PSMK-MONE) has also initiated an extra
curriculum activity for entrepreneurship, whereby selected school students benefit from (a) a one
week intensive business start up course (with ILO Start Your Business training package), and (b)
start up capital for a group based business in the school.
B. Entrepreneurship Education in the Polytechnic System

4. In the polytechnic system, ASPI (The Polytechnic Association of Indonesia) is implementing the
Entrepreneurial Skills Development Project (ESDP) which funded by NUFFIC of Netherlands.
The project aims, among others, to mainstream entrepreneurship through the development of
entrepreneurship curricula and the establishment of Entrepreneurship Training Units (ETU). The
entrepreneurship curricula is developed by TRIODOS FACET, drawing on ILO’s Know About
Business training package, the ILO Business Games and GTZ’s CEFE package. The
International Training Centre of ILO in Turin is
providing technical assistance for the
Ministry Of National Education – ILO
establishment of the ETU. Entrepreneurship Education pilot projects
at a glance
C. Entrepreneurship Education in Higher The ILO worked with the Ministry of National
Education, particularly, the Directorate of
Education Vocational Secondary Education since 2002
through a pilot test of Start Your Business
Several state and private universities have been
Programme (SYB). The SYB has now been
using entrepreneurship curricula as a mandatory used across Indonesia, and a network of SYB
trainers is available in eight provinces.
subject for one semester. In addition to this,
In 2005/2006, MONE and ILO introduced
since 2007 the Directorate for General of Higher the Know About Business (KAB)
Education provides selected universities with entrepreneurship training programme in the
vocational and technical secondary education
funds to assist students to start their businesses. system in Indonesia on a pilot basis. Indonesia
joined the group of 30 countries using the
KAB training package. To ensure the
D. Entrepreneurship Education in sustainability of the project as well as national
ownership, the ILO has enhanced the capacity
Vocational Training Centers. of Vocational/Technical Education
Development Centres (P4TK) in providing
Several state vocational training centers (BLKI) entrepreneurship training. 33 Master trainers
such as BLKI Lembang, Bekasi, BLK Lombok, from Six P4TKs are currently using KAB as
part of their regular institutional training
and South Sulawesi have been using the Start programme.
Your Business curricula for students who are
interested in starting their business. For
example, BLKI Lembang introduced the Start Your Business program for the agriculture sector
while BLKI Bekasi used the SYB programme for their students who were being considered for
jobs in Japan.

5. E. Entrepreneurship Education for out of
School Youth The ILO Start and Improve Your
Business Programme
The entrepreneurship education for out of school
youth is mostly aimed at assisting young people to The Start and Improve Your Business
programme is subdivided into three: i)
start their own business. The government is actively Generate Your Business Idea, ii) Start
Your Business, iii) Improve Your
promoting programmes to stimulate the creation of Business. The SIYB programme has been
new businesses for youth. For example, the Ministry implemented in more than 90 countries
with more than 80 Master Trainers and
of Youth and Support under the Deputy Minister for 4,500 Trainers. It has a strong quality
assurance system, with a centralised
Entrepreneurship has been actively promoting certification body at ILO International
entrepreneurship targeting youth in rural areas. The Training Center in Turin. In Indonesia, the
programme was introduced in 2002 in
government provides financial support to institutions collaboration with the Ministry Of
National Education. Six master trainers,
who train youth on vocational and entrepreneurship more than 230 trainers and 35 partner
skills. In addition, start up capital is also provided to organizations are actively promoting and
implementing the SIYB programme,
assist youth to start their businesses. The Ministry of including KADIN and APINDO.
Cooperative and Small Medium Enterprise has
similar schemes such as the Youth Entrepreneurship
Programme through Cooperative Movement and Agro-business. The Director General for PNFI
of the Ministry Of National Education is also in the process of integrating entrepreneurship
education in the training institutions for out of school youth. It is aimed at providing students
with entrepreneurship attitude, skills and knowledge.
F. Entrepreneurship Education adapted to specific groups.
The migrant workers organizations and BLK Malang have been implementing the SYB
Programme targeting domestic workers who have returned from overseas. The training also
includes members of the migrant workers’ family. In total, there are 39 SIYB trainers working
with organizations supporting migrant workers and their families to make use of their saving
productively. KSBSI Aceh is using the SIYB Programme to provide support to their members
who will retire or are expected to be laid off. In Surabaya, UKM Center of Dinas CSME trains
retired workers of one of the cigarette company on SYB to enable them to start their business
using their saving or severance payment. Several Business Development Services Providers also

6. use SYB programme training prisoners who will be released from detention. There are also
examples of Business Development Services Providers marketing entrepreneurship education in
drug rehabilitation centres including for people living with HIV&AIDS. In Papua, ILO has been
working with provincial and district Governments to train Papuan communities, also relying on
local traditions (adat).
III. Lessons Learnt
These are the main lessons learnt from entrepreneurship education initiatives in Indonesia:
• Need for an overall framework with specific responsibilities - There has been a lot of
emphasis on developing and upgrading entrepreneurship curricula. For example, PSMK (the
Ministry of National Education Directorate for Vocational Secondary Education
Development) has been revising its entrepreneurship curricula every four years (1994, 1999,
2002 and 2007). ILO has also helped by adapting and piloting international training modules.
However, fewer resources were used for rolling out the training for teachers and instructors,
as part of a comprehensive plan. Most entrepreneurship education activities were so far
initiated by the Central Government, while only few provincial and district Governments
contributed financially in teachers training.
• Entrepreneurship education requires a paradigm shift in teaching methodology - In those
cases where training of individuals was student centred and accompanied by coaching
support, and linkages with the private sector, a greater impact was noted in terms of: (a) use
of interactive and practical approaches, (b) number of students considering opening a
business in the future, (c) number of students able to establish a linkage between their current
learning and future occupations.
• Youth need more assistance in formulating a business idea, encouragement and
motivation, while adults need more assistance in terms of business management (source
SIYB evaluation in Aceh).

7. • In school entrepreneurship education works better with an all school approach -
Experience has also shown that it is important to train teachers along with the school
principals, education inspectors, parents committees, and/or a representative from the private
sector in order to implement a successful and dynamic entrepreneurship module.
• An integrated approach namely access to practical skills training, business management
knowledge and access to financial institutions is an effective approach for business
creation - The Start Your Business Impact Assessment in Aceh 2007 found that around
41.5% of total respondents started a business (27%) or an income generating activity
(14.5%). Challenges faced by most of the respondents in starting their business included
attracting customers, getting raw materials, managing finances, and access to external
finance. The involvement of Business Development Services was directly linked to the
sustainability of the micro-enterprises.
IV Seven Proposed Policy Priorities for Entrepreneurship Education
o Ensure political support across ministries and throughout provinces and districts for
entrepreneurship education as a key competency for all Indonesians, as part of a
comprehensive policy to reduce under-employment, and provide support to micro and small
enterprises. This wide based political support should result in
sustained and coordinated funding for the programme,
a generic enterprise education model to be customized with cultural differences at
provincial level.
o Set up clear goals of what is to be achieved, through lifelong learning process including for
in-school and out of school youth, for dismissed or retrenched workers, with related budget
and impact indicators. Practical incentives are needed, particularly since schools and teachers
have a greater autonomy under the current system (Kurikulum Tingkat Satuan Pendidikan). It

8. is important that the school management and teachers are convinced about embarking on
these activities and that school environment is favourable to entrepreneurship education.
o After a review exercise of past experiences and based on agreed competencies (see draft in
annex 1),
recommend curriculum as part of SMP (Junior High School), SMA (General
Secondary School), SMK (Vocational Secondary School) and out of school youth,
and for retrenched / dismissed workers,
review how entrepreneurship can be mainstreamed within existing subjects;
o Set up innovative public - private partnerships with (a) training providers, (b) enterprises
wishing to sub-contract part of their production / distribution, and (c) trade unions (for
workers education). As part of the same recommendation, it is important:
To recruit participating agencies for entrepreneurship for out of school based on their
performance and capacity rather than on their status (PKBM, LSM, private..);
to recognise and maximize the role of educators other than teachers (parents,
practitioners, entrepreneurs, students themselves);
establish incentives for companies contributing time and resources to enterprise
education,
attach students to real companies and to business people, in order to ensure a close
mentoring / coaching relationship with business practitioners.
o Build the capacity of entrepreneurship teachers and decide on a certification system for the
same. Capacity building of teacher should focus on learning by doing. It should not be
limited to one time training but include coaching and after training support, secondment to
small companies and study visits to successful schools in order for teachers to truly engage,
and develop their competencies. The role of educators is conceived as
providing an environment allowing the individual to feel empowered to take risks,
facilitating the change of attitude among student towards a more dynamic approach
to the world of work and his/her own professional life.

9. o Establish within a P4TK one or more decentralized Units for Entrepreneurship Education,
with provincial focal points in charge of:
stimulating innovative ways to deliver entrepreneurship education through targeted
block grants,
carrying out tracking studies and documenting impact,
documenting, validating and disseminating specific lessons learned through online
communities of practice,
granting the label “entrepreneurial school” to schools having shown remarkable
achievements.
o Support school business projects and business incubators, in partnership with the private
sector, whereby students are involved in concrete business activities both at production and
management level (with due care for Occupational Safety and Health concerns), giving due
recognition of their performance through marks and competition.
V Proposed Teachers Training and Certification
Qualified master trainers are a key factor for the effectiveness of entrepreneurship education in
the country. Using the ILO experience, it is proposed to have three level training systems to
create a pool of experts on entrepreneurship education. These are 1) master trainers, 2) key
facilitators and 3) facilitators (teachers). Each will have to be trained and supported with
coaching and regular skills upgrade trainings, to carry out their respective tasks. The proposed
tasks for each are as follows:
a. The role of master trainers in P4TK should be:
- to ensure that key facilitators are using student centred teaching methods when conducting
entrepreneurship training to teachers.
- to establish innovative teaching methodology on entrepreneurship education for classroom
and extra curricula.

10. - to collect good practices on the effectiveness of entrepreneurship education, and to
disseminate them through various medias.
b. The role of key facilitators at provincial level:
- to promote entrepreneurship education training programme for schools and teachers and
market the programme to provincial/national government.
- to train teachers on entrepreneurship education using students centred learning activity.
- to provide after training support to teachers such as new teaching skills on entrepreneurship,
coaching, etc.
c. The role of facilitators/teachers
- to implement student centred learning activity in their classrooms.
- to conduct regular monitoring on student satisfaction who participate in the entrepreneurship
education programmes.
- to motivate students to establish student business club, etc.
According to the government regulation No. 74/2008, there are two ways of acquiring
certification for teachers, namely: 1) competency test through portfolio assessment, and 2) direct
certification for those who have postgraduate and doctoral degree.
The assessment of portfolio covers 1) academic qualification, 2) training and education, 3)
teaching experiences, 4) learning plan and implementation, 5) assessment from supervisor and
superintendant, 6) academic achievement, 7) professional achievement development, for
example, conducting a research, 8) participation in the workshop, 9) organizational experiences
related to education and social issues, and 10) awards relevant to the education. These
components of the portfolio cover four core teacher competencies namely 1) Pedagogic
competency, 2) Personal competency, 3) Social competency, 4) Professional competency.
Each year, the Ministry Of National Education sets a target for teacher certification which covers
all teaching subjects. Teachers working on entrepreneurship should be encouraged to register

11. themselves for certification. Their participation in the international entrepreneurship training
such as KAB and SYB will contribute to give them higher scores.
No Component of portfolio Proposed criteria for certification of entrepreneurship
teacher
1 Academic qualification Teachers should have minimal academic qualification as
- Diploma IV or S1 required. MONE may need to assist teachers who do not
have the current minimum academic qualification to obtain
at least Diploma IV qualification.
2 Training and education Teachers must participate in entrepreneurship training
programme focusing more on modern teaching methods.
The KAB Training programme may be used as reference
for teacher training institutions.
3 Teaching experience NA
4 Learning plan and School principals/ management ensure that the teachers
implementation prepare learning/session plan using modern teaching
methodology.
5 Assessment from There are two areas which can be assessed related to the
superintendants and teaching style. Superintendants and schools principals can
schools principals play an important role to review entrepreneurship teachers
on:
- Teaching innovation and creativity on
entrepreneurship.
- Communication skills.
- Networking skills with businesses and associations.
6 Academic achievement - Score may be given if teachers are able to assist
students winning skills competition on entrepreneurship
7 Professional Achievement - Teachers should be encouraged to write articles in
newspaper on success stories on entrepreneurship
- Teachers should be encouraged to conduct research on
entrepreneurship

12. 8 Participation in the - Encourage provincial/district education office to make
workshop regular knowledge sharing workshops on
entrepreneurship.
9 Organization experiences - Encourage teachers to establish or participate in the
related to education and Association of Subject Teacher (Musyawarah Guru
social issues Mata Pelajaran)
- Encourage teachers to establish business clubs on
entrepreneurship.
10 Awards relevant to the NA
education subject
6. Monitoring and Evaluation
In order to guarantee a rapid and sound development of the Entrepreneurship Education, it is
proposed to establish a standard system for Monitoring and Evaluation, to allow national and
provincial decision makers, schools management, teachers and others to assess its impact and
adapt the strategies accordingly. The proposed indicators are summarized in the following
matrix.
Programme Performance Indicators
Focus Students Key Facilitators (P4TK,
Schools
LPMP3)
Number of students Number of trained Number or provinces
receive entrepreneurship teachers on where a key facilitator is
education programme entrepreneurship available
education
Number of students Number of key
Scale participate in the Number of teachers facilitators working on
students run enterprise attaining teacher entrepreneurship
3
Lembaga Penjamin Mutu Pendidikan (Education Quality Assurance Body)

13. certification education programme
activities
Number of provinces
where
entrepreneurship
education is available
Students’ satisfaction Schools’ satisfaction Teachers satisfaction
with services provided with the availability of with training and after
by teachers and school services and materials training support
Quality satisfaction. provided by key
Students’ satisfaction
facilitators
with materials produced
(business games,
textbook, workbook)
Students attitude Percentage of schools
Impact changed change to conducive
Personal Entrepreneurial learning environment
Competencies improved
Transition from
education to work
facilitated and applied
Cost per teachers Cost per
Cost-effectiveness (training, after training organisation/facilitator
and certification) linked to a measure of
linked to a measure of impact
impact
Percentage of teachers National systems for
Sustainability and schools actively quality control,
implementing student continuous support and
centred learning training of facilitators

14. Continuous support from
provincial/national
government
Tools used for monitoring purposes may include Focus Group Discussion with students to
review pre and post training entrepreneurial attitudes, evaluation of the teaching process
(preparation, methodology, students participation..).

15. Annex 1 Proposed Entrepreneurship Competencies by Target Audience
Target audience Key Competencies Modules piloted in For immediate
Indonesia action
SMP Know about role of
enterprises and
entrepreneurs in
society
SMA - Demonstrate Modified Know - To develop
entrepreneurial About Business. curricula as part of
characteristics the life skills,
- Understand skills career guidance,
required to start a or local content.
business - To provide
continuous
capacity building
for teachers
particularly in
developing
conducive
learning
environment.
- To link schools
with the private
sector.
- To link schools
with Business
Development
Services Providers
SMK • Demonstrate a Know About Business - To provide

16. dynamic continous capacity
entrepreneurial building for
spirit teachers
• Demonstrate particularly in
understanding the developing
structure of conducive
business planning. learning
environment.
- To link schools
with the private
sector
- To link schools
with Business
Development
Service providers
for future interest.
Higher Education - Demonstrate a - To develop pilot
skill to translate modules using
problems into hands on practical
acceptable learning for
opportunities. students.
- Able to apply - To provide
principles of continuous
human relation training for
management lecturers in
- Demonstrate developing
application of hands-on practical
technical skills in learning
entrepreneurial environment.
context - To build stronger
- Is able to design a cooperation

17. business plan between
universities and
business
communities,
particularly small
and medium
enterprises.
- To develop
business
incubators.
Out of school - Understand - GET Ahead4 - To enhance the
entrepreneurial - Generate Your capacity of
characteristic Business Ideas business
- Understand skills - Start Your development
required to start a business services on
business. - Improve Your entrepreneurship
- Understand and Business and business
demonstrate skills management
required to training
improve a programme.
business - To define
- Is able to develop certification
business plan process for
trainers/instructors
in cooperation
with Badan
4
GET Ahead is a training package for poor women engaged in or wishing to start a small-scale business. It differs from
conventional business materials as it highlights entrepreneurial skills from a gender perspective. GET Ahead aims to strengthen
the basic business and management skills of trainees. It shows women how to develop entrepreneurial skills and to obtain
support through groups, networks and institutions dealing with enterprise development. Please contact ILO Jakarta for more
information.

18. Nasional
Sertifikasi Profesi
(teh National
Body for
Professional
Certification) and
Ministry of
Cooperative and
Small Medium
Enterprises.
- To build stronger
cooperation with
the NGOs and
private sector5 for
better outreach.
- To establish
linkage with
financial
institutions –
explore the
possibility of pool
funds for credit
guarantee for start
up businesses
owned by youth.
5
For example with Indonesia Business Link, British Council, Sampoerna Foundation, etc.