Indonesian government set to begin regulating startup incubator programs this month

The Indonesian government, through its Ministry of Cooperations and SME, has signaled its intention to begin regulating entrepreneurship and incubator programs for SMEs, including those in the tech industry. Regulation has been on the cards for some time and, according to officials, it will be introduced at some point this month.

Speaking to local media site Kontan, ministry representative I Wayan Dipta said details of the regulation will emerge this month.

“We’re still waiting the green light from the President,” he said, before stating that the regulation is crucial in order to legitimize all entities involved in business and technology incubators for Indonesian SMEs. “Currently we don’t have anything to further regulate this practice,” Wayan explained.

The government sees entrepreneurship and technology incubators as mediators that provide business mentoring, access to technology, access to market, as well as capital funding. For that reason, it says that regulation is required to oversee and protect local SMEs in preparation for the ASEAN free market.

Aside from incubators owned by private companies, the government is involved in the space, having partnered with four universities to establish entrepreneurship incubator programs for its students: the Bandung Institute of Technology for manufacturing, the Bogor Institute of Agriculture for agroindustry, the Brawijaya University for agro-business and the Surabaya Institute of Technology for creative technology.

The Indonesian Chamber of Commerce, through representative Budyarto Linggowiyono, stated that the proposed regulation is crucial as a framework for entrepreneurship and technology incubators.

“These incubators must be constrained with targets and benchmarks”, he added, expressing concern for Indonesia’s lack of export-value technology products.

Over the last year or so, we’ve noticed the number of incubators, accelerators and other programs aimed at encouraging new, startup business, grow significantly across Southeast Asia. With investors and industry folks from the US, Japan and other markets increasingly eyeing the region — and Indonesia in particular — as a market for growth, the introduction of government regulation is a positive one that we anticipate will help validate and authenticate programs.

Image of Indonesian flag via Aleksandar Mijatovic / Shutterstock