Indonesia’s Entrepreneur Ratio Remains Low, Trade Minister Pushes Franchise Expansion

Indonesia's Minister of Trade, Budi Santoso, revealed that the country's entrepreneur ratio still lags behind its neighboring nations. Currently, Indonesia's entrepreneurship ratio stands at 3.57%, lower than Malaysia and Thailand, which exceed 4%, and Singapore, which reaches 8.6%.

"To become a developed country, the entrepreneurship ratio should ideally be between 10-12%. Therefore, we must take strategic steps to boost entrepreneurship in Indonesia," Budi stated at the Indonesia Licensing and Franchising Expo (ILFEX) 2025 in Jakarta, Wednesday (March 12).

Budi emphasized that increasing the number of entrepreneurs is crucial to maintain economic growth and strengthen the national entrepreneurial ecosystem.

As part of the strategy, the Ministry of Trade continues to promote brand strengthening and local business expansion, particularly through franchise and licensing models.

The Potential of Indonesia’s Franchise Sector

Indonesia's franchise sector holds significant potential. According to the 2024 business activity report, the franchise industry in Indonesia has absorbed 97,872 workers with a total revenue of Rp143.25 trillion.

Out of this figure, 34,503 outlets are independently operated, while 17,786 outlets have been franchised. As of February 2025, the Ministry of Trade recorded 157 domestic franchisors and 154 foreign franchises operating in Indonesia.

"The food and beverage (F&B) sector remains dominant, accounting for 47.77%, followed by beauty services, non-formal education, retail, and other industries," Budi explained.

He hopes that this potential can be further developed through various programs and exhibitions that serve as promotional platforms for local businesses.

Apart from strengthening the domestic market, the ministry also aims to expand Indonesian brands into the global market. Several local brands have already successfully entered international markets, including Alfamart, Ayam Gepuk Pak Gembus, Kebab Turki Baba Rafi, Taman Sari Royal Heritage, and Roti Ropi from Klaten.

"We want Indonesian franchises and licensed brands to penetrate export markets and compete on a global scale," Budi concluded.

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