Indonesia’s startup ecosystem has achieved notable success in the recently unveiled APEXE Nations Report, a collaborative study by Startup Genome and the Global Entrepreneurship Network.
Released during the G20 Social Summit in Rio de Janeiro, the report introduces a groundbreaking framework for evaluating national startup ecosystems. Known as APEXE—Aptitudes and Policies for Exponential Entrepreneurship, the framework provides a data-driven analysis that captures the interplay of innovation potential, ecosystem performance, and policy effectiveness.
According to the report, Indonesia’s performance in converting innovation potential into entrepreneurial success surpasses expectations. Ranking 13th among G20 nations in the Lab-to-Startup Conversion metric, the country demonstrates an ability to extract value from its relatively modest Innovation Potential Score of 0.60.
Meanwhile, its Startup Ecosystem Score of 0.71—an aggregate of metrics such as funding, talent, and global reach, highlighting the nation’s growing entrepreneurial dynamism.
However, Indonesia’s overall APEXE ranking sits at 15th, reflecting room for growth in policy implementation and the scale of its innovation potential. With a Policy Score of 5, Indonesia performs respectably but falls short of regional leaders such as South Korea, which boasts a Policy Score of 7.
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A deep dive into Indonesia’s metrics
The APEXE framework evaluates startup ecosystems through several lenses. Among them, the Lab-to-Startup Conversion ranking is particularly insightful. It compares a country’s Startup Ecosystem Score against its Innovation Potential Score, revealing how effectively nations leverage their innovation capabilities. Indonesia’s relatively high conversion ranking suggests it outperforms in translating its modest innovation base into tangible entrepreneurial outcomes.
The Startup Ecosystem Score itself is multifaceted, encompassing factors such as:
Funding
Measures the availability of early-stage capital and the presence of seasoned venture capitalists.
Talent
Evaluates the ecosystem’s experience and technical expertise, such as the concentration of top developers.
Global reach
Tracks international expansion by startups.
Performance
Includes late-stage funding and the number of unicorns as indicators of ecosystem maturity.
Indonesia’s ecosystem excels particularly in global reach and performance, which underscores the country’s increasing integration into global markets.
The report positions Indonesia among other Asian G20 nations, providing a comparative perspective on its strengths and challenges.
China
Ranking 7th overall, China combines a high Startup Ecosystem Score of 1.02 with an Innovation Potential Score of 0.71. Its performance benefits from significant venture capital activity and global connectivity, though its ranking is tempered by the sheer scale of its GDP and population.
India
A standout performer, India ranks 4th in APEXE. Its Startup Ecosystem Score of 1.22 far exceeds its Innovation Potential Score of 0.53, reflecting its ability to scale startups efficiently. This success is driven by a high Ecosystem Value-to-GDP ratio and multiple ecosystems ranked in global top tiers.
Japan
Despite an impressive Innovation Potential Score of 1.22, Japan ranks 12th overall, indicating challenges in converting its resources into startup success.
South Korea
Ranking 5th, South Korea excels across most metrics, with high scores in both policy and ecosystem performance.
As mentioned, Indonesia, in comparison, demonstrates promise but lags behind these regional peers in policy impact and innovation capacity. Its Policy Score, for instance, highlights gaps in mechanisms such as entrepreneur visa programmes and tax relief for early-stage investors—tools effectively leveraged by higher-ranked nations.
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On the problem of policies and the path forward
The report underscores the pivotal role of policy in shaping ecosystem success. Indonesia’s score of 5 for policy reflects progress, particularly in fostering early-stage funding and startup support programs.
However, further enhancements could significantly boost its ecosystem. These might include expanding employee stock option schemes (ESOPs), improving visa accessibility for foreign entrepreneurs, and introducing fund-of-funds initiatives to catalyse venture capital activity.
While Indonesia’s overall Innovation Potential Score remains modest, targeted investments in research and development, as well as university-industry collaboration, could elevate its standing. By bolstering foundational elements of innovation, Indonesia could not only enhance its Startup Ecosystem Score but also strengthen its competitive position regionally and globally.
Indonesia’s performance in the APEXE Nations Report highlights a startup ecosystem that is greater than the sum of its parts. Despite limited innovation resources, it has leveraged talent and funding to build a globally connected and increasingly resilient entrepreneurial landscape.
Yet, the path forward requires careful alignment of policy and innovation to sustain and amplify this growth. By addressing gaps in its policy framework and investing in the broader innovation ecosystem, Indonesia has the potential to rise further in future rankings, becoming a more dominant player in the global startup arena.
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