BANDUNG, itb.ac.id – The director and also the CEO of Aren Energy Investment Pte. Ltd., Toronata Tambun said that many entrepreneurs or start-ups are not good in managing their business because they only focus on producing process. When it comes to the business success, ‘paying customer’ becomes more important. 

Those knowledge was delivered in Studium Generale KU-4078 session held in the West Hall of the Bandung Institute of Technology (ITB) on Wednesday (02/19/2020). The theme of the public lecture was "Innovation Driven Enterprise: An Approach Where ITB Plays a Pivotal Role in Escaping Indonesia from Middle Income Trap".

The man familiarly called Toro explained his material about the topic related to entrepreneurship and the role of ITB students in escaping Indonesia from the middle income trap with enthusiasm. There are often inaccurate hypes around innovation and entrepreneurship according to his experiences. For example is the notion that start-ups are dominated by young people, easy to succeed, etc.

In addition he also explained things related to the phenomenon of disruptive innovation. To date, public consider that disruptive innovation has the characteristics of turning previously expensive products into the affordable one, as well as simplifying a previously complex systems. However, disruptive innovation becomes essential not only because of that factor, but also because of its ability to create large employment and its great usage of capital as well. Basically, there are three types of continuous innovation, namely efficient innovation, disruptive innovation, and continuous innovation. "What is happening now is mostly efficient innovation which where capital flows are not distributed only in disruptive innovations, but continue to cycle around on efficiency," he said.

In addition, the mindset for start-ups funding is too narrow-minded as finding many investors as possible. In fact, what actually should be done first is to use your own resources. Investors will come automatically if there is already ‘paying customer’. Building a startup company is not an easy option either. In fact, only 1-7 percent of effective start-ups are successful in Indonesia. Many of them have to experienced ups and downs first to be able to become one of the successful pioneerer companies. "There is no such a short cut. My life becomes complete because I was befriends with failures and I actually am happy for getting them, because usually success comes later"explained the man once worked at the Schlumberger.

Based on a reseach, Toro explained that innovation is the result of invention multiplied by commercialization. Innovation roles as a basic modal in Innovation Driven Enterprise (IDE), one of the entrepreneurship models. Entrepreneurship can be found as a form of Small Medium Enterprise (SME) or usually known as UKM and IDE. SME contributes more in the local market, while the IDE contributes in the bigger one, the global market. Another differentiation between SME and IDE is that most of the SME activities are limited only to production and sale, while the IDE generates innovations for market products. While SME is a relatively easy and fast-growing business, IDE needs a long-term strategy because it takes 5-7 years to get a return on investment, even though the growth will be greater than SME in general. 

In development process of IDE, Toro explained, businessmen must implement what it is called by ‘work smarter’ rather than ‘work harder’. There are various strategies to be able to build a good IDE. But the most important thing is teamwork because the foundation of innovation-based company is laid on cooperation. A good innovation is impossible to be created by only a single person, as he said. He also reminded ITB students that in many cases, smart people often fail due to not being able to work in team. Many factors can contribute to those cases, like underestimate ability of others, find it difficult to work together, and get bored easily.

Businessmen developing the IDE also have to consider important roles of stakeholders involved. In the Innovation Ecosystem Stakeholder Model, there are five important roles of stakeholders involved, namely entrepreneur, risk capital, corporation, government, and university. Therefore, ITB as a university engaged in technology – even though innovation is not always exists in the form of technology - plays an important role in the IDE development, together with other universities specialized in other various field of studies.

There is a term known as ‘competitive advantage’ which are owned by each region or country. Competitive advantage is an ability to stand out from others region. That superior ability is called specialization. Capital owners always consider this competitive advantage when it comes to investing. For that reason, many investors are interested to invest their capital in Singapore known with its smart cities concept or in Chile known with its excellent mining.

As it said earlier, every country has its own leading sector roled as its competitive advantage. According to Toro, Indonesia has a competitive advantage in the field of Agriculture Technology and New Food, which also leads to tourism sector. So, the IDE development of indonesia is best to be prioritized in this field. "So the best idea (to be implemented) is agriculture, fisheries, shrimp cultivation, and livestock industries, but the question is, where is its technology will come from ? The one who should provide innovations and solution of this challenge is all of you, the ITB students. If the IDE is well-considered, for sure we will overcome the the middle income trap".

Translator: Karimatukhoirin