The Government Supports the Involvement of Local Entrepreneurs in IKN Development and Investment
By: Syahnaz Savitri)*
The Indonesian government is committed to ensuring that the development of the new National Capital City (IKN) in East Kalimantan not only involves large investors and companies, but also provides significant opportunities for local entrepreneurs. The involvement of local entrepreneurs in large projects such as IKN development is very important, not only to support local economic growth but also to ensure the sustainability and relevance of the development carried out.
Local entrepreneurs play an important role in the IKN development ecosystem. First, they can speed up the development process with a deep understanding of local conditions, regulations and local culture. Second, the involvement of local entrepreneurs in this project has the potential to create new jobs, reduce unemployment and improve the skills of the local workforce. Third, they can strengthen economic sustainability by channeling income and investment into local communities.
Additionally, local entrepreneurs often have better relationships with communities and can be more effective in overcoming social and cultural challenges that may arise during the development process. This not only helps reduce social friction but also increases public acceptance of IKN projects. By integrating local entrepreneurs into large projects, the government can ensure that the economic and social benefits of IKN development can be felt by more levels of society.
The President of the Republic of Indonesia, Joko Widodo supports increasing the involvement of local entrepreneurs in IKN development. The President emphasized the important role of the East Kalimantan (Kaltim) Chamber of Commerce and Industry (KADIN) and the management of the East Kalimantan Indonesian Young Entrepreneurs Association (HIPMI) not only as subcontractors, but as main players in this project.
The General Chairperson of the East Kalimantan KADIN, Donna Faroek, said that there is a need for government involvement in increasing food security in East Kalimantan. Currently, the province still depends on food supplies from outside the region, such as Java and Sulawesi.
We will embrace our friends more widely to become not just sub-cons but main players. It is hoped that the government will help to make it easier for local entrepreneurs to be more involved in IKN development.
According to the East Kalimantan KADIN, there is great potential for developing agricultural land in North Penajam Paser (PPU) which has not yet been utilized optimally. It is hoped that the land area of around 13 thousand hectares can be managed better to support IKN’s food needs.
Deputy for Socio-Cultural Community Empowerment of the Archipelago Capital Authority (OIKN) Alimudin said that his party provided assistance to 796 local micro, small and medium enterprises (MSMEs) at IKN in welcoming existing business opportunities.
MSMEs are the ‘cornerstone’ (main pillar or support) of the economy in IKN. His party has assisted MSMEs. This year (2024) there are 796 MSMEs, last year (2023) there were 1,200 people who had been trained by his party.
According to Alimudin, assistance is carried out because MSMEs have an important role in supporting and maintaining the stability and economic growth of a country. Therefore, it is necessary to prepare them so that they can become the main players in the IKN Authority itself. He further said that empowerment is carried out not with a top-down approach, but by looking at the needs and potential of the community first.
Assistance is provided at IKN so that MSMEs have strong competitiveness in the market, with a focus on increasing skills, knowledge and local economic potential, so that they are able to contribute significantly to the economic growth and stability of the new National Capital.
The MSMEs fostered at IKN mostly come from the culinary sector, reaching almost 70 percent of the total MSMEs in the region, showing a strong focus on developing the food and beverage industry in an effort to support the local economy.
Even so, Alimudin revealed that the biggest challenge is changing the community’s mindset in facing the changes that will occur in IKN, because these changes require adaptation and readiness from all parties, both local residents and those who will move there. OIKN also trains and prepares local communities and indigenous communities to face the major transformation that will occur in IKN, by providing special training and mentoring.
The Ministry of Youth and Sports (Kemenpora) hopes that development in the Indonesian Capital City (IKN) can represent a new archipelago that is based on technology, but does not forget local culture.
Assistant Deputy for Youth Leadership at the Ministry of Youth and Sports, Andi Susanto, said the progress at IKN was truly encouraging. Of course, his party will look further into how the development of this IKN will represent a new Indonesia or archipelago that is based on technology and also does not forget culture. His party encourages the role of youth in climate change mitigation and cultural development activities in IKN. His party is also working with the Archipelago Capital Authority (OIKN) to mitigate the erosion of local culture in the development of IKN.
The involvement of local entrepreneurs in the development of IKN is very important to ensure that this project is not only technically successful but also provides broad economic and social benefits. The government has shown its support through various policies and programs designed to accommodate local entrepreneurs, reduce barriers, and provide necessary incentives.
By involving local entrepreneurs in IKN development, it will not only speed up the development process and reduce costs but also strengthen the local economy and improve the quality of life of the surrounding community. This support is a strategic step to ensure that IKN can develop into a center of sustainable and inclusive growth, providing long-term benefits for all Indonesian people.
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)* The author is an Economics student
