MUHAMMADIYAH.OR.ID, YOGYAKARTA – Chairperson of the Indonesian Chamber of Commerce and Industry (KADIN) Arsjad Rasjid mentioned that the world may only recently be focusing on social enterprises, but Indonesia has been practicing this concept for over a century through Muhammadiyah.
“In global discussions, people often highlight social enterprises. However, social enterprises have existed for a long time in Indonesia, starting with the founding of Muhammadiyah. I truly admire Muhammadiyah for this achievement,” said Arsjad at the talk show and launch of the book “Bangkitnya Kewirausahaan Sosial di Indonesia: Kisah Muhammadiyah” (The Rise of Social Entrepreneurship in Indonesia: The Story of Muhammadiyah) and a talk show at Universitas Ahmad Dahlan (UAD) on Monday, January 13.
He pointed out that Muhammadiyah establishment was a significant milestone in Indonesia’s social enterprise movement. While the term social entrepreneurship was not yet defined back then, Muhammadiyah activities clearly reflected its principles.
Arsjad explained that Indonesia’s economic framework, shaped by Pancasila, strikes a balance between capitalism and socialism. It promotes mutual cooperation and shared responsibility, values that align perfectly with the core ideas of social enterprises.
“Pancasila economics is neither fully capitalist nor fully socialist. It focuses on mutual cooperation, a concept that resembles the foundation of social enterprises,” he explained.
Social entrepreneurship, according to Arsjad, is essential for Indonesia’s development because it addresses critical social issues while generating profit. This includes tackling economic inequality, improving access to healthcare and education, and addressing environmental challenges.
“What sets social enterprises apart from regular businesses or charities is the concept of profit for impact. It’s not just about making a profit but about using that profit to create meaningful change,” he said.
Unlike traditional charitable organizations, social enterprises reinvest their profits to grow and amplify their impact. Arsjad highlighted that Muhammadiyah approach embodies this model, making it a successful example of how to combine social responsibility with sustainable business practices.
