Improving talent, encouraging entrepreneurship and skilling Indonesians

indonesian-entrepreneurs-pic

indonesian-entrepreneurs-picIndonesia has faced major economic issues in recent years, but there’s an emergence of young business and entrepreneurial leaders.

The nation’s GDP has been growing an average of 5-6% in the past 10 years, with the new Government planning to boost spending on infrastructure, education, and health to bring growth up to 7%.

Positioned to be the largest economy in SE Asia

Combined, the ten economies of the Association of South East Asian Nations (ASEAN) more than tripled in size between 2003 and 2013, and they are on track to continue their strong growth through 2020.

The extensive market of 600 million is integrating as Government’s continue to invest in the ASEAN Economic Community (AEC) goals – the free flow of goods, capital, and labour. Indonesia is a key player.

According to BCG’s Sustainable Economic Development Assessment, Indonesia has proven to ‘convert wealth into wellbeing of its citizens’ achieving this through improvements in health, education, and income equality.

However, improving talent and upskilling Indonesians is one major area that requires improvement.

An enormous skills gap on the horizon

While all is well with economic growth, there’s major skills gaps at all levels and the lack of college graduates is a real problem.

Although the Indonesian Government has made improvements in education recently (97% of all citizens now completing primary school), only 23% continue to a tertiary level.  By 2020, this will lead to only 56% of companies having qualified managers.

Experts believe that to have a skills base required for an ‘innovation-driven’ economy, there needs to be a focus on making higher education more financially accessible to economically disadvantaged students.

Entrepreneurship pushes economic growth.  However, Indonesia is only beginning to encourage those who dream of having their own businesses.  By supporting visionary, entrepreneurial youth, it could potentially help to lower your unemployment rate.

10% of Indonesian’s are people with disabilities

We interviewed Suri Filan from DNetwork, a not-for-profit initiative to help Indonesians with disabilities.  The network aids 10% of the country’s population who have a disability, placing them into jobs.

Originally built by the families with loved ones involved in the Bali bombings, DNetwork focuses on three core activities:

  1. Job Board: In the Job Board of DNetwork, users will find job offers from other community users and companies
  1. Courses & Events: They also provide information about courses and events for qualification development to users
  1. Business Directory: Users can access services that are offered by entrepreneurs with disabilities.

Local regulations require businesses to hire one disabled person per 100 employees.  Suri believes this is a positive move,

“Our work is just as much with companies as it is with our users

.  We have to convince them that our people can work.  In their eyes, disabled people may cost more and we show them that our users work properly.”

The network currently has approximately 500 users.  They help place people with disabilities in roles such as hospitality, admin, call centres, spas, and hotels.  DNetwork is a unique organisation, especially because Indonesia doesn’t have a disabled support system in place such as Australia.

Youth unemployment at 21.6%

Nearly a quarter (21.6%) of Indonesia’s youth are unemployed.  There’s a major shortage of skilled labour, due to migration of skilled workers to other countries and the lack of capacity to provide training.

Training programs that are available are often out of date, and do not meet the needs of the market with training not accessible by all levels of the community.

As a result, the Government is making formal commitments to improving standards of vocational education in Indonesia.  These reforms include improving teacher training and increasing accountability.  This will, in turn, help to improve organisations struggling to attract and retain key talent.

Education has become a priority and 20% of the Government’s budget is dedicated for education.  TVET UK has signed a Memorandum of Understanding with the Indonesian Ministry of Education and Culture to help improve standards of vocational education in Indonesia and meet the needs of industry.

Indonesia has all the parts to complete the training, employment and entrepreneurship puzzle.  In the past 15 years, Indonesia’s gross national income per capita has risen from $560 to $3,374.  With steady performance already happening, introducing innovative workforce development strategies and ensuring more youth continue onto tertiary education could take the country to an entirely new, global level.

To invest in education and entrepreneurship in your country, region, or TVET system contact Wendy Perry via wendy@workforceblueprint.com.au.

December 2016

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