A year-long study by global financial services firm J.P. Morgan and Singapore Management University has revealed that Indonesia lacks skilled workers due to the huge gap between academia and industry.
The study found that educational institutions often do not train students to meet industry requirements. Indonesia’s key growth sector, information and communications technology, sees many graduates who lack skills applicable to the industry.
Indonesia has many low-skilled workers, but it is those with more skills who are needed to elevate the country’s economy.
J.P. Morgan and the SMU outlined country-specific recommendations for the Indonesian government and advised it to revise outdated curricula, improve consultations between schools and industries, provide appropriate infrastructure and qualified teachers to produce more industry-ready graduates.
According to the study, training graduates is not only the responsibility of the government and schools, but also of the private sector, especially large corporations. The study cites apprenticeship programs by companies such as Toyota Indonesia as a possible model.
The government is also urged to relax rules on the employment of skilled foreign workers in key growth industries to attract more foreign investment. It should also increase youth employment, as a young and dynamic workforce is one of Indonesia’s main assets. The unemployment rate among Indonesia’s youth currently stands at more than 18 percent.
SMU president Arnoud De Meyer said, Indonesia should leverage its young workforce as a competitive advantage and prioritize education and skills training – ensuring that there are sufficient numbers of qualified teachers and greater involvement by industry players, who can offer industrial apprenticeships and practical training for the country to achieve sustainable growth.