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Indonesia: Businesses told to bridge skills gap

The Jakarta Post, Jakarta, 2 December 2016 - President Joko “Jokowi” Widodo has called for businesspeople to be more involved in vocational training of the domestic workforce as many young graduates are having difficulties finding jobs because of a major skills gap.

During the Indonesian Chamber of Commerce and Industry’s (Kadin) national leaders meeting, Jokowi emphasized that the country should not take for granted its demographic bonus, in which productive-aged citizens will outnumber the elderly and children between 2025 and 2035.

Improving the quality of the country’s vocational training programs to suit the needs of the business world would be essential in shaping the impending demographic bonus into a workforce that could support Indonesia’s growth in the next decade, he added.

“We hope for Kadin’s involvement because it makes sense. The private sector knows best what it wants, not the regulator,” he said during his opening speech. “Cooperation in the vocational field is one of our biggest assignments because without an injection of training to improve their skills, our demographic bonus will find it difficult to compete with other countries.”

The reality that one in three young Indonesians remains unemployed for 12 months despite having a tertiary education reflects a mismatch between the skills that Indonesia’s youth possess and the skills that industries require, according to an Asian Development Bank (ADB) report.

Jokowi, a former furniture businessman, issued a presidential instruction that aims to produce skilled workers who can be properly employed by priority industries, namely the maritime, tourism, agriculture and creative industries.

The existing vocational education system, which amounts to 142 programs at present, has received criticism due to its mismatch toward private sector needs, with Jokowi saying that the teachers taught on a normative basis without being very hands-on.

Alas, the number of jobless vocational school graduates has increased over the last three years to 9.84 percent of the country’s unemployment rate in February this year, from 9.05 percent and 7.21 percent in 2015 and 2014, respectively, Central Statistics Agency (BPS) data show.

Kadin chairman Rosan Roeslani has appeared to agree that improving the country’s workforce needed to be a priority.

Kadin signed a memorandum of understanding with the government to help design vocational education training that was applicable and widespread following Jokowi’s trip to Germany, where he met with the German Chamber of Commerce, which plays a large role in vocational training.

“Vocational education is very important in order to contribute to a high quality and sustainable economy. This is something we must all do together,” Rosan said.

Indonesian Employers Association (Apindo) executive director Agung Pambudi said part of the problem in existing vocational programs was the lack of facilities and equipment available at schools due to the high investment needed to purchase them.

“How do we deal with this? One of the ways is to conduct a joint operation or facility so that vocational schools can work directly with the industries. Furthermore, vocational training centers owned by the provincial administration can be merged to improve facilities,” he said.

Currently Apindo is working with Kadin and the government to create a national apprenticeship movement involving 2,300 companies that will train and apprentice around 100 people each.

“A large and persistent skills gap in eight key growth sectors will undermine the country’s ambition of graduating into a middle-income country in the medium term,” read a recent report by JP Morgan and Singapore Management University (SMU) on skilled labor within Southeast Asian countries.

The sectors are agriculture, mining, energy, manufacturing, marine, tourism, telecommunications and the development of strategic areas.


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