A recent World Bank report highlighted that Indonesia is currently facing a developmental crossroad. It has now grown to one the world’s 20 largest economies in the world and aims to be the top 10 largest economies globally by 2030; certainly bold and bodacious goals. Looking at growing major trends and developments not only in Indonesia but also the region – particularly a growing middle class, rapid urbanization, strong growth in the region and an opening up of regional markets in Southeast Asia with the Asian Economic Corridor (AEC) – this has resulted in new challenges as well as strong opportunities for Indonesia, especially in the country’s education sector.
Critical to be competitive
The World Bank believes that having a skilled labor force would be crucial to leverage on the country’s existing opportunities. The World Bank further adds,
“Without the right skills, opening up to ASEAN may pose a problem more than an opportunity [whereby] without the right skills or urban migrants, urbanization will not bring about the benefits of scale. [If youths don’t possess the right skills,] the growing demand for higher quality products and services may be met by importing them rather than increasing the value added of Indonesian firms.”
It is clear that for Indonesia future’s success, the country will need to have a serious look at improving its state of education – simplifying access to all levels of education and improved parity of graduate skills to its future labor requirements.
While general unemployment rates in Indonesia has been on a downward trend in recent years (ranging from 6-9& over recent years, and 5.9% in 2014), it is increasingly worrying to note that unemployment rate is highest among high school and higher education graduates (aged between 12 – 24 years old). In fact, the unemployment rate for those aged between 15 – 24 is alarmingly far above the national average. Fresh graduates from high schools, colleges and vocational schools are finding it difficult to secure a job in the national workforce. Read more