Bridging the Gap between Education and Employability :
Indonesia’s Agenda on Development of Human Resources
Jakarta, March 𝟐𝟏𝒔𝒕 2017
Deputy Minister for Creative Economy, Entrepreneurship, and Cooperative & SMEs Competitiveness
Coordinating Minister for Economic Affairs
OUTLINE
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The Current Condition of Indonesia’s TVET
Indonesia’s Government Effort on handling the skill mismatch, Including Strong Coordination, Budget Changes and VET Institution and Mechanisms
Indonesia’s TVET Sector Priority
The Importance of PPP in developing TVET and Incentives For The Industry
< SD : 1.479.146 (21,04%)
SMP : 1.294.483 (18,41%)
SMA : 1.950.626 (27,74 %)
SMK : 1.520.549 (21,62%)
DIPLOMA I/II/III : 219.736 (3,12 %)
UNIVERSITAS : 567.235 (8,07%)
< SD : 51.445.972 (41,01 %)
SMP : 22.652.513 (18,06 %)
SMA : 22.364.039 (17,83%)
SMK : 13.690.816 (10,91 %)
DIPLOMA I/II/III : 3.635.855 (2,90 %)
UNIVERSITAS : 11.654.553 (9,29 %)
THE CURRENT CONDITION OF WORK FORCE IN INDONESIA
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Indonesia has a population of around 250 million people.
Working 118,4 million people
Unemployment 7 million people
Work Force Population
125,4 million people
Source: National Statistic Berau, August 2016
PROBLEMS OF TVET IN INDONESIA
** Data based on The Ministry of Industry (February 2017) *** Research by Lee Kuan Yew School of Public Policy (August 2016)* Data by the Indonesian Central Berau of Statistics (August 2016)
Unsuitable curriculum of TVET institutes with the skill demands of the industry
Obsolete training equipment
The low quality of teachers
Inadequate funding and the high cost on building and maintaining
and uneven distribution of TVET institution across Indonesia (around 60% locatedon Java and Sumatera Island).
There is a mismatch between the skills of workers and the skills needed by the industry, which is caused by several
reasons, among others*:
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CONFIGURATION OF REGULATIONS ON EQUITABLE ECONOMY IN SOME SECTORS THAT IS URGENT
Some assestments
and establishments
of new regulations
based on fairness is
needed to achieve
optimal efficiency in
sectors that give
impact in fulfillling
the needs of the
community
Land
Opportunity
HR Capacity
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B
C
Retail and Markets
Funding and
Government Budgets
Manufacture
& ICT
Fishermen &
Seaweed Cultivation
Urban Poor &
Affordable Housing
Plantation
Farming
(Landless Farmer)
Synchronize Social
Forests in to Agrarian
Reform
Vocation,
Entrepreneurship and
the Labour Market
Equitable Tax
System
CONFIGURATION
OF REGULATIONS
BASED ON
EQUITABLE
ECONOMY
• Establishment of LP2B to prevent farming land acquisitions by non-farmers
• Land consolidation for farm fields
• Research on seeds, post harvest utilities, synergies of logistics, the seed market, farming tools and
machinery and rice production utilities
• Social Housing• Housing financing• Land bank and affordable land prices• To enforce regulations on spatial regulations
• Data collecting and enforcement of palm oil land laws which includes data collecting of land banks• Data collecting and establishing regulations on replanting other plantation commodities• To corporate cooperations supported by the private sector and state enterprises to increase value• Support of research, market synergy, plantation off-taker, and the downstream value chain
• To develop industry based on natural resources and value chains• Minimize the gap between the interest for funding of large companies and small companies.• Protect certain market segments from integrated businesses and strong capitals
• Restructuring and data collecting of traditional/modern markets and traditional and modern stores• Regulate distance, location and zonation of modern markets and stores• Obligation to absorb local products• Fair access to the distribution system
• Improvement of the KUR system towards non-bankable funding
• Procurement program that is accessible for SME entrepreneurs
• Integration of fishermen and seaweed
• Aquaculture and the fishermen value chain
• Private investment for seaweed processing and off-takers
• Identification and priority for sectors, sub-sectors and flagship industries and professions
• Job matching schemes between the industry and VET
• Focus on skills, collaboration, flexibility and impact
• Early childhood intervention
• Progressive Tax, capital gain tax and unutilized asset tax
• Equitable government spending
• A fair distribution to access of land for all communities
• To determine priority receivers of TORA based on land gini ratio, poverty and land necessity.
• Development of land businesses with agglomeration and cluster methods
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Plans for Development of Human Resource Capacity - 1
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Create a mapping of profession demands and supplies that is linked and matched with
the industry:
i. Reclassify professions (KBJI) and businesses (KBLI) into GICS and ISCO
ii. Verify obsolete and prospective professions
iii. Prioritize professions and businesses that are prospective and have interesting
wages
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Create a VET Roadmap that is based on the needs of the industry, among others:
i. Man Power Planning
ii. Determine Government Priority Sectors
iii. Accelerate Drafting of Competency Standards
iv. Revitalize VET Institutes
v. Strengthen Accreditation Institutes
vi. Accelerate Certification and Recognition of Workers
vii. Create a Strong Job Market Information System
viii. Apprenticeship and Placement System for Workers
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Plans for Development of Human Resource Capacity - 2
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3 Development of VET, which includes :
a.Transformation for 60% of the workforce, among others:
i. Transformation of Subsistence Farmers;
ii. Transform Cleaners, Housekeepers, Baby Sitters and Caregivers;
iii. Transform Mining, Construction and Manufacture Workers;
iii. Transform General Clerks.
b. Government priority programs, among other:
i. The 35.000 MW electricity program.
ii. Land based programs.
iii. Program for 70.000 instructors in the farming sector.
c. Development of VET programs to support Industrial Zones and Exclusive
Economic Zones (EEC) to fulfill the demand of workers that are recruited
from VET institutes around these zones
Plans for Development of Human Resource Capacity - 3
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3 d. Program for sectors that have (i) Strong Companies and Industrial
Association, (ii) Good operating VET systems and (iii) Sectors with High
Labour Demand, among others:
The Health Sector;
Manufacture Sector;
Tourism Sector;
Transportation Sector.
Transformation of Labour in the Agriculture Sector
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Large farm between 2.000-20.000 Ha is planned through output and input: fertilizers, seeds and water pupuk, bibit, water availability and post harvest technology to
create an efficient production line. Efficient farm size for all commodities must also be noticed.
The Agriculture Sector has the largest workforce in Indonesia, but with a low welfare rate. Transformation into a subsistence farmer needs to be done to
increase welfare.
Subsistence Farmers
(28.985.183 people)
Market Oriented
Skilled Farmers
Convert from Aid
Programs into the rights to
choose program in order
to create seed, fertilizer,
farming machines (dryer
and crusher) and
sparepart markets and
also repair shops
Farming based on Agri-business values
Farm Input
Suppliers
Farmers
(Production)Harvesting Collector
MerchantFood
Processing
Wholesale
and Trade
Seed
Fertilizers
Machinery
Tools
Drying
Crushing
Sorting
Retailer
Consumer
Converstion to all agribusiness values especially farm input suppliers and harvesting
Farmers with extra
skills
Construction
Worker
Transform into the
Manufacture Sector
High Labour
Intensive Agriculture
Carving Craftmanship Drawing Creative Industry
Permanent Construction Worker
Temporary Construction WorkerTraining Standarization Specialization
Migrate to urban/ industrial locations
Migrate to fruit commodities/ horticulture
Shifting from low labor intensive farming to high labor intensive horticulture or
fruit farming
Enhancing labour competance is done through apprenticeship at companies. Currently there are 2660 companies that have joined
this program.
MoU Between The Ministry of Manpower and The Indonesian Chamber of Commerce
About the Development of Labour CompetenceApril 26, 2016
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The purpose of the MoU is to produce a knowledgable, skillfull and a good working attitude human resources
which is suitable for the needs of the industry.
MoU between 5 MinistersAbout The Development of Vocational Education which
is linked and matched with the industryNovember 29, 2016
MoU between 49 companies with 219 Vocational High Schools
In the East Java Province
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RECENT POLICIES ON TVET
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DEVELOPMENT OF INDONESIA’S HUMAN RESOURCE CAPACITY THROUGH DEVELOPMENT OF TVET
• Those programs in government work plan emphasize (i) the transformation of around 60%
of our workforce into a more skilled and competitive labour (ii) supporting workforce
involvement on government priority programs, such as infrastructure, tourism, energy (iii)
utilization of the workforce in supporting development industrial and Exclusive Economic
Zones and (iv) increasing the role of workforce to the sector that already have strong
companies and industrial associations.
• To successfully implement these programs, coordination between stakeholders must be
done. Through coordination between government institutes and the industry, each sector
would then have grounds to create an effective and efficient budget plan and strategy in
development of the TVET system.
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• Currently the government has focused on development of Indonesia’s human resource
capacity through coordinating government institution in facing the 2018 government work
plan. The work plan should include the program of TVET revitalization system.
THANK YOU