Indonesia, Southeast Asia’s largest economy, is sharpening its focus on workforce development to stay competitive in the digital era.

Recognising the pressing need for a skilled labour force, the government is spearheading transformative initiatives to bridge educational gaps, enhance digital competencies, and align training with industry demands.

A national imperative: closing the skills gap

Minister of Manpower Yassierli has underscored the pivotal role of human capital in shaping Indonesia’s economic resilience.

With a vast labour pool, the country holds the potential to become a global player in emerging industries. However, shortcomings in education and digital proficiency threaten to hinder progress.

To tackle these challenges, the government has made workforce upskilling a national priority. A major thrust of this effort is ensuring that education and training cater to high-growth sectors such as green jobs, medical technology, and digital industries.

These fields require expertise in artificial intelligence, data analytics, and sustainability – skills that Indonesia is keen to cultivate.

In 2024 alone, the government rolled out over 3,300 vocational training programmes aimed at equipping workers with practical, globally competitive skills.

Indonesia’s performance on the Human Capital Index lags behind its ASEAN peers, signalling an urgent need for better education and skills development.

While digital integration is on the rise, a significant portion of the workforce lacks proficiency in key digital skills. To address this, the government is expanding certification programmes aligned with international standards, enhancing both local and global employability.

A multi-stakeholder approach to workforce transformation

Recognising that no single entity can drive transformation alone, the Indonesian government has adopted a collaborative strategy.

The country is working to ensure training remains relevant to real-world job demands by fostering partnerships with educational institutions and industry leaders.

The Ministry of Communication and Informatics is at the forefront of digital skills development, with initiatives such as the Digital Human Resources Development Programme.

This comprehensive training framework spans from basic digital literacy to advanced specialisations in cybersecurity, AI, and big data analytics.

One standout initiative is the Digital Talent Scholarship, which equips participants with sought-after digital skills. Complementing this, the Digital Leadership Academy focuses on upskilling corporate and government leaders in digital transformation strategies.

Indonesia has also launched a Master’s degree scholarship programme in collaboration with domestic and international universities, aimed at fostering high-calibre talent and innovation in the digital sphere.

Communication Minister Budi Arie Setiadi has stressed the urgency of preparing graduates for the evolving job market, citing projections that by 2025, the global economy will require 149 million digital specialists.

Professions such as AI engineers, robotics experts, and database architects will be in high demand, making it imperative for Indonesia’s education system to integrate cutting-edge courses.

The urban-rural divide

A key challenge to workforce development is the urban-rural digital divide. To address this, the government is investing heavily in digital infrastructure, ensuring that remote areas gain better internet access.

Indonesia is enhancing connectivity, providing digital learning resources, and striving for a more inclusive labour market where opportunities are not restricted to urban centres.

Below are seven of Indonesia’s key strategies for workforce development:

1. Expanding vocational training. Over 3,300 programmes launched in 2024 to address skill shortages in emerging industries.

2. Developing digital talent. Flagship initiatives like DTS and DLA provide specialised training in high-demand digital skills.

3. Aligning education with industry needs. Universities and vocational institutions are encouraged to integrate AI, cybersecurity, and big data analytics into their curricula.

4. Strengthening certification programmes. Competency certifications aligned with global benchmarks enhance workforce mobility and employability.

5. Fostering industry collaboration. Public-private partnerships drive the development of training programmes that reflect real-world job requirements.

6. Investing in digital infrastructure. Expanding rural internet access ensures equal opportunities for education and employment.

7. Providing government incentives. Financial support and tax benefits encourage companies to invest in employee upskilling.

Indonesia is positioning itself as a formidable contender in the global digital economy by prioritising workforce development.

Through strategic partnerships, targeted upskilling, and infrastructure investments, the nation is laying the groundwork for a skilled, adaptable, and competitive workforce.

The road ahead is challenging, but with these concerted efforts, Indonesia is well on its way to unlocking its full economic potential.