Policy brief: Indonesia's higher education system: How responsive is it to the labor market?
Indonesia is at a development crossroad. Its economy is now one of the largest 20 economies in the world, and it has ambitious plans of achieving high-income status and joining the G-7 by 2030. Yet the challenges it faces are daunting. Its status quo may not be enough to maintain current growth rates. Accelerating growth is therefore crucial to achieve the intended goals. The growing middle class and subsequent growth in the internal market, rapid urbanization, and the opening up of ASEAN markets bring both opportunities and challenges. A skilled labor force is crucial to leveraging these opportunities and higher education is the main provider of these skills.
This Policy Brief stresses the need for increasing access to higher education in Indonesia, and a greater prioritisation of skills training aligned with labour market needs. In light of this fact, four key recommendations are highlighted: a complete mapping of the demand for and supply of skills in different economic sectors, including cognitive, technical and non-technical (social and behavioral) skills; the development of the higher education quality assurance and accreditation system and process; greater autonomy in decision-making in higher education institutions, greater accountability, and incentives aligned with performance indicators; and the establishment of active forms of collaboration between higher education institutions and the private sector.