Mis­match be­tween skills, jobs in In­done­sia

The Phnom Penh Post - - OPINION -

OF THE key eco­nomic data an­nounced by Sta­tis­tics In­done­sia (BPS) on Mon­day, the 5.17 per cent eco­nomic growth for the third quar­ter, which had been ex­pected, caught the most at­ten­tion of the mass me­dia. Yet what we find most con­cern­ing is the large num­ber of vo­ca­tional school grad­u­ates among the seven mil­lion un­em­ployed.

The fact that vo­ca­tional school grad­u­ates com­prise such a large pro­por­tion, 11.3 per cent, of the un­em­ployed, as against eight per cent of high school grad­u­ates and 12 per cent of uni­ver­sity or col­lege grad­u­ates, the re­main­der hav­ing only a ju­nior high or ele­men­tary ed­u­ca­tion, shows a glar­ing mis­match be­tween labour-mar­ket de­mand and the skills avail­able.

This is quite wor­ri­some be­cause as the world and the na­ture of work are in­creas­ingly re­shaped by tech­no­log­i­cal changes, skills de­vel­op­ment and hu­man cap­i­tal will play an even greater role in our fu­ture eco­nomic de­vel­op­ment. The In­done­sian gov­ern­ment re­alises that one of the most ef­fec­tive ways of ad­dress­ing the skills gap is by mas­sively ex­pand­ing vo­ca­tional ed­u­ca­tion and has ac­cord­ingly spent more on de­vel­op­ing vo­ca­tional train­ing in­sti­tutes.

But the high level of un­em­ploy­ment among vo­ca­tional school grad­u­ates ap­pears to in­di­cate that many of the train­ing cen­tres are in­ade- quately equipped and their cur­ric­ula do not pro­vide the kind of skills de­manded in the labour mar­ket.

The ex­pe­ri­ence of many other coun­tries in the Asean re­gion show that im­proved ac­cess to bet­ter vo­ca­tional ed­u­ca­tion can con­trib­ute greatly to higher in­come for work­ers and help bridge the skills mis­match that causes what econ­o­mists call struc­tural un­em­ploy­ment whereby job va­can­cies can­not be filled by the skills avail­able.

Stud­ies by the World Bank and Asian De­vel­op­ment Bank on em­ploy­ment have con­cluded that what is acutely lack­ing in In­done­sia is well­tar­geted vo­ca­tional ed­u­ca­tion. If the skills pro­file of the hu­man cap­i­tal does not evolve along with the de­mands of the labour mar­ket, a skills mis­match will con­tinue to be a ma­jor ob­sta­cle to re­solv­ing un­em­ploy­ment prob­lems.

Look at how many firms, no­tably for­eign con­struc­tion firms that have to meet tight build­ing sched­ules, are forced to bring more ex­pen­sive work­ers from overseas. In fact, the ed­u­ca­tion and skills mis­match in jobs poses press­ing chal­lenges for lo­cal cor­po­ra­tions in ex­pand­ing their busi­ness.

We think bet­ter com­mu­ni­ca­tion and in­for­ma­tion ex­changes among lo­cal labour of­fices, busi­ness as­so­ci­a­tions and the In­vest­ment Co­or­di­nat­ing Board (BKPM) would al­low vo­ca­tional schools and other train­ing cen­tres to keep up to date on the mar­ket de­mand for skills. We know that com­pa­nies that ap­ply for in­vest­ment li­censes from the BKPM are re­quired to sub­mit de­tailed plans on their em­ploy­ment needs.

Like­wise, job­seek­ers have also been en­cour­aged to reg­is­ter at their lo­cal labour of­fices. This data will en­able vo­ca­tional schools to de­sign bet­ter mar­ket-ori­ented train­ing pro­grammes. The whole process should be well-tar­geted, right the way from plan­ning to iden­ti­fy­ing the need for spe­cific skills. Tech­nol­ogy is chang­ing the skills that are be­ing re­warded in the labour mar­ket, vo­ca­tional schools must adapt.

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