Stronger Education Partnerships: Opportunities for Australian providers in Indonesia

Context

Indonesia has a significant need for education and training services.

It has a young and expanding population and one of the world’s fastest-growing economies, but is facing a widening skills gap as it develops critical infrastructure and prepares for the jobs of the future.

For many reasons, Australian education and training institutions are uniquely well placed to help Indonesia realise its education, skills and training aspirations.

Home to more than 260 million people, the majority of whom are under 30, Indonesia is the world’s fourth most-populous country, the biggest economy in Southeast Asia and one of the largest emerging economies in the world. With more than 50 million students attending over 250,000 schools, the World Bank ranks its education system as the fourth largest in the world, behind China, India and the United States.

Demand for education is growing.

Euromonitor predicts Indonesian education industry revenues to grow at a compound annual rate of 10.3 per cent between 2016 and 2025, by which time they will be worth US$118 billion.

To continue to accelerate economic growth, Indonesia needs to add 57 million people to its workforce by 2030.

Australia is well positioned to contribute to Indonesia’s human capital development.

Sector-specific Opportunities

Higher Education

Above: Total Student Enrolments at public and private higher education institutions – 2017.

Above: Number and types of tertiary education institutions.

  • Private higher education sector dominates enrolments.
  • College and academy institutions make up 70 per cent of total sector enrolments.
  • Private higher education institutions are predominantly small, have low enrolments, are expensive and varied in quality.
  • RISTEKDIKTI is turning its efforts to lift the quality of its higher education sector.

Vocational Education and Training

Above: Diploma Program enrolments in public institutions, 2017.

Above: Estimated annual number of additional skilled workers required per annum for key areas.

  • VET is a national priority for Indonesia’s government.
  • There is a large skills gap in the rapidly growing Indonesian economy.
  • The Indonesia Australia Comprehensive Economic Partnership Agreement (IA-CEPA) has placed vocational education and training as a priority in the partnership.
  • VET providers often leverage short-term contracts into ongoing commercial relationships.

English Language Training

  • English language tuition is considered to cut across all sectors, as it is an important bridging program that supports higher education, VET and schools.
  • From a regulatory and governance point, it aligns more with the VET sector, with some overlap with schools and higher education.

Schools

Above: Map of SPK schools (formerly known as international schools) by province, showing SD (sekolah dasar / primary schools), SMP (sekolah menengah pertama / middle schools) and SMA (sekolah menengah atas / high schools).

Above: Number of Students, Schools and Teachers in Indonesia 2017-18.

  • Indonesia’s school system is large, but there are issues with quality, in teaching and teacher training.
  • There are opportunities for foreign organisations to be involved in Joint Cooperation Schools (SPK), but Australia has relatively small presence in this sector.
  • There are many low-level partnerships between Australia and Indonesia in the form of sister schools and alumni networks.
  • In the current regulatory environment, the most likely Australian involvement would be in the form of a state-led drive to provide curriculum, evaluation and perhaps certification in a licensing arrangement.

EdTech

  • Internet reach in Indonesia is increasing rapidly, and EdTech is a growing sector that has attracted attention from international players.
  • Government of Indonesia is emphasizing online learning to improve access to HE for those in remote areas.
  • EdTech could complement Australian providers’ offerings and act as a pathway to further study.
  • Involvement could come through provision of online learning services, whether directly or under licence, or in partnership with an existing Indonesian EdTech firm.

Conclusion

What is clear is the scale of Indonesia’s education and training needs, and the potential for Australian providers to help one of our most important near neighbours secure its future as a modern and prosperous economy. Barriers exist, but can be overcome.

“For those prepared to invest the time and energy, there are rewards to be had.”