The nature of jobs and skills requirements are changing rapidly across the Asia-Pacific region (APAC). The fast pace of transformation is forcing business leaders to quickly identify looming skills gaps and prepare their workforces for the future, giving clear direction to employees on how to build the skills they will need to thrive. Getting ahead of these skills gaps will require investment, leadership, and clear communication about the effects of trends like digitisation and automation on future skills needs.

To explore these issues, Economist Impact conducted a research programme consisting of a survey of employees, an extensive literature review, and interviews with employers and industry experts. Focusing on a time frame of three to five years into the future, this research has identified the most important trends driving demand for particular skills, gaps in workforce expertise, and motivations for upskilling and reskilling. This report details these findings and outlines some key steps to address critical  skills gaps in APAC.

This research comes at a critical time, when the world of work is changing faster than ever before. Workers are looking for flexible workplaces and a new sense of purpose in their careers, and businesses will need to rethink their priorities and look for top talent in a highly uncertain economic environment.

We would like to thank the following experts for their participation in the research for this project:

Akiko Sakamoto, skills development and employability specialist, International Labour Organisation (ILO) Emre Demokan, lead product manager, SmartRecruiters Gagan Bhargava, vice president, people insights and data excellence, Schneider Electric Kabir Nath, principal, talent strategy, Mercer, Singapore  Krishna Raghavan, chief people officer, Flipkart, India Muneaki Goto, representative director, Japan Reskilling Initiative Patrick Kidd, chief executive officer, Digital Skills Organisation, Australia Phil Loveder, executive manager, inform and engage, National Centre for Vocational Education Research (NCVER), Australia Saad Gilani, senior programme officer, International Labour Organisation (ILO) Sean Hinton, chief executive officer and founder, SkyHive Simon Walker, managing director, National Centre for Vocational Education Research (NCVER), Australia Soon Joo Gog, chief skills officer, SkillsFuture, Singapore Ved Mani Tiwari, chief executive officer, National Skill Development Corporation (NSDC), India

The survey respondents were drawn from across 14 markets in the region, out of which 11.8% were Gen Z (born in 1997-2012), 63.2% were Millennials (1981-96) and 25% were Gen X (1965-80). They all work in a diverse mix of industries.

The research shows that, across the region, common understanding is lacking between employers and employees about future skills and the best ways to develop them. In some instances, there is also an expectation mismatch between what employers want and what employees see as being important. Understanding these gaps will be instrumental in creating a workforce that is prepared for the economy of the future.

This article—one in a series of 12 market reports—examines these issues in Thailand. This series complements a research paper that looks at the reskilling and upskilling imperative across APAC.

 

Key findings

Digital skills (56%) are considered the most important skills category for Thai employees, closely followed by analytical skills (51%). Within the broad category of digital skills, advanced capabilities such as data analysis and visualisation (80.4%), cybersecurity (78.6%) and digital marketing (71.4%) are highly prioritised by workers. Respondents were almost twice as likely (60.7%) to prioritise artificial intelligence (AI) and machine learning (ML) skills than the Asia-Pacific (APAC) average (32.8%).   Employees’ motivations to acquire digital skills are driven by the availability of free online courses (29%) and to perform better in their current roles (28%).   While employees primarily consider employers key to their upskilling needs such as providing financial incentives for skilling and providing notable recognition (52% each), over half (58%) feel that the government has a key role in making them aware about future skills and trends.   

Thailand has transitioned from a low to an upper-middle-income country over the past four decades, significantly reducing poverty rates and creating millions of jobs within a generation.1 The country is now looking to transition to a digital economy to enable greater productivity and innovation—and there are signs it is already on this path. In 2020 the European Centre for Digital Competitiveness ranked Thailand as the second-most digitally competitive country in East Asia and the Pacific.2 In addition, digital transformation is expected to add US$79.5bn annually by 2030 to Thailand’s economy.3

Preparedness of the labour market will be a key factor in achieving success from this digitalisation.  Between 2010 and 2020, the value of Thailand’s digital services sector expanded by 37%, but the number of digital workers only rose by 26%.4 The absence of the corresponding tech skills to meet the demand driven by this digital transformation will limit businesses’ ability to digitally grow and transform.5 These shortages are particularly apparent in advanced technologies such as AI and data science.6

 

A strong focus on advanced digital skills

According to the Economist Impact survey, 56% of Thai employees consider digital expertise the most important category of skills that a worker should acquire today, broadly in line with regional trends. Thailand is an outlier in terms of what digital skills are considered priorities. While employees in most APAC markets rank basic digital skills as their top “must-haves”, employees in Thailand show a greater preference for advanced skills such as data analysis and visualisation (80.4%), cybersecurity (78.6%), and digital marketing and e-commerce (71.4%). A majority of employees (60.7%) also consider AI and ML skills as must-haves, almost double the regional average (32.8%).

These findings align with recent research that reveals that 96% of employers are hiring for roles involving advanced digital skills in order to meet their digital transformation plans.7 This growth in demand has also led to sharp rises in salaries for employees with these skills in the country, with a particular premium for digital marketing professionals.8

 

Figure 1: Digital and analytical skills are top priorities for Thai employees

Which skill categories do you think are the most important for the workforce in your sector to acquire today? (% of respondents)

Source: Economist Impact, 2023

 

Experts suggest that the focus on advanced digital skills is likely to be driven by the rapid digitalisation of business operations during and in the aftermath of the covid-19 pandemic. More than half of companies in Thailand in a 2022 Deloitte survey had adopted digital technologies, compared with only 12% pre-pandemic, making advanced digital skills top-of-mind among company leaders and employees.

 

Figure 2: Data analysis, cybersecurity and digital marketing trump basic digital skills

Which specific types of digital skills are must have, good to have or not needed for the workforce in your sector today? (% of respondents)

Source: Economist Impact, 2023

As the country continues to move online, cybersecurity capabilities will ensure the essential safeguard for its digital infrastructure. This is especially pertinent since cyber threats have jumped globally since the pandemic, and Thailand is no exception. The country experienced a sixfold increase in cyber-attacks between 2021 and 2022.9  Reflecting this, eight in ten (78.6%) employees in our survey consider cybersecurity as a must-have skill. As the businesses continue to digitalise, they will be increasingly vulnerable to these threats, and cybersecurity skills would be key to protecting sensitive information and reduce risks from these online threats.

Other areas considered important by more than half of employees in the survey include analytical skills such as problem solving, project management and critical thinking. Thailand’s workers defy regional trends in terms of the value they place on green skills (26% vs 17.7%).  This could be attributed to a new environmental, social and governance reporting mandate for public companies issued by the national securities regulator. 10 The country is also vulnerable to the impacts of climate change. As such, green skills, such as sustainability reporting, sustainable business management and supply chain management, as reported by our survey respondents, will become more important in meeting Thailand’s future climate goals.11

 

Motivations and barriers to skilling

Employees in Thailand are mostly driven to acquire digital skills due to the availability of free online courses (29%), followed by the ability to perform better in their current job roles (28%). One in four also consider these skills as fundamental to enabling personal and professional progress. 

Despite these motivations, employees face upskilling challenges. A lack of time is the biggest barrier to acquiring digital (34%) and analytical (33%) skills. A 2021 study assessing work-life balance in cities ranked Bangkok as the third-most overworked city globally, with nearly 20% of its population working more than 48 hours per week.12 

Other barriers to learning new digital skills include the lack of opportunities to practice these skills (29%) and poor internet access (25%) to join the courses. Even with a strong focus on the digitalisation of businesses, nearly a quarter of the population still lacks access to basic internet services.13 And while nearly a third of respondents say that free online courses motivate them, a quarter claim that their high cost (25%) inhibits learning. 

 

A collaborative approach to support employees’ upskilling

Both employers and the government are instrumental in addressing the multiple barriers to upskilling that employees face and play a crucial role in addressing an information gap that is resulting in skills blind spots.

The vast majority (79%) of respondents said that they have a poor understanding of what skills are needed in the market. Identifying future skills is complex, and keeping up with the most relevant market trends is likely to be challenging  for most employees.14 Nearly half of employees consider their employers responsible for providing information on the skills that are needed for different job roles.

To help remedy this, employers and the government could map the current and future skills in demand, and communicate this information to the workforce, with options of different upskilling pathways. Second, vested stakeholders like businesses should try to incentivise learning on the job to help retain talent and plug skills gaps. Survey respondents consider employers important across every category ranging from providing financial incentives (52%), and notable recognition through certification (52%) for skilling.  

 

Figure 3: Thai employees expect the most from their employers

In your opinion, who is responsible for supporting employees regarding the following issues? (% of respondents)

Source: Economist Impact, 2023

Three in ten employees (29%) consider the government responsible for providing access to diversified skilling programmes. To do this, policymakers could collaborate with different stakeholders across the skills ecosystem such as universities and businesses. This could also help provide the notable recognition that survey respondents say would help motivate further learning. “Push from the government can persuade universities to collaborate and align with industry needs,” says Agapol Na Songkhla, chief people officer at Thai Beverage. One example is the partnership between King Mongkut University of Technology Thonburi with the private sector to offer courses on 5G ICT skills, in line with the government’s efforts to ramp up its smart city development.15

As Thailand’s economy becomes digitally competitive, there is an urgent need for employees to acquire advanced digital skills. At present, employees expect their employers to support the majority of their reskilling needs. However, the government also plays a key role with more than half (58%) of employees relying on government awareness programmes to gain information on future skills. Government subsidies to cushion the cost to both businesses and their workers could help drive attention towards priority skills at any given time. In turn, this can give momentum to national efforts to focus on particular development and economic growth needs.

 

1 https://www.worldbank.org/en/country/thailand/overview

2 https://digital-competitiveness.eu/wp-content/uploads/ESCP03_Digital-Riser-Ranking_2020-09-14-1.pdf

3 Ibid.

4 https://www.thestar.com.my/aseanplus/aseanplus-news/2022/09/27/thailands-digital-firms-hire-vietnamese-to-fill-skills-gap-in-workforce

5 https://www.bangkokpost.com/tech/2241723/thai-tech-skills-likely-in-high-demand-this-year

6 https://hr.asia/featured-news/labour-skills-for-thailands-ai-future/

7 https://www.wtwco.com/en-th/insights/2023/02/wtw-reveals-thailands-job-outlook-for-2023-and-ways-to-retain-digital-talent-the-profession

8 Ibid.

9 https://www.bangkokpost.com/thailand/pr/2513529/facing-the-future-of-cyber-security#

10 https://sseinitiative.org/stock-exchange/set/

11 https://documents1.worldbank.org/curated/en/468721645451588595/pdf/Creating-Markets-in-Thailand-Rebooting-Productivity-for-Resilient-Growth.pdf

12 https://www.getkisi.com/work-life-balance-2021

13 https://www.eastasiaforum.org/2022/03/17/is-thailand-ready-for-the-digital-economy/

14 https://impact.economist.com/perspectives/sites/default/files/bridging_the_skills_gap_fuelling_careers_and_the_economy_in_asia_pacific.pdf

15 https://www.ericsson.com/en/press-releases/2/2022/7/ericsson--kmutt-partner-to-build-a-5g-ready-workforce-in-thailand

Economist Impact, supported by Google, conducted a survey of 1,375 employees across Asia-Pacific (APAC), including 100 employees from Indonesia, between November 2022 and January 2023. It also interviewed employers and industry experts across the region to understand their perspectives on skills gaps, as well as reskilling and upskilling aspirations.

The survey respondents were drawn from across 14 markets in the region, out of which 11.8% were Gen Z (born in 1997-2012), 63.2% were Millennials (1981-96) and 25% were Gen X (1965-80). They all worked in a diverse mix of industries.

The research shows that across the region, common understanding is lacking between employers and employees about future skills and the best way to develop them. In some instances, there is also an expectation mismatch between what employers want and what employees see as being important. Understanding these gaps will be instrumental in creating a workforce that is prepared for the economy of the future.

This article—one in a series of 12 market reports—examines these issues in Indonesia. This series complements a research paper that looks at the reskilling and upskilling imperative across APAC.

 

Key findings

Indonesian employees consider digital skills (60%) the top focus area for upskilling. Among these, basic digital skills are foundational for 88.3% of Indonesian workers. As digitalisation spreads across the archipelago, the country will increasingly demand more advanced skills. Employees consider capabilities with data analysis and visualisation (56.7%), IT support (51.7%), and digital marketing and e-commerce (48.3%) as the most important advanced tech skills to have. Workers have the highest expectations for their employers, believing they should support their development by providing information on skills (57%), through financial incentives (54%), recognition (43%) and supporting their mental well-being (35%).

Indonesia is one of Southeast Asia’s fastest-growing internet economy. Between 2015 and 2019, its technology sector grew at an average rate of 49% a year, alongside rapid e-commerce adoption by both large and small businesses.1 The economy’s digitalisation has enabled many in the workforce, especially the young, to participate as freelancers, particularly in the transportation and delivery sectors.2

However, many have been left out due to uneven internet connectivity and low literacy rates. For instance, most internet users tend to be concentrated in urban centres and are young—only 21% are over 50 years old.3 The issues are not just limited to the older population, as almost a quarter of young people (22.5%) in Indonesia are not in education, employment or training4 and the World Bank estimates that only 19% of 25-34 year olds had a tertiary qualification in 2021, much lower than the global average of 47%.5

 

The future of Indonesia’s economy is digital

Most Indonesian employees (60%) consider digital skills the most important to acquire. This is in sync with the digitalisation underway in the economy — Indonesia’s digitally skilled workers are forecast to contribute US$303.4bn to its GDP by 2030, accounting for 16% of GDP.6

Government analysis shows that the expanding technology sector could create 20m-45m new jobs in Indonesia.7 Between 2019 and 2030, non-tech sectors such as professional services, manufacturing and construction — are expected to see the highest growth in GDP contributions from digitally skilled workers, as these sectors increasingly adopt technology to improve their productivity.8

 

Figure 1: Digital skills are a top priority for Indonesian employees

Which skill categories do you think are the most important for the workforce in your sector to acquire today? (%)

Source: Economist Impact, 2023

Within the broad category of digital skills, employees in our survey consider advanced digital skills such as data analysis and visualisation (56.7%), IT support (51.7%), and digital marketing and e-commerce (48.3%) as must-have skills. Employees also said the same for coding and programming (26.7%) and artificial intelligence (AI) and machine learning (25%). The importance given to these advanced skills possibly reflects a skills gap, as data from 2020 suggest that  less than 1% of the workforce in the country possessed advanced digital skills.9

Advanced digital skills are becoming more important for various sectors too. For instance, big data analytics skills are increasingly used in the banking sector to understand customers’ spending patterns and preferences, to cross-sell products and for fraud management.10 Similarly, AI is expected to improve care delivery and hospital operations.11 Meanwhile, farmers are benefitting in myriad ways from real-time monitoring and prediction systems with Internet of Things-enabled tools.12

Cybersecurity is another must-have advanced digital skill for 36.7% of employees, reflecting Indonesia’s struggles with digital risks. The country was ranked the most vulnerable in Southeast Asia for cyber risks, and faced more than 11m attacks in the first quarter of 2022 alone.13

Although green skills such as sustainability reporting, sustainable business management and supply chain management are considered less important at present(15%), these skills would gain importance due to the country's rising sustainability concerns. Indonesia is ranked among the top countries exposed to climate risks with high vulnerability to all types of flooding and extreme heat. 14

 

Figure 2: Advanced digital skills such as data analysis and visualisation, and IT support are must-haves

Indicate which specific types of digital skills are must-have, good to have or not needed for the workforce in your sector today (%)

Source: Economist Impact, 2023

 

Infrastructure and high costs complicate access to skilling

Employees in Indonesia are strongly motivated to acquire new skills. Nearly half (49%) of the employees agree that upskilling or reskilling has had a high impact in improving performance in their current roles, and 54% report a high impact in exploring new roles and areas of interest. Despite these motivations, more than one in four (27%) employees cite poor internet access as a barrier in acquiring new digital skills. Nila Marita, director and head of external affairs at GoTo—the holding company of two major Indonesian startups, Gojek and Tokopedia—agrees that internet connectivity is “crucial to increase access to important learning opportunities in Indonesia and bridging this gap will enable more Indonesians to acquire digital skills.” Addressing access is important, as employees utilise online courses for learning. Indeed, 54% of employees say they obtain digital skills outside of the workplace via online courses.

High costs (42%) are also a major hurdle in Indonesians’ ability to digitally upskill, and companies are not investing enough to provide workers with on-the-job training.15 Additionally, Indonesia has a large, informal sector made up of low-income workers, creating challenges for employees to afford skilling programmes and for the government to reach them.16 17

 

Figure 3: Key skilling obstacles for employees across skills types

What are the top three significant obstacles that you face while learning new skills?

 

 

 

Source: Economist Impact, 2023

Another challenge that employees cite across most skill sets is a lack of time in learning new courses. Indonesian workers have reported experiencing higher workload after the Covid-19 pandemic.18 This also aligns with the higher importance that employees in our survey assign to self-management skills like time management, resilience and stress tolerance (49%).

 

High expectations from employers

According to our survey respondents, employers are the most responsible for supporting their development across every category apart from providing access to diversified skilling programmes. In particular, they see their employers as a key source of providing information on skills (57%), financial incentives (54%), recognition (43%) and support for their mental well-being (35%).

Employers could address many of the obstacles that employees face such as high costs and time restrictions by subsidising access to training programmes and integrating more workplace training sessions. “Both the government and private sector in Indonesia have been scaling up efforts to develop the country’s talent pool in recent years,” says Ms Marita from GoTo. For instance, organisations and the government are increasingly collaborating with universities to prepare university students with in-demand skills. Private sector companies are also training the trainers and working together with them to design the curriculum based on companies’ skills needs.

 

Figure 4: Employers are considered the most responsible for upskilling Indonesians

In your opinion who is responsible for supporting employees regarding the following issues? (%)

Source: Economist Impact, 2023

Seventy-seven percent of employees, substantially higher than the regional average (66.5%), believe that employers now lean towards skills-based hiring over paper qualifications. In this context, efforts by government, educational institutions and companies to communicate what skills are in-demand will help the workforce prioritise which ones to learn. While most workers rely on social media and advertisements (73%) for information on valuable skills, government awareness programmes are also an important source for 50% of employees.

 

Multi-stakeholder collaboration key to closing skills gaps

Overcoming access and infrastructure gaps is integral to realising Indonesia’s digital economic potential. The government has made efforts to counteract these issues through various programmes such as Kartu Prakerja, an online upskilling programme targeted at retraining one million unemployed and low-income adults who are 18-64 years old.19 20 The programme takes an end-to-end approach, providing access to upskilling and reskilling subsidies, courses and job vacancies. Subsidies can also be useful in driving the uptake of green skills, which acts as the biggest motivation to acquire these skills for one in three surveyed employees. Another programme provided by Indonesia’s Ministry of Communications and Information is the Digital Talent Scholarship (DTS). It aims to develop the skills and competitiveness of the country’s workforce in the information and communication technology sector.21

For Indonesia to fully unlock the economic potential of digital skilling, it must extend this kind of opportunity to workers at micro, small and medium enterprises which employ 97% of the country’s workforce.22

Another government programme is Making Indonesia 4.0, a roadmap launched in 2018 to accelerate digitalisation.23 Elements of this roadmap are geared towards training and reskilling workers as technology becomes more ingrained in industrial processes. Additionally, attempts to broaden equitable access to digital skilling opportunities could close the skills gaps.

References

1 https://digitalcfoasia.com/2023/01/10/addressing-the-critical-skill-gaps-in-indonesia/

2 https://fair.work/wp-content/uploads/sites/17/2021/12/Fairwork-Report-Indonesia-2021-accessible.pdf

3 https://smeru.or.id/en/publication/diagnostic-report-digital-skills-landscape-indonesia

4 https://data.worldbank.org/indicator/SL.UEM.NEET.ZS?locations=ID

5 https://gpseducation.oecd.org/CountryProfile?primaryCountry=IDN&treshold=5&topic=EO

6 https://accesspartnership.com/wp-content/uploads/2023/03/skills-for-the-future-executive-summary-in-english.pdf

7 https://opengovasia.com/creating-million-new-jobs-through-digital-technology-in-indonesia/

8 https://accesspartnership.com/wp-content/uploads/2023/03/skills-for-the-future-executive-summary-in-english.pdf

9 https://pathwayscommission.bsg.ox.ac.uk/sites/default/files/2022-03/FINAL_Diagnostic%20Report_Accessible.pdf

10 https://www.sciencedirect.com/science/article/pii/S1877050915005992

11 https://www.usa.philips.com/healthcare/nobounds/phoenix-childrens-benefits-of-ai-in-healthcare#_continue-reading

12 https://www.xcubelabs.com/blog/benefits-of-iot-in-agriculture-and-smart-farming/

13 https://en.antaranews.com/news/227061/indonesia-faces-11-mln-cyber-attacks-in-2022-first-quarter

14 https://www.adb.org/sites/default/files/publication/700411/climate-risk-country-profile-indonesia.pdf

15 https://www.weforum.org/agenda/2022/11/indonesia-edtech-financial-inclusion/

16 An informal economy broadly refers to any part of the economy that is unregistered, meaning that they are not covered or are insufficiently covered by formal employment arrangements. In most of these cases, companies remain largely unaccountable to any regulation as workers are not officially classed as employees, limiting their access to government services, including welfare, labour rights protections and public programmes. In Indonesia, 60% of the workforce is employed by the informal sector and accounts for 22.7% of national GDP (US$776 billion).

17 https://www.ilo.org/jakarta/areasofwork/informal-economy/lang--en/index.htm

18 https://en.prnasia.com/releases/apac/68-of-indonesia-s-employees-willing-to-forgo-higher-salaries-or-job-promotions-for-work-life-balance-michael-page-366002.shtml

19 https://www.prakerja.go.id/

20 https://money.kompas.com/read/2023/01/06/123000126/kartu-prakerja-2023-target-anggaran-dan-pelaksanaan-pelatihannya-

21 https://digitalent.kominfo.go.id/program

22 https://www.weforum.org/agenda/2022/05/digitalization-growth-indonesia-msmes/

23 https://kemenperin.go.id/artikel/23388/Kemenperin:-Revolusi-Industri-4.0-Optimalkan-Potensi--Indonesia-di-Sektor-Manufaktur