Bridging the skills gap: Fuelling careers and the economy in India
Bridging the skills gap: fuelling careers and the economy in India
Economist Impact, supported by Google, conducted a survey of 1,375 employees across Asia-Pacific (APAC), including 100 employees from India, 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.
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Bridging the skills gap: fuelling careers and the economy in Asia-Pacific
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), IndiaBridging the skills gap: Fuelling careers and the economy in the Philippine...
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 the Philippines. This series complements a research paper that looks at the reskilling and upskilling imperative across APAC.
Key findings
Self-management skills (68%) such as stress tolerance, resilience and flexibility are the most important for employees, closely followed by digital skills (52%).
Within digital skills, advanced skills such as IT support (65.4%), data analysis and visualisation (55.8%) and cybersecurity (59.6%) would be key to supporting growth in the Philippines, and are selected as “must have” capabilities by the employees. Employees in the Philippines prioritise artificial intelligence (AI) and machine learning (ML) skills at higher rates (42.3%) than the regional average (32.8%).
Online courses are a key source of new digital skills for 57%, higher than the regional average (42%). However, poor internet access (41%), lack of time (40%) and high cost of courses (30%) limits employees’ digital upskilling.
A strong post-covid economic recovery1 sets context for the labour market in the Philippines. The country’s economy is expected to grow by 6% in 2023—and by 6.2% in 2024—on the back of rising domestic demand and a post-covid rebound in the services sectors.2
The country’s tech sector is projected to grow rapidly with the estimated value of the digital economy reaching US$150bn in the next decade3 while the internet economy is expected to more than double between 2020 and 2025.4 This massive growth will require the right capabilities and diverse skill sets in the labour market. According to the IT-BPM Association of the Philippines, by 2028 the tech industry is expected to generate 1.1m new jobs in the country, of which 150,000 are developer roles that would need to be filled in the next six years.5
Despite this momentum, many in the Philippines lack even basic skills to contribute effectively. Almost 90% of the country’s population lacks basic ICT skills such as word-processing, internet and email skills.6 The government is taking action to address these gaps. Most recently, the newly established Inter-Agency Council for Development and Competitiveness of Philippine Digital Workforce announced plans to undertake a skills mapping exercise to identify gaps in the area of digital and ICT capabilities such as engineering, cloud computing, artificial intelligence, web development and management, and e-commerce marketing etc.7
Advanced digital skills are rising in importance
According to the Economist Impact survey, 68% of employees in the Philippines pick self-management skills as a top important skill category for workers to acquire, higher than the regional average (53%). These skills encompass aspects such as time management, active learning, resilience, stress tolerance and flexibility. The rising importance of these skills could be an outcome of hybrid working models with demands on managers and teams to work online more adeptly. Doreen Cooper, an independent learning facilitator based in the Philippines, suggests this could also be “due to a deep-rooted culture in the country that could benefit from encouraging self-discipline and a strong work ethic”.
Figure 1: Top skills in demand in the Philippines
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
Digital skills emerge as another important skills category. Basic digital skills are considered a must-have by 71.2% of employees. At the same time, they also prioritise advanced digital skills such as IT support, cybersecurity, and data analysis and visualisation, higher than the regional average. IT skills are essential to the country’s major business process outsourcing (BPO) sector, which contributes nearly US$30 bn to GDP every year to the Filipino economy.8 The Philippines faces a shortage of 200,000 workers with IT skills, as noted by a recent Jobstreet report.9
Figure 2: Must-have advanced digital skills for employees in the Philippines vs APAC
Which specific types of advanced digital skills are a must have for the workforce in your sector today? (% of respondents)
Source: Economist Impact, 2023
Compared to their regional peers (32.8%), employees in the country demonstrate a stronger preference for AI and machine learning skills (42.3%). This reflects the rising government focus on AI: In 2021, the country launched an AI roadmap that aims to accelerate the adoption of AI to “advance industrial development, generate better quality entrepreneurship as well as high-paying opportunities for Filipinos”.10
Fast digitalisation and greater internet usage in the economy means that the country also faces higher security risks, reflected in the importance given to cybersecurity skills – three in four Filipino businesses experienced a cyber incident in 2022, as against a regional average of 59%.11 A 2022 report from USAID noted a possible loss of US$23bn in the business process outsourcing industry in absence of cybersecurity capabilities. One reason, the report found, is a lack of clear definitions of job roles and responsibilities in the area.12
On the other hand, green skills had minor importance for Filipino employees—only 13% ranked them as important, somewhat lower than the regional average (17.7%). This is likely to change however as the Philippines is one of the most vulnerable countries to climate change.13 If no action is taken, the Philippines risks losing 6% of its GDP every year by 2100.14
Infrastructural barriers to upskilling, despite high employee motivations
Employee motivations to upskill vary. Easy access and availability of free online courses (37%) are employees’ biggest motivator to acquire digital skills, followed by higher pay and bargaining power (33%) and exploring new job opportunities (29%). Ms Cooper explains, “by and large, employees want to learn skills that enable them to perform better in their jobs, and earn more as well as get promoted,” aligning with findings that career progression is a significant motivator for employees in the Philippines.
Figure 3: Motivations to acquire different skills
What best describes your motivation to acquire new skills? (% of respondents)
Source: Economist Impact, 2023
Despite high motivations, the biggest barrier to acquiring new digital skills is poor internet access to join online courses (41%). This issue is especially challenging for the country’s upskilling needs as more than half (57%) rely on online courses as a top source of digital upskilling, substantially more than the regional average (42%). Despite having high levels of internet penetration and usage, the Philippines struggles with poor internet performance and high costs. More than 50% of the country’s population could not afford even a basic package of mobile internet, as per a recent study. 15
Another challenge cited by four in ten employees was a lack of time in learning new courses. Employees working in sectors such as media, healthcare, marketing and advertising work report working beyond 40 hours per week.16 Additionally, nearly 50% of the workers from the Philippines in a research said to have experienced workplace stress – the highest percentage in Southeast Asia.17 Besides lack of time and workplace stress, high cost of courses was another challenge highlighted by 30% of employees in our survey in learning new digital skills. The country has one of the most expensive education systems in the Southeast Asian region18, making the cost of courses a big hurdle in upskilling the workforce.
Figure 4: Poor internet access, a lack of time and the high cost of courses are key barriers to upskilling
What are some of the most significant obstacles that you face while learning new digital skills? (% of respondents)
Source: Economist Impact, 2023
Public-private partnerships will be a key driver of progress
According to the Economist Impact survey, employers are considered to have greater responsibility for providing notable recognition such as certificates (64%), information on skills needed for different roles (58%) and financial incentives (55%). Government, on the other hand, is considered most responsible for providing access to diversified skilling programmes by 50% of employees. Ms Cooper highlights the government is already playing some part in this area by offering free seminars and workshops that are available to the public. So are employers– six in ten Filipino firms offer training to their workers, higher than the OECD average (less than 40%).19
Employers have an opportunity to leverage employees’ strong motivation to upskill if they can improve access to online training programmes, but more efforts are needed to integrate skilling into workers’ everyday routines. Ms Cooper adds that, “employees are far more likely to attend training if it is mandated by their employers.” Employers should also look to offer more opportunities for workers to learn on the job. This can enable employers to foster a strong culture of learning, while providing employees with career progression opportunities that drive better results. The government and employers could also do more to provide information on what skills are valuable. Currently, 63% of employees get their information about skills from social media, and only around 48% from government awareness programmes or from events in office and through employers.
Figure 5: Employers have a key role in supporting employees’ upskilling
In your opinion, are the government, your employer or yourself responsible for supporting employees regarding the following issues? (% of respondents)
Source: Economist Impact, 2023
Moving forward, collaboration between the government and private sector could also foster a strong skills ecosystem in the country. For example, the Philippines Skills Framework to upskill and reskill the country’s workforce is built on the partnership of nine government agencies.20 The country is also proactively encouraging public-private partnerships for the growth of specific skill sets. For instance, a 2022 law seeking to develop digital workforce commissions the government to enter into public-private partnerships with stakeholders in the skills ecosystem in order to develop digital careers of the workforce.21
1 https://www.eiu.com/n/philippines-economic-recovery-remains-strong/#:~:text=On%20May%2012th%20the%20Philippines,7.7%25%20in%20the%20previous%20quarter
2 https://www.adb.org/news/philippine-economy-post-robust-growth-2023-2024-despite-inflation-pressures-adb
3 https://www.bworldonline.com/technology/2023/01/05/496484/govt-online-shift-may-boost-philippine-digital-economy/
4 https://accesspartnership.com/growing-digital-economy-philippines/
5 https://mb.com.ph/2022/09/27/bridging-the-skills-gaps/
6 https://www.unescap.org/kp/2022/workforce-we-need-social-outlook-asia-and-pacific
7 https://hrmasia.com/upskilling-the-digital-skills-of-workers-in-the-philippines/
8 https://www.nexford.org/insights/the-future-of-bpos-in-the-philippines-and-growth-opportunities
9 https://www.philstar.com/business/2022/02/03/2158115/higher-demand-seen-tech-professionals
10 https://opengovasia.com/the-philippines-launches-national-ai-roadmap/
11 https://www.kroll.com/en/insights/publications/cyber/apac-state-incident-response/philippines
12 https://www.gmanetwork.com/news/money/companies/854521/cybersecurity-gaps-could-jeopardize-75-of-philippines-bpo-market-usaid-report/story/
13 https://reliefweb.int/report/philippines/philippines-country-climate-and-development-report-2022#:~:text=Multiple%20indices%20rank%20the%20Philippines,for%20the%20past%2010%20years
14 https://niccdies.climate.gov.ph/climate-change-impacts
15 https://www.bworldonline.com/infographics/2022/04/18/442463/philippines-most-internet-poor-in-southeast-asia/
16 https://www.spot.ph/newsfeatures/the-latest-news-features/88589/industries-with-long-work-hours-in-the-philippines-a833-20220211
17 https://www.gallup.com/workplace/349484/state-of-the-global-workplace-2022-report.aspx?thank-you-report-form=1
18 https://www.studocu.com/ph/document/university-of-science-and-technology-of-southern-philippines-claveria/chemistry/the-high-cost-of-education-in-the-philippines-challenges-and-opportunities-article/47434059
19 https://read.oecd-ilibrary.org/education/towards-a-skills-strategy-for-southeast-asia_6db0907f-en#page22
20 https://samarnews.com/news2021/jun/f444.htm
21 https://www.gmanetwork.com/news/topstories/nation/840238/bill-seeking-to-develop-competitive-digital-workforce-lapses-into-law/story/
Bridging the skills gap: Fuelling careers and the economy in Indonesia
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
Bridging the skills gap: Fuelling careers and the economy in South Korea
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.1
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Related content
Bridging the skills gap: fuelling careers and the economy in Asia-Pacific
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), IndiaBridging the skills gap: Fuelling careers and the economy in the Philippine...
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 the Philippines. This series complements a research paper that looks at the reskilling and upskilling imperative across APAC.
Key findings
Self-management skills (68%) such as stress tolerance, resilience and flexibility are the most important for employees, closely followed by digital skills (52%).
Within digital skills, advanced skills such as IT support (65.4%), data analysis and visualisation (55.8%) and cybersecurity (59.6%) would be key to supporting growth in the Philippines, and are selected as “must have” capabilities by the employees. Employees in the Philippines prioritise artificial intelligence (AI) and machine learning (ML) skills at higher rates (42.3%) than the regional average (32.8%).
Online courses are a key source of new digital skills for 57%, higher than the regional average (42%). However, poor internet access (41%), lack of time (40%) and high cost of courses (30%) limits employees’ digital upskilling.
A strong post-covid economic recovery1 sets context for the labour market in the Philippines. The country’s economy is expected to grow by 6% in 2023—and by 6.2% in 2024—on the back of rising domestic demand and a post-covid rebound in the services sectors.2
The country’s tech sector is projected to grow rapidly with the estimated value of the digital economy reaching US$150bn in the next decade3 while the internet economy is expected to more than double between 2020 and 2025.4 This massive growth will require the right capabilities and diverse skill sets in the labour market. According to the IT-BPM Association of the Philippines, by 2028 the tech industry is expected to generate 1.1m new jobs in the country, of which 150,000 are developer roles that would need to be filled in the next six years.5
Despite this momentum, many in the Philippines lack even basic skills to contribute effectively. Almost 90% of the country’s population lacks basic ICT skills such as word-processing, internet and email skills.6 The government is taking action to address these gaps. Most recently, the newly established Inter-Agency Council for Development and Competitiveness of Philippine Digital Workforce announced plans to undertake a skills mapping exercise to identify gaps in the area of digital and ICT capabilities such as engineering, cloud computing, artificial intelligence, web development and management, and e-commerce marketing etc.7
Advanced digital skills are rising in importance
According to the Economist Impact survey, 68% of employees in the Philippines pick self-management skills as a top important skill category for workers to acquire, higher than the regional average (53%). These skills encompass aspects such as time management, active learning, resilience, stress tolerance and flexibility. The rising importance of these skills could be an outcome of hybrid working models with demands on managers and teams to work online more adeptly. Doreen Cooper, an independent learning facilitator based in the Philippines, suggests this could also be “due to a deep-rooted culture in the country that could benefit from encouraging self-discipline and a strong work ethic”.
Figure 1: Top skills in demand in the Philippines
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
Digital skills emerge as another important skills category. Basic digital skills are considered a must-have by 71.2% of employees. At the same time, they also prioritise advanced digital skills such as IT support, cybersecurity, and data analysis and visualisation, higher than the regional average. IT skills are essential to the country’s major business process outsourcing (BPO) sector, which contributes nearly US$30 bn to GDP every year to the Filipino economy.8 The Philippines faces a shortage of 200,000 workers with IT skills, as noted by a recent Jobstreet report.9
Figure 2: Must-have advanced digital skills for employees in the Philippines vs APAC
Which specific types of advanced digital skills are a must have for the workforce in your sector today? (% of respondents)
Source: Economist Impact, 2023
Compared to their regional peers (32.8%), employees in the country demonstrate a stronger preference for AI and machine learning skills (42.3%). This reflects the rising government focus on AI: In 2021, the country launched an AI roadmap that aims to accelerate the adoption of AI to “advance industrial development, generate better quality entrepreneurship as well as high-paying opportunities for Filipinos”.10
Fast digitalisation and greater internet usage in the economy means that the country also faces higher security risks, reflected in the importance given to cybersecurity skills – three in four Filipino businesses experienced a cyber incident in 2022, as against a regional average of 59%.11 A 2022 report from USAID noted a possible loss of US$23bn in the business process outsourcing industry in absence of cybersecurity capabilities. One reason, the report found, is a lack of clear definitions of job roles and responsibilities in the area.12
On the other hand, green skills had minor importance for Filipino employees—only 13% ranked them as important, somewhat lower than the regional average (17.7%). This is likely to change however as the Philippines is one of the most vulnerable countries to climate change.13 If no action is taken, the Philippines risks losing 6% of its GDP every year by 2100.14
Infrastructural barriers to upskilling, despite high employee motivations
Employee motivations to upskill vary. Easy access and availability of free online courses (37%) are employees’ biggest motivator to acquire digital skills, followed by higher pay and bargaining power (33%) and exploring new job opportunities (29%). Ms Cooper explains, “by and large, employees want to learn skills that enable them to perform better in their jobs, and earn more as well as get promoted,” aligning with findings that career progression is a significant motivator for employees in the Philippines.
Figure 3: Motivations to acquire different skills
What best describes your motivation to acquire new skills? (% of respondents)
Source: Economist Impact, 2023
Despite high motivations, the biggest barrier to acquiring new digital skills is poor internet access to join online courses (41%). This issue is especially challenging for the country’s upskilling needs as more than half (57%) rely on online courses as a top source of digital upskilling, substantially more than the regional average (42%). Despite having high levels of internet penetration and usage, the Philippines struggles with poor internet performance and high costs. More than 50% of the country’s population could not afford even a basic package of mobile internet, as per a recent study. 15
Another challenge cited by four in ten employees was a lack of time in learning new courses. Employees working in sectors such as media, healthcare, marketing and advertising work report working beyond 40 hours per week.16 Additionally, nearly 50% of the workers from the Philippines in a research said to have experienced workplace stress – the highest percentage in Southeast Asia.17 Besides lack of time and workplace stress, high cost of courses was another challenge highlighted by 30% of employees in our survey in learning new digital skills. The country has one of the most expensive education systems in the Southeast Asian region18, making the cost of courses a big hurdle in upskilling the workforce.
Figure 4: Poor internet access, a lack of time and the high cost of courses are key barriers to upskilling
What are some of the most significant obstacles that you face while learning new digital skills? (% of respondents)
Source: Economist Impact, 2023
Public-private partnerships will be a key driver of progress
According to the Economist Impact survey, employers are considered to have greater responsibility for providing notable recognition such as certificates (64%), information on skills needed for different roles (58%) and financial incentives (55%). Government, on the other hand, is considered most responsible for providing access to diversified skilling programmes by 50% of employees. Ms Cooper highlights the government is already playing some part in this area by offering free seminars and workshops that are available to the public. So are employers– six in ten Filipino firms offer training to their workers, higher than the OECD average (less than 40%).19
Employers have an opportunity to leverage employees’ strong motivation to upskill if they can improve access to online training programmes, but more efforts are needed to integrate skilling into workers’ everyday routines. Ms Cooper adds that, “employees are far more likely to attend training if it is mandated by their employers.” Employers should also look to offer more opportunities for workers to learn on the job. This can enable employers to foster a strong culture of learning, while providing employees with career progression opportunities that drive better results. The government and employers could also do more to provide information on what skills are valuable. Currently, 63% of employees get their information about skills from social media, and only around 48% from government awareness programmes or from events in office and through employers.
Figure 5: Employers have a key role in supporting employees’ upskilling
In your opinion, are the government, your employer or yourself responsible for supporting employees regarding the following issues? (% of respondents)
Source: Economist Impact, 2023
Moving forward, collaboration between the government and private sector could also foster a strong skills ecosystem in the country. For example, the Philippines Skills Framework to upskill and reskill the country’s workforce is built on the partnership of nine government agencies.20 The country is also proactively encouraging public-private partnerships for the growth of specific skill sets. For instance, a 2022 law seeking to develop digital workforce commissions the government to enter into public-private partnerships with stakeholders in the skills ecosystem in order to develop digital careers of the workforce.21
1 https://www.eiu.com/n/philippines-economic-recovery-remains-strong/#:~:text=On%20May%2012th%20the%20Philippines,7.7%25%20in%20the%20previous%20quarter
2 https://www.adb.org/news/philippine-economy-post-robust-growth-2023-2024-despite-inflation-pressures-adb
3 https://www.bworldonline.com/technology/2023/01/05/496484/govt-online-shift-may-boost-philippine-digital-economy/
4 https://accesspartnership.com/growing-digital-economy-philippines/
5 https://mb.com.ph/2022/09/27/bridging-the-skills-gaps/
6 https://www.unescap.org/kp/2022/workforce-we-need-social-outlook-asia-and-pacific
7 https://hrmasia.com/upskilling-the-digital-skills-of-workers-in-the-philippines/
8 https://www.nexford.org/insights/the-future-of-bpos-in-the-philippines-and-growth-opportunities
9 https://www.philstar.com/business/2022/02/03/2158115/higher-demand-seen-tech-professionals
10 https://opengovasia.com/the-philippines-launches-national-ai-roadmap/
11 https://www.kroll.com/en/insights/publications/cyber/apac-state-incident-response/philippines
12 https://www.gmanetwork.com/news/money/companies/854521/cybersecurity-gaps-could-jeopardize-75-of-philippines-bpo-market-usaid-report/story/
13 https://reliefweb.int/report/philippines/philippines-country-climate-and-development-report-2022#:~:text=Multiple%20indices%20rank%20the%20Philippines,for%20the%20past%2010%20years
14 https://niccdies.climate.gov.ph/climate-change-impacts
15 https://www.bworldonline.com/infographics/2022/04/18/442463/philippines-most-internet-poor-in-southeast-asia/
16 https://www.spot.ph/newsfeatures/the-latest-news-features/88589/industries-with-long-work-hours-in-the-philippines-a833-20220211
17 https://www.gallup.com/workplace/349484/state-of-the-global-workplace-2022-report.aspx?thank-you-report-form=1
18 https://www.studocu.com/ph/document/university-of-science-and-technology-of-southern-philippines-claveria/chemistry/the-high-cost-of-education-in-the-philippines-challenges-and-opportunities-article/47434059
19 https://read.oecd-ilibrary.org/education/towards-a-skills-strategy-for-southeast-asia_6db0907f-en#page22
20 https://samarnews.com/news2021/jun/f444.htm
21 https://www.gmanetwork.com/news/topstories/nation/840238/bill-seeking-to-develop-competitive-digital-workforce-lapses-into-law/story/
Bridging the skills gap: Fuelling careers and the economy in Indonesia
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
Bridging the skills gap: fuelling careers and the economy in Asia-Pacific
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.
Related content
Bridging the skills gap: Fuelling careers and the economy in Indonesia
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
Menjembatani kesenjangan keterampilan: Menumbuhkan karier dan ekonomi di In...
Menjembatani kesenjangan keterampilan: Menumbuhkan karier dan ekonomi di Indonesia
Economist Impact, yang didukung oleh Google, melaksanakan survei yang melibatkan 1,375 karyawan di Asia Pasifik (APAC), termasuk 100 karyawan dari Indonesia antara November 2022 dan Januari 2023. Lembaga tersebut juga mewawancarai perusahaan dan pakar industri di wilayah tersebut untuk memahami pandangan mereka tentang kesenjangan keterampilan, serta keinginan untuk melaksanakan reskilling (pelatihan bagi karyawan untuk memperoleh kemampuan baru) dan upskilling (pelatihan bagi karyawan untuk meningkatkan kemampuan yang sudah ada).
Para responden survei diambil dari 14 negara di Asia Pasifik, yang terdiri atas 11.8% Gen Z (lahir pada tahun 1997-2012), 63.2% Milenial (1981-96), dan 25% Gen X (1965-80). Mereka bekerja di berbagai industri.
Penelitian tersebut menunjukkan bahwa di seluruh wilayah di Asia Pasifik, perusahaan dan karyawan sama-sama kurang memahami keterampilan di masa depan dan cara terbaik untuk mengembangkannya. Pada sebagian kasus, juga terdapat perbedaan ekspektasi antara apa yang diinginkan oleh perusahaan dan apa yang dipandang oleh karyawan sebagai hal yang penting. Memahami kesenjangan ini sangat penting dalam mewujudkan tenaga kerja yang siap untuk ekonomi di masa mendatang.
Artikel ini—salah satu dari seri 12 laporan negara—membedah berbagai masalah ini di Indonesia. Seri ini melengkapi makalah penelitian yang membahas tentang reskilling dan upskilling yang sangat penting di wilayah APAC.
Temuan utama
Karyawan Indonesia menganggap keterampilan digital (60%) merupakan area fokus utama untuk upskilling. Di antara semua ini, beberapa keterampilan digital dasar adalah hal utama bagi 88.3% pekerja Indonesia. Seiring pemerataan digitalisasi, keterampilan yang lebih tinggi akan semakin dibutuhkan di setiap negara. Karyawan menganggap kemampuan analisis dan visualisasi data (56.7%), IT support(51.7%), serta pemasaran digital dan e-commerce (48.3%) adalah keterampilan teknologi tinggi yang sangat penting untuk dimiliki. Para pekerja memiliki ekspektasi yangtinggi dari perusahaan mereka dan yakin bahwa perusahaan harus mendukung perkembangan mereka dengan menyediakan informasi tentang keterampilan (57%), melalui insentif finansial (54%), penghargaan (43%), dan mendukung kesehatan mental mereka (35%).Indonesia adalah salah satu negara dengan pertumbuhan ekonomi internet tercepat di Asia Tenggara. Antara 2015 dan 2019, laju pertumbuhan rata-rata sektor teknologi di negara tersebut adalah 49% per tahun, di samping adopsi e-commerce oleh perusahaan besar dan kecil.1 Digitalisasi ekonomi ini telah memungkinkan tenaga kerja, terutama yang lebih muda, untuk berpartisipasi sebagai pekerja lepas, terutama di sektor transportasi dan pengantaran barang.2
Namun demikian, banyak yang tertinggal karena konektivitas internet yang tidak merata dan tingkat literasi yang rendah. Misalnya, sebagian besar pengguna internet terkonsentrasi di daerah pusat perkotaan dan berusia muda—hanya 21% yang berusia di atas 50 tahun.3 Berbagai masalah ini tidak hanya terjadi pada populasi yang berusia lebih tua, karena hampir seperempat anak-anak muda (22.5%) di Indonesia tidak mengenyam pendidikan, memiliki pekerjaan, atau mendapatkan pelatihan4. Selain itu, Bank Dunia memperkirakan bahwa hanya 19% orang-orang yang berusia 25-34 tahun lulus dari pendidikan tinggi pada 2021, jauh lebih rendah dari rata-rata global sebesar 47%.5
Masa depan ekonomi Indonesia adalah digital
Sebagian besar karyawan di Indonesia (60%) menganggap keterampilan digital adalah yang terpenting. Ini selaras dengan digitalisasi yang berlangsung di bidang ekonomi. Pekerja yang memiliki keterampilan digital di Indonesia diperkirakan memberikan kontribusi sebesar 303.4 miliar dolar AS terhadap PDB negara tersebut pada 2030, atau 16% dari PDB.6
Analisis pemerintah menunjukkan bahwa sektor teknologi yang berkembang dapat menciptakan 20 juta hingga 45 juta pekerjaan baru di Indonesia.7 Antara 2019 dan 2030, sektor non teknologi, seperti layanan profesional, manufaktur dan konstruksi, diperkirakan mengalami pertumbuhan tertinggi dalam hal kontribusi dari pekerja yang memiliki keterampilan digital, karena semua sektor ini semakin mengadopsi teknologi untuk meningkatkan produktivitas.8
Gambar 1: Keterampilan digital adalah prioritas utama bagi karyawan Indonesia
Kategori keterampilan mana yang menurut Anda paling penting bagi tenaga kerja di sektor Anda saat ini? (%)
Sumber: Economist Impact, 2023
Dalam kategori keterampilan digital yang luas, karyawan dalam survei kami memandang keterampilan digital tingkat tinggi, seperti analisis dan visualisasi data (56.7%), dukungan TI (51.7%), serta pemasaran digital dan e-commerce (48.3%) adalah keterampilan yang wajib dimiliki. Mereka juga memiliki pandangan yang sama untuk coding dan pemrograman (26.7%), serta kecerdasan buatan (artificial intelligence/AI) dan pembelajaran mesin (25%). Karena keterampilan tingkat tinggi ini dianggap penting, hal ini mungkin mencerminkan kesenjangan keterampilan, karena data yang diperoleh pada tahun 2020 menunjukkan bahwa kurang dari 1% tenaga kerja di Indonesiamemiliki keterampilan digital tingkat tinggi.9
Keterampilan digital tingkat tinggijuga menjadi semakin penting bagi beragam sektor. Misalnya, keterampilan analitik mahadata (big data) semakin banyak digunakan di sektor perbankan untuk memahami pola dan preferensi pengeluaran pelanggan, untuk melakukan penjualan silang produk, dan untuk mengatasi kecurangan.10 Demikian pula, AI diharapkan meningkatkan perawatan dan operasional di rumah sakit.11 Sementara itu, para petani mendapatkan manfaat dari berbagai cara, mulai dari sistem pemantauan waktu nyata dan prediksi dengan alat yang didukung oleh Internet of Things (Internet untuk Segala).12
Keamanan siber adalah keterampilan digital tingkat tinggi yang harus dimiliki bagi 36,7% karyawan, yang menunjukkan bahwa Indonesia menghadapi tantangan dalam hal risiko digital. Indonesiamenduduki peringkat tertinggi di Asia Tenggara dalam hal risiko siber dan menghadapi lebih dari 11 juta serangan pada kuartal pertama di tahun 2022.13
Walaupun keterampilan pelestarian lingkungan, seperti pelaporan keberlanjutan, manajemen bisnis berkelanjutan, dan manajemen rantai pasokan tidak dianggap lebih penting (15%), keterampilan ini akan semakin penting karena meningkatnya kekhawatiran terkait keberlanjutan di negara tersebut. Indonesia adalah salah satu negara yang paling terpapar oleh risiko iklim, dengan tingkat kerentanan yang tinggi terhadap semua jenis banjir dan panas ekstrem. 14
Gambar 2: Keterampilan digital tingkat tinggi, seperti analisis dan visualisasi data, serta dukungan TI wajib dimiliki
Sebutkan jenis keterampilan digital yang wajib dimiliki, sebaiknya dimiliki, atau tidak diperlukan bagi tenaga kerja di sektor Anda saat ini (%)
Sumber: Economist Impact, 2023
Infrastruktur dan biaya yang tinggi menghambat akses ke peningkatan keterampilan
Karyawan di Indonesia sangat termotivasi untuk memperoleh keterampilan baru. Hampir separuh (49%) karyawan setuju bahwa upskilling atau reskilling berdampak tinggi terhadap peningkatan kinerja dalam pekerjaan mereka saat ini, dan 54% menyatakan bahwa hal tersebut berdampak tinggi dalam mengeksplorasi peran baru dan bidang minat mereka. Lebih dari satu dalam empat (27%) karyawan mengatakan bahwa akses internet yang buruk merupakan hambatan dalam memperoleh keterampilan digital yang baru. Nila Marita, direktur dan kepala urusan eksternal di GoTo—perusahaan induk dari dua perusahaan rintisan di Indonesia, Gojek and Tokopedia—setuju bahwa konektivitas internet “sangat penting untuk memperluas akses ke kesempatan belajar dan menjembatani kesenjangan ini agar lebih banyak penduduk Indonesia yang memperoleh keterampilan digital.” Mengatasi masalah akses adalah hal yang penting, karena karyawan memanfaatkan pelatihan online untuk belajar. Malahan, 54% karyawan mengatakan bahwa mereka memperoleh keterampilan digital di luar tempat kerja melalui pelatihan online.
Biaya yang tinggi (42%) juga merupakan hambatan utama bagi penduduk Indonesia untuk memperoleh keterampilan digital, dan perusahaan tidak cukup berinvestasi dalam menyediakan pelatihan bagi para pekerja.15 Selain itu, Indonesia memiliki sektor informal yang besar, yang menjadi mata pencaharian pekerja berpendapatan rendah, sehingga menimbulkan tantangan bagi karyawan untuk mengikuti program peningkatan keterampilan dan bagi pemerintah untuk menjangkau mereka.16 17
Gambar 3: Hambatan utama peningkatan keterampilan bagi karyawan di seluruh jenis keterampilan
Apa saja tiga hambatan utama yang Anda hadapi dalam mempelajari keterampilan baru? (%)
Sumber: Economist Impact, 2023
Tantangan lain yang disebutkan karyawan di sebagian besar keterampilan adalah tidak adanya waktu untuk mengikuti pelatihan baru. Para pekerja Indonesia menyatakan bahwa mereka memiliki beban kerja yang lebih tinggi setelah pandemi covid-19.18 Hal ini juga menunjukkan bahwa semakin pentingnya keterampilan manajemen mandiri, seperti manajemen waktu, resiliensi, dan toleransi terhadap stres (49%) bagi karyawan yang dilibatkan dalam survei kami.
Ekspektasi tinggi dari perusahaan
Menurut karyawan, perusahaan wajib mendukung perkembangan mereka di setiap kategori, selain menyediakan akses ke program peningkatan keterampilan yang beragam. Secara khusus, karyawan memandang perusahaan sebagai sumber utama informasi tentang keterampilan (57%), insentif finansial (54%), penghargaan (43%), dan dukungan bagi kesejahteraan mereka (35%).
Perusahaan dapat mengatasi berbagai hambatan yang dihadapi karyawan, seperti biaya yang tinggi dan keterbatasan waktu dengan menyubsidi akses ke program pelatihan dan mengintegrasikan lebih banyak sesi pelatihan di tempat kerja. “Baik pemerintah maupun sektor swasta di Indonesia telah meningkatkan upaya untuk mengembangkan kumpulan talenta beberapa tahun belakangan ini,” kata Marita dari GoTo. Misalnya, organisasi dan pemerintah meningkatkan kolaborasi dengan universitas untuk membekali mahasiswa dengan keterampilan yang diperlukan. Perusahaan swasta juga berupaya meningkatkan kemampuan instruktur dan bekerja sama dengan mereka untuk merancang kurikulum berdasarkan kebutuhan keterampilan perusahaan.
Gambar 4: Perusahaan dianggap paling bertanggung jawab untuk melaksanakan upskilling bagi penduduk Indonesia
Menurut Anda, siapa yang bertanggung jawab dalam mendukung karyawan terkait masalah-masalah berikut? (%)
Sumber: Economist Impact, 2023
Tujuh puluh tujuh persen, atau lebih tinggi dari rata-rata regional (66.5%), meyakini bahwa perusahaan saat ini lebih condong ke perekrutan berbasis keterampilan dibandingkan kualifikasi di atas kertas. Dalam konteks ini, upaya yang dilakukan pemerintah, lembaga pendidikan, dan perusahaan untuk mengomunikasikan keterampilan yang diperlukan, akan membantu tenaga kerja memprioritaskan keterampilan yang akan dipelajari. Sementara sebagian besar pekerja mengandalkan media sosial dan iklan (73%) untuk memperoleh informasi tentang keterampilan yang penting, program kesadaran pemerintah juga merupakan sumber penting bagi 50% karyawan.
Kolaborasi antarpemangku kepentingan adalah kunci untuk mengatasi kesenjangan keterampilan
Mengatasi kesenjangan akses dan infrastruktur adalah bagian yang tidak terpisahkan dalam mewujudkan potensi ekonomi digital Indonesia. Pemerintah telah melakukan upaya untuk mengatasi sejumlah masalah ini melalui berbagai program, seperti Kartu Prakerja, program upskilling online yang bertujuan memberikan pelatihan bagi satu juta orang dewasa menganggur dan berpendapatan rendah berusia 18-64 tahun.19 20 Program tersebut diselenggarakan dengan pendekatan menyeluruh, memberikan akses ke subsidi upskilling dan reskilling, pelatihan, dan lapangan kerja. Subsidi juga dapat bermanfaat dalam mendorong penyerapan keterampilan pelestarian lingkungan, yang menjadi motivasi terbesar untuk memperoleh keterampilan ini bagi satu dari tiga karyawan yang mengikuti survei. Program lain yang dilaksanakan oleh Kemeterian Komunikasi dan Informatika adalah Beasiswa Talenta Digital (Digital Talent Scholarship/DTS). Program tersebut bertujuan mengembangkan keterampilan dan meningkatkan daya saing tenaga kerja di Indonesia di sektor teknologi informasi dan komunikasi.21
Agar Indonesia dapat memaksimalkan potensi pemerolehan keterampilan digital, negara tersebut harus memperluas kesempatan ini bagi pekerja di usaha mikro, kecil, dan menengah (UMKM) yang menaungi 97% tenaga kerja di negara tersebut.22
Program pemerintah lain adalah Making Indonesia 4.0, sebuah peta jalan yang diluncurkan pada 2018 untuk mengakselerasi digitalisasi.23 Sejumlah elemen peta jalan ini disiapkan untuk membekali karyawan dengan pelatihan dan reskilling, karena teknologi semakin menjadi bagian yang tidak terpisahkan dalam proses industri. Selain itu, harus ada upaya untuk memperluas pemerataan akses ke peluang pengembangan keterampilan digital guna mengatasi kesenjangan keterampilan.
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 Secara umum, ekonomi informal merujuk pada ekonomi yang tidak terdaftar, yang berarti bahwa mereka tidak mendapatkan atau tidak cukup mendapatkan tunjangan kerja formal. Perusahaan pada umumnya tidak mematuhi peraturan, karena para pekerja tersebut tidak digolongkan secara resmi sebagai karyawan, sehingga membatasi akses mereka ke layanan pemerintah, termasuk kesejahteraan, perlindungan hak pekerja, dan program publik. Di Indonesia, 60% karyawan dipekerjakan oleh sektor informal dan memberikan kontribusi sebesar 22,7% terhadap PDB nasional (776 miliar dolar AS).
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
Fostering exploration and excellence in 21st century schools
The Great Resignation in Asia-Pacific
A trend that saw millions of people resign their jobs in the United States and then Europe in 2021, is now a matter of concern across the Asia-Pacific too. Talent shortages have been reported in Indonesia, Malaysia, the Philippines and Thailand among others, with companies struggling to retain and attract talent.
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Accelerating urban intelligence: People, business and the cities of tomorro...
About the research
Accelerating urban intelligence: People, business and the cities of tomorrow is an Economist Intelligence Unit report, sponsored by Nutanix. It explores expectations of citizens and businesses for smart-city development in some of the world’s major urban centres. The analysis is based on two parallel surveys conducted in 19 cities: one of 6,746 residents and another of 969 business executives. The cities included are Amsterdam, Copenhagen, Dubai, Frankfurt, Hong Kong, Johannesburg, London, Los Angeles, Mumbai, New York, Paris, Riyadh, San Francisco, São Paulo, Singapore, Stockholm, Sydney, Tokyo and Zurich.
Respondents to the citizen survey were evenly balanced by age (roughly one-third in each of the 18-38, 39-54 and 55 years and older age groups) and gender. A majority (56%) had household incomes above the median level in their city, with 44% below it. Respondents to the business survey were mainly senior executives (65% at C-suite or director level) working in a range of different functions. They work in large, midsize and small firms in over a dozen industries. See the report appendix for full survey results and demographics.
Additional insights were obtained from indepth interviews with city officials, smart-city experts at NGOs and other institutions, and business executives. We would like to thank the following individuals for their time and insights.
Pascual Berrone, academic co-director, Cities in Motion, and professor, strategic management, IESE Business School (Barcelona) Lawrence Boya, director, Smart City Programme, city of Johannesburg Amanda Daflos, chief innovation officer, city of Los Angeles Linda Gerull, chief information officer, city of San Francisco Praveen Pardeshi, municipal commissioner, Brihanmumbai Municipal Corporation (Mumbai) • Brian Roberts, policy analyst, city of San Francisco Sameer Sharma, global general manager, Internet of Things (IoT), Intel • Marius Sylvestersen, programme director, Copenhagen Solutions Lab Tan Kok Yam, deputy secretary of the Smart Nation and Digital Government, Prime Minister’s Office, SingaporeThe report was written by Denis McCauley and edited by Michael Gold.
Talent for innovation
Talent for innovation: Getting noticed in a global market incorporates case studies of the 34 companies selected as Technology Pioneers in biotechnology/health, energy/environmental technology, and information technology.
Leonardo Da Vinci unquestionably had it in the 15th century; so did Thomas Edison in the 19th century. But today, "talent for innovation" means something rather different. Innovation is no longer the work of one individual toiling in a workshop. In today's globalised, interconnected world, innovation is the work of teams, often based in particular innovation hotspots, and often collaborating with partners, suppliers and customers both nearby and in other countries.
Innovation has become a global activity as it has become easier for ideas and talented people to move from one country to another. This has both quickened the pace of technological development and presented many new opportunities, as creative individuals have become increasingly prized and there has been greater recognition of new sources of talent, beyond the traditional innovation hotspots of the developed world.
The result is a global exchange of ideas, and a global market for innovation talent. Along with growth in international trade and foreign direct investment, the mobility of talent is one of the hallmarks of modern globalisation. Talented innovators are regarded by companies, universities and governments as a vital resource, as precious as oil or water. They are sought after for the simple reason that innovation in products and services is generally agreed to be a large component, if not the largest component, in driving economic growth. It should be noted that "innovation" in this context does not simply mean the development of new, cutting-edge technologies by researchers.
It also includes the creative ways in which other people then refine, repackage and combine those technologies and bring them to market. Indeed, in his recent book, "The Venturesome Economy", Amar Bhidé, professor of business at Columbia University, argues that such "orchestration" of innovation can actually be more important in driving economic activity than pure research. "In a world where breakthrough ideas easily cross national borders, the origin of ideas is inconsequential," he writes. Ideas cross borders not just in the form of research papers, e-mails and web pages, but also inside the heads of talented people. This movement of talent is not simply driven by financial incentives. Individuals may also be motivated by a desire for greater academic freedom, better access to research facilities and funding, or the opportunity to work with key researchers in a particular field.
Countries that can attract talented individuals can benefit from more rapid economic growth, closer collaboration with the countries where those individuals originated, and the likelihood that immigrant entrepreneurs will set up new companies and create jobs. Mobility of talent helps to link companies to sources of foreign innovation and research expertise, to the benefit of both. Workers who emigrate to another country may bring valuable knowledge of their home markets with them, which can subsequently help companies in the destination country to enter those markets more easily. Analysis of scientific journals suggests that international co-authorship is increasing, and there is some evidence thatcollaborative work has a greater impact than work carried out in one country. Skilled individuals also act as repositories of knowledge, training the next generation and passing on their accumulated wisdom.
But the picture is complicated by a number of concerns. In developed countries which have historically depended to a large extent on foreign talent (such as the United States), there is anxiety that it is becoming increasingly difficult to attract talent as new opportunities arise elsewhere. Compared with the situation a decade ago, Indian software engineers, for example, may be more inclined to set up a company in India, rather than moving to America to work for a software company there. In developed countries that have not historically relied on foreign talent (such as Germany), meanwhile, the ageing of the population as the birth rate falls and life expectancy increases means there is a need to widen the supply of talent, as skilled workers leave the workforce and young people show less interest than they used to in technical subjects. And in developing countries, where there is a huge supply of new talent (hundreds of thousands of engineers graduate from Indian and Chinese universities every year), the worry is that these graduates have a broad technical grounding but may lack the specialised skills demanded by particular industries.
Other shifts are also under way. The increasing sophistication of emerging economies (notably India and China) is overturning the old model of "create in the West, customise for the East". Indian and Chinese companies are now globally competitive in many industries. And although the mobility of talent is increasing, workers who move to another country are less likely to stay for the long-term, and are more likely to return to their country of origin. The number of Chinese students studying abroad increased from 125,000 in 2002 to 134,000 in 2006, for example, but the proportion who stayed in the country where they studied after graduating fell from 85% to 69% over the same period, according to figures from the OECD (see page 10).
What is clear is that the emergence of a global market for talent means gifted innovators are more likely to be able to succeed, and new and unexpected opportunities are being exploited, as this year's Technology Pioneers demonstrate. They highlight three important aspects of the global market for talent: the benefits of mobility, the significant role of diasporas, and the importance of network effects in catalysing innovation.
Brain drain, or gain?
Perhaps the most familiar aspect of the debate about flows of talent is the widely expressed concern about the "brain drain" from countries that supply talented workers. If a country educates workers at the taxpayers' expense, does it not have a claim on their talent? There are also worries that the loss of skilled workers can hamper institutional development and drive up the cost of technical services. But such concerns must be weighed against the benefits of greater mobility.
There are not always opportunities for skilled individuals in their country of birth. The prospect of emigration can encourage the development of skills by individuals who may not in fact decide to emigrate. Workers who emigrate may send remittances back to their families at home, which can be a significant source of income and can help to alleviate poverty. And skilled workers may return to their home countries after a period working abroad, further stimulating knowledge transfer and improving the prospects for domestic growth, since they will maintain contacts with researchers overseas. As a result, argues a recent report from the OECD, it makes more sense to talk of a complex process of "brain circulation" rather than a one-way "brain drain". The movement of talent is not simply a zero-sum gain in which sending countries lose, and receiving countries benefit. Greater availability and mobility of talent opens up new possibilities and can benefit everyone.
Consider, for example, BioMedica Diagnostics of Windsor, Nova Scotia. The company makes medical diagnostic systems, some of them battery-operated, that can be used to provide health care in remote regions to people who would otherwise lack access to it. It was founded by Abdullah Kirumira, a Ugandan biochemist who moved to Canada in 1990 and became a professor at Acadia University. There he developed a rapid test for HIV in conjunction with one of his students, Hermes Chan (a native of Hong Kong who had moved to Canada to study). According to the United States Centers for Disease Control, around one-third of people tested for HIV do not return to get the result when it takes days or weeks to determine. Dr Kirumira and Dr Chan developed a new test that provides the result in three minutes, so that a diagnosis can be made on the spot. Dr Kirumira is a prolific inventor who went on to found several companies, and has been described as "the pioneer of Nova Scotia's biotechnology sector".
Today BioMedica makes a range of diagnostic products that are portable, affordable and robust, making them ideally suited for use in developing countries. They allow people to be rapidly screened for a range of conditions, including HIV, hepatitis, malaria, rubella, typhoid and cholera. The firm's customers include the World Health Organisation. Providing such tests to patients in the developing world is a personal mission of Dr Kirumira's, but it also makes sound business sense: the market for invitro diagnostics in the developing world is growing by over 25% a year, the company notes, compared with growth of only 5% a year in developed nations.
Moving to Canada gave Dr Kirumira research opportunities and access to venture funding that were not available in Uganda. His innovations now provide an affordable way for hospitals in his native continent of Africa to perform vital tests. A similar example is provided by mPedigree, a start-up that has developed a mobile-phone-based system that allows people to verify the authenticity of medicines. Counterfeit drugs are widespread in the developing world: they are estimated to account for 10-25% of all drugs sold, and over 80% in some countries. The World Health Organisation estimates that a fake vaccine for meningitis, distributed in Niger in 1995, killed over 2,500 people. mPedigree was established by Bright Simons, a Ghanaian social entrepreneur, in conjunction with Ashifi Gogo, a fellow Ghanaian. The two were more than just acquaintances having met at Secondary School. There are many high-tech authentication systems available in the developed world for drug packaging, involving radio-frequency identification (RFID) chips, DNA tags, and so forth.
The mPedigree system developed my Mr Gogo, an engineering student, is much cheaper and simpler and only requires the use of a mobile phone — an item that is now spreading more quickly in Africa than in any other region of the world. Once the drugs have been purchased, a panel on the label is scratched off to reveal a special code. The patient then sends this code, by text message, to a particular number. The code is looked up in a database and a message is sent back specifying whether the drugs are genuine. The system is free to use because the drug companies cover the cost of the text messages. It was launched in Ghana in 2007, and mPedigree's founders hope to extend it to all 48 sub-Saharan African countries within a decade, and to other parts of in the developing world.
The effort is being supported by Ghana's Food and Drug Board, and by local telecoms operators and drug manufacturers. Mr Gogo has now been admitted into a special progamme at Dartmouth College in the United States that develops entrepreneurial skills, in addition to technical skills, in engineers. Like Dr Kirumira, he is benefiting from opportunities that did not exist in his home country, and his country is benefiting too. This case of mPedigree shows that it is wrong to assume that the movement of talent is one-way (from poor to rich countries) and permanent. As it has become easier to travel and communications technology has improved, skilled workers have become more likely to spend brief spells in other countries that provide opportunities, rather than emigrating permanently.
And many entrepreneurs and innovators shuttle between two or more places — between Tel Aviv and Silicon Valley, for example, or Silicon Valley and Hsinchu in Taiwan — in a pattern of "circular" migration, in which it is no longer meaningful to distinguish between "sending" and "receiving" countries.
The benefits of a diaspora
Migration (whether temporary, permanent or circular) to a foreign country can be facilitated by the existence of a diaspora, since it can be easier to adjust to a new culture when you are surrounded by compatriots who have already done so. Some observers worry that diasporas make migration too easy, in the sense that they may encourage a larger number of talented individuals to leave their home country than would otherwise be the case, to the detriment of that country.
But as with the broader debate about migration, this turns out to be only part of the story. Diasporas can have a powerful positive effect in promoting innovation and benefiting the home country. Large American technology firms, for example, have set up research centres in India in part because they have been impressed by the calibre of the migrant Indian engineers they have employed in America. Diasporas also provide a channel for knowledge and skills to pass back to the home country.
James Nakagawa, a Canadian of Japanese origin and the founder of Mobile Healthcare, is a case in point. A third-generation immigrant, he grew up in Canada but decided in 1994 to move to Japan, where he worked for a number of technology firms and set up his own financial-services consultancy. In 2000 he had the idea that led him to found Mobile Healthcare, when a friend was diagnosed with diabetes and lamented that he found it difficult to determine which foods to eat, and which to avoid.
The rapid spread of advanced mobile phones in Japan, a world leader in mobile telecoms, prompted Mr Nakagawa to devise Lifewatcher, Mobile Healthcare's main product. It is a "disease selfmanagement system" used in conjunction with a doctor, based around a secure online database that can be accessed via a mobile phone. Patients record what medicines they are taking and what food they are eating, taking a picture of each meal. A database of common foodstuffs, including menu items from restaurants and fast-food chains, helps users work out what they can safely eat. Patients can also call up their medical records to follow the progress of key health indicators, such as blood sugar, blood pressure, cholesterol levels and calorie intake.
All of this information can also be accessed online by the patient's doctor or nutritionist. The system allows people with diabetes or obesity (both of which are rapidly becoming more prevalent in Japan and elsewhere) to take an active role in managing their conditions. Mr Nakagawa did three months of research in the United States and Canada while developing Lifewatcher, which was created with support from Apple (which helped with hardware and software), the Japanese Red Cross and Japan's Ministry of Health and Welfare (which provided full access to its nutritional database).
Japanese patients who are enrolled in the system have 70% of the cost covered by their health insurance. Mr Nakagawa is now working to introduce Lifewatcher in the United States and Canada, where obesity and diabetes are also becoming more widespread — along advanced mobile phones of the kind once only found in Japan. Mr Nakagawa's ability to move freely between Japanese and North American cultures, combining the telecoms expertise of the former with the entrepreneurial approach of the latter, has resulted in a system that can benefit both.
The story of Calvin Chin, the Chinese-American founder of Qifang, is similar. Mr Chin was born and educated in America, and worked in the financial services and technology industries for several years before moving to China. Expatriate Chinese who return to the country, enticed by opportunities in its fast-growing economy, are known as "returning turtles". Qifang is a "peer to peer" (P2P) lending site that enables students to borrow money to finance their education from other users of the site. P2P lending has been pioneered in other countries by sites such as Zopa and Prosper in other countries.
Such sites require would-be borrowers to provide a range of personal details about themselves to reassure lenders, and perform credit checks on them. Borrowers pay above-market rates, which is what attracts lenders. Qifang adds several twists to this formula. It is concentrating solely on student loans, which means that regulators are more likely to look favourably on the company's unusual business model. It allows payments to be made directly to educational institutions, to make sure the money goes to the right place. Qifang also requires borrowers to give their parents' names when taking out a loan, which increases the social pressure on them not to default, since that would cause the family to lose face.
Mr Chin has thus tuned an existing business model to take account of the cultural and regulatory environment in China, where P2P lending could be particularly attractive, given the relatively undeveloped state of China's financial-services market. In a sense, Qifang is just an updated, online version of the community group-lending schemes that are commonly used to finance education in China. The company's motto is that "everyone should be able to get an education, no matter their financial means".
Just as Mr Chin is trying to use knowledge acquired in the developed world to help people in his mother country of China, Sachin Duggal hopes his company, Nivio, will do something similar for people in India. Mr Duggal was born in Britain and is of Indian extraction. He worked in financial services, including a stint as a technologist at Deutsche Bank, before setting up Nivio, which essentially provides a PC desktop, personalised with a user's software and documents, that can be accessed from any web browser.
This approach makes it possible to centralise the management of PCs in a large company, and is already popular in the business world. But Mr Duggal hopes that it will also make computing more accessible to people who find the prospect of owning and managing their own PCs (and dealing with spam and viruses) too daunting, or simply cannot afford a PC at all. Nivio's software was developed in India, where Mr Duggal teamed up with Iqbal Gandham, the founder of Net4India, one of India's first internet service providers. Mr Duggal believes that the "virtual webtop" model could have great potential in extending access to computers to rural parts of India, and thus spreading the opportunities associated with the country's high-tech boom. A survey of the bosses of Indian software firms clearly shows how diasporas can promote innovation.
It found that those bosses who had lived abroad and returned to India made far more use of diaspora links upon their return than entrepreneurs who had never lived abroad, which gave them access to capital and skills in other countries. Diasporas can, in other words, help to ensure that "brain drain" does indeed turn into "brain gain", provided the government of the country in question puts appropriate policies in place to facilitate the movement of people, technology and capital.
Making the connection
Multinational companies can also play an important role in providing new opportunities for talented individuals, and facilitating the transfer of skills. In recent years many technology companies have set up large operations in India, for example, in order to benefit from the availability of talented engineers and the services provided by local companies. Is this simply exploitation of low-paid workers by Western companies?
The example of JiGrahak Mobility Solutions, a start-up based in Bangalore, illustrates why it is not. The company was founded by Sourabh Jain, an engineering graduate from the Delhi Institute of Technology. After completing his studies he went to work for the Indian research arm of Lucent Technologies, an American telecoms-equipment firm. This gave him a solid grounding in mobile-phone technology, which subsequently enabled him to set up JiGrahak, a company that provides a mobile-commerce service called Ngpay.
In India, where many people first experience the internet on a mobile phone, rather than a PC, and where mobile phones are far more widespread than PCs, there is much potential for phone-based shopping and payment services. Ngpay lets users buy tickets, pay bills and transfer money using their handsets. Such is its popularity that with months of its launch in 2008, Ngpay accounted for 4% of ticket sales at Fame, an Indian cinema chain.
The role of large companies in nurturing talented individuals, who then leave to set up their own companies, is widely understood in Silicon Valley. Start-ups are often founded by alumni from Sun, HP, Oracle and other big names. Rather than worrying that they could be raising their own future competitors, large companies understand that the resulting dynamic, innovative environment benefits everyone, as large firms spawn, compete with and acquire smaller ones.
As large firms establish outposts in developing countries, such catalysis of innovation is becoming more widespread. Companies with large numbers of employees and former employees spread around the world can function rather like a corporate diaspora, in short, providing another form of network along which skills and technology can diffuse. The network that has had the greatest impact on spreading ideas, promoting innovation and allowing potential partners to find out about each other's research is, of course, the internet. As access to the internet becomes more widespread, it can allow developing countries to link up more closely with developed countries, as the rise of India's software industry illustrates. But it can also promote links between developing countries.
The Cows to Kilowatts Partnership, based in Nigeria, provides an unusual example. It was founded by Joseph Adelagan, a Nigerian engineer, who was concerned about the impact on local rivers of effluent from the Bodija Market abattoir in Ibadan. As well as the polluting the water supply of several nearby villages, the effluent carried animal diseases that could be passed to humans. Dr Adelagan proposed setting up an effluent-treatment plant.
He discovered, however, that although treating the effluent would reduce water pollution, the process would produce carbon-dioxide and methane emissions that contribute to climate change. So he began to look for ways to capture these gases and make use of them. Researching the subject online, he found that a research institution in Thailand, the Centre for Waste Utilisation and Management at King Mongkut University of Technology Thonburi, had developed anaerobic reactors that could transform agro-industrial waste into biogas. He made contact with the Thai researchers, and together they developed a version of the technology
suitable for use in Nigeria that turns the abattoir waste into clean household cooking gas and organic fertiliser, thus reducing the need for expensive chemical fertiliser. The same approach could be applied across Africa, Dr Adelagan believes. The Cows to Kilowatts project illustrates the global nature of modern innovation, facilitated by the free movement of both ideas and people. Thanks to the internet, people in one part of the world can easily make contact with people trying to solve similar problems elsewhere.
Lessons learned
What policies should governments adopt in order to develop and attract innovation talent, encourage its movement and benefit from its circulation? At the most basic level, investment in education is vital. Perhaps surprisingly, however, Amar Bhidé of Columbia University suggests that promoting innovation does not mean pushing as many students as possible into technical subjects.
Although researchers and technologists provide the raw material for innovation, he points out, a crucial role in orchestrating innovation is also played by entrepreneurs who may not have a technical background. So it is important to promote a mixture of skills. A strong education system also has the potential to attract skilled foreign students, academics and researchers, and gives foreign companies an incentive to establish nearby research and development operations.
Many countries already offer research grants, scholarships and tax benefits to attract talented immigrants. In many cases immigration procedures are "fast tracked" for individuals working in science and technology. But there is still scope to remove barriers to the mobility of talent. Mobility of skilled workers increasingly involves short stays, rather than permanent moves, but this is not yet widely reflected in immigration policy. Removing barriers to short-term stays can increase "brain circulation" and promote diaspora links.
Another problem for many skilled workers is that their qualifications are not always recognised in other countries. Greater harmonisation of standards for qualifications is one way to tackle this problem; some countries also have formal systems to evaluate foreign qualifications and determine their local equivalents. Countries must also provide an open and flexible business environment to ensure that promising innovations can be brought to market. If market access or financial backing are not available, after all, today's global-trotting innovators increasingly have the option of going elsewhere.
The most important point is that the global competition for talent is not a zero-sum game in which some countries win, and others lose. As the Technology Pioneers described here demonstrate, the nature of innovation, and the global movement of talent and ideas, is far more complicated that the simplistic notion of a "talent war" between developed and developing nations would suggest. Innovation is a global activity, and granting the greatest possible freedom to innovators can help to ensure that the ideas they generate will benefit the greatest possible number of people.
Integrated Transformation: How rising customer expectations are turning com...
Modern customers have it good. Spoilt for choice and convenience, today’s empowered consumers have come to expect more from the businesses they interact with. This doesn’t just apply to their wanting a quality product at a fair price, but also tailored goods, swift and effective customer service across different channels, and a connected experience across their online shopping and in-store experience, with easy access to information they need when they want it.
Meeting these expectations is a significant challenge for organisations. For many, it requires restructuring long-standing operating models, re-engineering business processes and adopting a fundamental shift in mindset to put customer experience at the heart of business decision- making. Download our report to learn more.
From the notebook to the cloud: How EdTech is revolutionizing learning in Latin America
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Fostering exploration and excellence in 21st century schools
The giving chain: How philanthropy is driving progress in Asian education
Education is widely seen as the main driver of long-term social impact in Asia, and educational philanthropists are increasingly targeting innovative projects that help marginalised and deprived communities.
How to contribute wisely to education in Asia? Read the report >>Sparking economic progress through education
Through Q&As with luminaries in a number of sectors across the world, interviews aim to surface insights for policy makers, business leaders and other stakeholders as they consider actions to improve the quality of, and access to, education, to fortify their country’s economic, social and geopolitical fabric.
The series is supported by The International Commission on Financing Global Education Opportunity, which just presented a report urging governments to expand access to education to the UN Secretary-General, Mr Ban Ki-moon, and the Commission Co-Convenors during the UN General Assembly in New York.
The report, entitled "The Learning Generation: Investing in Education for a Changing World,” underscores the importance of quality education to address the social, economic, and security challenges of our time. For more on the report please go to educationcommission.org
직무역량 격차 해소: 한국 경제 성장 견인을 위한 인재 양성의 동력
아태 지역 14개 시장을 중심으로 진행된 이번 설문조사의 응답자 중 11.8%는 Z세대(1997~2012년생), 63.2%는 밀레니얼 세대(1981~1996년생)이며, 25%는 X세대(1965~1980년생)인 것으로 나타났다. 응답자가 종사하는 산업 분야는 다양했다1.
연구에 따르면 아태 지역 전반에 걸쳐 미래에 필요한 직무역량과 이러한 역량을 개발하기 위한 최선의 방법에 관해 기업과 근로자 간 시각 차가 있는 것으로 나타났다. 또한 일부 문항을 보면 기업이 원하는 직무역량과 근로자가 갖고 있는 직무역량이 서로 불일치하는 모습도 드러났다. 미래 경제에 대비된 인적 자원을 배출하기 위해서는 이러한 격차에 대한 이해가 전제되어야 한다.
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Bridging the skills gap: fuelling careers and the economy in Asia-Pacific
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), IndiaBridging the skills gap: Fuelling careers and the economy in Thailand
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
Bridging the skills gap: Fuelling careers and the economy in Indonesia
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
การปิดช่องว่างด้านทักษะ: การพัฒนาอาชีพการงานและระบบเศรษฐกิจของไทย
ผู้ตอบแบบสำรวจมาจาก 14 ตลาดในภูมิภาคนี้ โดยที่ 11.8% เป็นคนเจนซี (Gen Z) (ผู้ที่เกิดในปี 1997-2012), 63.2% เป็นคนกลุ่มมิลเลนเนียล (เกิดในปี 1981-1996) และ 25% เป็นคนเจนเอ็กซ์ (Gen X) (เกิดในปี 1965-1980) บุคคลเหล่านี้ทำงานในอุตสาหกรรมต่างๆ ที่หลากหลาย
18206
Related content
Bridging the skills gap: fuelling careers and the economy in Asia-Pacific
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), IndiaBridging the skills gap: Fuelling careers and the economy in Indonesia
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
Bridging the skills gap: Fuelling careers and the economy in the Philippine...
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 the Philippines. This series complements a research paper that looks at the reskilling and upskilling imperative across APAC.
Key findings
Self-management skills (68%) such as stress tolerance, resilience and flexibility are the most important for employees, closely followed by digital skills (52%).
Within digital skills, advanced skills such as IT support (65.4%), data analysis and visualisation (55.8%) and cybersecurity (59.6%) would be key to supporting growth in the Philippines, and are selected as “must have” capabilities by the employees. Employees in the Philippines prioritise artificial intelligence (AI) and machine learning (ML) skills at higher rates (42.3%) than the regional average (32.8%).
Online courses are a key source of new digital skills for 57%, higher than the regional average (42%). However, poor internet access (41%), lack of time (40%) and high cost of courses (30%) limits employees’ digital upskilling.
A strong post-covid economic recovery1 sets context for the labour market in the Philippines. The country’s economy is expected to grow by 6% in 2023—and by 6.2% in 2024—on the back of rising domestic demand and a post-covid rebound in the services sectors.2
The country’s tech sector is projected to grow rapidly with the estimated value of the digital economy reaching US$150bn in the next decade3 while the internet economy is expected to more than double between 2020 and 2025.4 This massive growth will require the right capabilities and diverse skill sets in the labour market. According to the IT-BPM Association of the Philippines, by 2028 the tech industry is expected to generate 1.1m new jobs in the country, of which 150,000 are developer roles that would need to be filled in the next six years.5
Despite this momentum, many in the Philippines lack even basic skills to contribute effectively. Almost 90% of the country’s population lacks basic ICT skills such as word-processing, internet and email skills.6 The government is taking action to address these gaps. Most recently, the newly established Inter-Agency Council for Development and Competitiveness of Philippine Digital Workforce announced plans to undertake a skills mapping exercise to identify gaps in the area of digital and ICT capabilities such as engineering, cloud computing, artificial intelligence, web development and management, and e-commerce marketing etc.7
Advanced digital skills are rising in importance
According to the Economist Impact survey, 68% of employees in the Philippines pick self-management skills as a top important skill category for workers to acquire, higher than the regional average (53%). These skills encompass aspects such as time management, active learning, resilience, stress tolerance and flexibility. The rising importance of these skills could be an outcome of hybrid working models with demands on managers and teams to work online more adeptly. Doreen Cooper, an independent learning facilitator based in the Philippines, suggests this could also be “due to a deep-rooted culture in the country that could benefit from encouraging self-discipline and a strong work ethic”.
Figure 1: Top skills in demand in the Philippines
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
Digital skills emerge as another important skills category. Basic digital skills are considered a must-have by 71.2% of employees. At the same time, they also prioritise advanced digital skills such as IT support, cybersecurity, and data analysis and visualisation, higher than the regional average. IT skills are essential to the country’s major business process outsourcing (BPO) sector, which contributes nearly US$30 bn to GDP every year to the Filipino economy.8 The Philippines faces a shortage of 200,000 workers with IT skills, as noted by a recent Jobstreet report.9
Figure 2: Must-have advanced digital skills for employees in the Philippines vs APAC
Which specific types of advanced digital skills are a must have for the workforce in your sector today? (% of respondents)
Source: Economist Impact, 2023
Compared to their regional peers (32.8%), employees in the country demonstrate a stronger preference for AI and machine learning skills (42.3%). This reflects the rising government focus on AI: In 2021, the country launched an AI roadmap that aims to accelerate the adoption of AI to “advance industrial development, generate better quality entrepreneurship as well as high-paying opportunities for Filipinos”.10
Fast digitalisation and greater internet usage in the economy means that the country also faces higher security risks, reflected in the importance given to cybersecurity skills – three in four Filipino businesses experienced a cyber incident in 2022, as against a regional average of 59%.11 A 2022 report from USAID noted a possible loss of US$23bn in the business process outsourcing industry in absence of cybersecurity capabilities. One reason, the report found, is a lack of clear definitions of job roles and responsibilities in the area.12
On the other hand, green skills had minor importance for Filipino employees—only 13% ranked them as important, somewhat lower than the regional average (17.7%). This is likely to change however as the Philippines is one of the most vulnerable countries to climate change.13 If no action is taken, the Philippines risks losing 6% of its GDP every year by 2100.14
Infrastructural barriers to upskilling, despite high employee motivations
Employee motivations to upskill vary. Easy access and availability of free online courses (37%) are employees’ biggest motivator to acquire digital skills, followed by higher pay and bargaining power (33%) and exploring new job opportunities (29%). Ms Cooper explains, “by and large, employees want to learn skills that enable them to perform better in their jobs, and earn more as well as get promoted,” aligning with findings that career progression is a significant motivator for employees in the Philippines.
Figure 3: Motivations to acquire different skills
What best describes your motivation to acquire new skills? (% of respondents)
Source: Economist Impact, 2023
Despite high motivations, the biggest barrier to acquiring new digital skills is poor internet access to join online courses (41%). This issue is especially challenging for the country’s upskilling needs as more than half (57%) rely on online courses as a top source of digital upskilling, substantially more than the regional average (42%). Despite having high levels of internet penetration and usage, the Philippines struggles with poor internet performance and high costs. More than 50% of the country’s population could not afford even a basic package of mobile internet, as per a recent study. 15
Another challenge cited by four in ten employees was a lack of time in learning new courses. Employees working in sectors such as media, healthcare, marketing and advertising work report working beyond 40 hours per week.16 Additionally, nearly 50% of the workers from the Philippines in a research said to have experienced workplace stress – the highest percentage in Southeast Asia.17 Besides lack of time and workplace stress, high cost of courses was another challenge highlighted by 30% of employees in our survey in learning new digital skills. The country has one of the most expensive education systems in the Southeast Asian region18, making the cost of courses a big hurdle in upskilling the workforce.
Figure 4: Poor internet access, a lack of time and the high cost of courses are key barriers to upskilling
What are some of the most significant obstacles that you face while learning new digital skills? (% of respondents)
Source: Economist Impact, 2023
Public-private partnerships will be a key driver of progress
According to the Economist Impact survey, employers are considered to have greater responsibility for providing notable recognition such as certificates (64%), information on skills needed for different roles (58%) and financial incentives (55%). Government, on the other hand, is considered most responsible for providing access to diversified skilling programmes by 50% of employees. Ms Cooper highlights the government is already playing some part in this area by offering free seminars and workshops that are available to the public. So are employers– six in ten Filipino firms offer training to their workers, higher than the OECD average (less than 40%).19
Employers have an opportunity to leverage employees’ strong motivation to upskill if they can improve access to online training programmes, but more efforts are needed to integrate skilling into workers’ everyday routines. Ms Cooper adds that, “employees are far more likely to attend training if it is mandated by their employers.” Employers should also look to offer more opportunities for workers to learn on the job. This can enable employers to foster a strong culture of learning, while providing employees with career progression opportunities that drive better results. The government and employers could also do more to provide information on what skills are valuable. Currently, 63% of employees get their information about skills from social media, and only around 48% from government awareness programmes or from events in office and through employers.
Figure 5: Employers have a key role in supporting employees’ upskilling
In your opinion, are the government, your employer or yourself responsible for supporting employees regarding the following issues? (% of respondents)
Source: Economist Impact, 2023
Moving forward, collaboration between the government and private sector could also foster a strong skills ecosystem in the country. For example, the Philippines Skills Framework to upskill and reskill the country’s workforce is built on the partnership of nine government agencies.20 The country is also proactively encouraging public-private partnerships for the growth of specific skill sets. For instance, a 2022 law seeking to develop digital workforce commissions the government to enter into public-private partnerships with stakeholders in the skills ecosystem in order to develop digital careers of the workforce.21
1 https://www.eiu.com/n/philippines-economic-recovery-remains-strong/#:~:text=On%20May%2012th%20the%20Philippines,7.7%25%20in%20the%20previous%20quarter
2 https://www.adb.org/news/philippine-economy-post-robust-growth-2023-2024-despite-inflation-pressures-adb
3 https://www.bworldonline.com/technology/2023/01/05/496484/govt-online-shift-may-boost-philippine-digital-economy/
4 https://accesspartnership.com/growing-digital-economy-philippines/
5 https://mb.com.ph/2022/09/27/bridging-the-skills-gaps/
6 https://www.unescap.org/kp/2022/workforce-we-need-social-outlook-asia-and-pacific
7 https://hrmasia.com/upskilling-the-digital-skills-of-workers-in-the-philippines/
8 https://www.nexford.org/insights/the-future-of-bpos-in-the-philippines-and-growth-opportunities
9 https://www.philstar.com/business/2022/02/03/2158115/higher-demand-seen-tech-professionals
10 https://opengovasia.com/the-philippines-launches-national-ai-roadmap/
11 https://www.kroll.com/en/insights/publications/cyber/apac-state-incident-response/philippines
12 https://www.gmanetwork.com/news/money/companies/854521/cybersecurity-gaps-could-jeopardize-75-of-philippines-bpo-market-usaid-report/story/
13 https://reliefweb.int/report/philippines/philippines-country-climate-and-development-report-2022#:~:text=Multiple%20indices%20rank%20the%20Philippines,for%20the%20past%2010%20years
14 https://niccdies.climate.gov.ph/climate-change-impacts
15 https://www.bworldonline.com/infographics/2022/04/18/442463/philippines-most-internet-poor-in-southeast-asia/
16 https://www.spot.ph/newsfeatures/the-latest-news-features/88589/industries-with-long-work-hours-in-the-philippines-a833-20220211
17 https://www.gallup.com/workplace/349484/state-of-the-global-workplace-2022-report.aspx?thank-you-report-form=1
18 https://www.studocu.com/ph/document/university-of-science-and-technology-of-southern-philippines-claveria/chemistry/the-high-cost-of-education-in-the-philippines-challenges-and-opportunities-article/47434059
19 https://read.oecd-ilibrary.org/education/towards-a-skills-strategy-for-southeast-asia_6db0907f-en#page22
20 https://samarnews.com/news2021/jun/f444.htm
21 https://www.gmanetwork.com/news/topstories/nation/840238/bill-seeking-to-develop-competitive-digital-workforce-lapses-into-law/story/
Bridging the skills gap: Fuelling careers and the economy in Thailand
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.
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Related content
Bridging the skills gap: fuelling careers and the economy in Asia-Pacific
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), IndiaBridging the skills gap: Fuelling careers and the economy in Indonesia
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
Bridging the skills gap: Fuelling careers and the economy in Pakistan
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 Pakistan. This series complements a research paper that looks at the reskilling and upskilling imperative across APAC.
Key findings
Digital skills (57.3%) are a top priority for employees in Pakistan owing to a booming IT sector and the country’s rapidly growing freelancer market, which is the third fastest growing market globally#_ftn1" name="_ftnref1" title="">[1]. Recent acceleration of digitalisation has resulted in higher demand for basic digital skills (72.1%).#_ftn2" name="_ftnref2" title="">[2] #_ftn3" name="_ftnref3" title="">[3] Employees in Pakistan are motivated to acquire digital skills to improve career progression and promotion opportunities (29.3%), as well as to secure better pay and bargaining power (23%). Both the government and employers have important yet distinct roles to play in upskilling Pakistan: while employees expect the government to provide financial incentives, they point to employers as being responsible for providing access to diversified skilling programmes and information on the skills needed for different roles.Despite rising digital penetration in Pakistan in recent years, 46% of the population still lacks internet access.#_ftn4" name="_ftnref4" title="">[4] While 80% of adults live in areas served by mobile broadband, many still do not access the internet.#_ftn5" name="_ftnref5" title="">[5] Out of a total of 182 m mobile subscriptions, only 38 m belong to women.#_ftn6" name="_ftnref6" title="">[6] This could be a result of the low female literacy rate (48%),#_ftn7" name="_ftnref7" title="">[7] which is far below the overall literacy rate of around 60%.#_ftn8" name="_ftnref8" title="">[8] Moreover, the female labour force participation rate is among the lowest globally (25%) and women are mostly employed in the informal sector.#_ftn9" name="_ftnref9" title="">[9] On the other hand, the country struggles with youth unemployment. Almost a third (31%) of the educated youth with professional degrees was unemployed in 2022.#_ftn10" name="_ftnref10" title="">[10]
Amid this backdrop, the government is prioritising digitalisation and implementing initiatives to close the existing skills gap. For instance, Pakistan introduced its “Digital Pakistan” roadmap in 2018, which set out a number of policies and initiatives to help the economy to realise US$59.7 bn (PKR9.7 trn) in annual value by 2030.#_ftn11" name="_ftnref11" title="">[11] The policy targets the upskilling and reskilling of young graduates and the existing workforce to support the country’s growing digital economy and help spur freelance IT sector exports. On this front, it hopes to reach US$3 billion by 2024, up from US$2.12 billion in 2021.#_ftn12" name="_ftnref12" title="">[12]
Infrastructure obstacles—such as inequitable internet access across the country and a lack of sufficient digital skills training—have lowered the pace of digitalisation at workplaces, says Saad Gilani, a senior programme officer at the International Labour Organization (ILO).
Pakistan’s growing freelance economy boosts digital upskilling
More than half of employees (57.3%) in Economist Impact’s survey consider digital skills the most important to acquire. Within this broad category, most employees consider basic digital skills (72.1%) as the most important to have, a trend that reflects the country's struggles with basic digitalisation. Advanced digital skills are also considered must-haves by employees in Pakistan such as data analysis and visualisation (49.2%), digital marketing and e-commerce (47.7%), and IT support (40%).
Apart from the pandemic, which motivated many employees (34.7%) in the country to upskill, free online courses (33.3%) have enabled people to acquire new digital skills. One such initiative, the government's e-rozgaar platform, provides online training to budding freelancers.#_ftn13" name="_ftnref13" title="">[13] #_ftn14" name="_ftnref14" title="">[14] Additionally, Pakistan’s digital freelance market surged by 69% annually in 2020, which registered especially strong gains for women, who often struggle to achieve equity in traditional education and labour force participation.#_ftn15" name="_ftnref15" title="">[15]
For Mr Gilani, the success of the freelance market falls in line with his observations that young employees in Pakistan are highly self-motivated to upskill to remain relevant in the job market. “There are not many employer-led initiatives, so employees are learning by themselves,” he says.
Apart from digital skills, employees in Pakistan point to the importance of self-management (53.3%) and soft skills (46.7%). For example, 71.4% consider adaptability and flexibility a high priority, compared with the regional average of 65.5%. Similarly, 81.5% report communication skills as a “must-have”, higher than the regional average of 70.9%. Mr Gilani suggests these findings reflect the fact that soft skills are applicable across diverse job roles and industries. Soft skills attainment also appears to be linked to digital capabilities—around 81% of employees in Pakistan agree that digital skills have helped them gain confidence and improve in other areas like communication, analysis and critical thinking.
Although green skills (10.7%) are not considered a key priority for employees in Pakistan, Mr Gilani says this is an area for concern given the climate change risks impacting the country.#_ftn16" name="_ftnref16" title="">[16] This vulnerability heightened in 2022, when intense rainfall resulted in devastating flood waters, causing 1,100 deaths and affecting 33m individuals.#_ftn17" name="_ftnref17" title="">[17]
Barriers to upskilling Pakistan
Employees in our survey point to a lack of time (37.3%) and poor workplace culture of learning (32%) as barriers to acquiring new skills. These findings are relevant as most employees report workplace training (54.7%) as a key source of learning new digital skills, emphasising the need for more skilling opportunities in offices.
Another key issue, Mr Gilani says, is the mismatch between university course offerings and industry demand. “There is a high tendency for unemployment among the highly educated youth, stemming from problems in our education system—we don’t see universities inviting companies to tell students what they are looking for and employers aren’t sharing information with educational institutes”. In addition to focusing on university degrees, employers could also consider employees’ skillsets as an important signal for hiring new talent. Nearly 67% of surveyed employees believe that employers in Pakistan are hiring based on skills-based qualifications rather than full-time degrees.
Distinct expectations from government and employers
Faced with the high costs of reskilling and upskilling, more than half (52%) of employees consider the government responsible for providing financial incentives for upskilling. For instance, 29.3% cite government subsidies as a major motivator for acquiring specific skills such as green skills. Providing funding for green skills can bolster Pakistan’s capacity to adapt to a changing climate, says Mr Gilani. He suggests that greater investments in green skills and industries could improve the country’s access to renewable energy sources, reduce its climate resilience and create jobs.
Across all skill types, employers also have an instrumental role in upskilling and reskilling employees. More than four in ten survey respondents say employers have a role to play in providing access to diversified skilling programmes (42.7%) and information on the skills needed for different roles (41.3%). Over a third of employees also consider the government responsible for providing information on skills needed for different roles.
Leaving no one behind
Pakistan is undergoing a pivotal shift in its economy as digital transformation gains momentum. A large part of its success will hinge on leaving no one behind and giving an equal opportunity to everyone including women, young graduates and freelancers, which will boost the country's workforce significantly. Mr Gilani highlights the importance of government’s leadership and direction in providing an overall direction to this skills ecosystem, “If there is consistent leadership, digital skilling policy and an ecosystem, then things can be done.” And while digital skills will continue to be important as the country grows and digitalises in the next few years, analytical and soft skills will be equally important.
#_ftnref1" name="_ftn1" title="">[1]https://dailytimes.com.pk/818869/pakistan-becomes-the-4th-fastest-growin... #_ftnref2" name="_ftn2" title="">[2] Basic digital skills are defined in the survey as the ability to operate basic office software, i.e. Microsoft Office, and/or set up Internet and digital communication tools. #_ftnref3" name="_ftn3" title="">[3] Pakistan is the third-fastest growing freelancer market globally. [Source: http://onlinelabourobservatory.org/oli-supply/] #_ftnref4" name="_ftn4" title="">[4]https://www.pta.gov.pk/en/telecom-indicators #_ftnref5" name="_ftn5" title="">[5] https://www.gsma.com/asia-pacific/wp-content/uploads/2022/11/Making-Digi... #_ftnref6" name="_ftn6" title="">[6] https://onlinelibrary.wiley.com/doi/epdf/10.1111/rode.12994 #_ftnref7" name="_ftn7" title="">[7]#Female_Literacy_Rate_In_Pakistan_2022">https://ilm.com.pk/pakistan/pakistan-information/male-and-female-literac... #_ftnref8" name="_ftn8" title="">[8] https://tribune.com.pk/story/2322073/literacy-and-pakistan #_ftnref9" name="_ftn9" title="">[9] 2021 World Bank estimates, https://www.worldbank.org/en/results/2022/07/07/supporting-legal-reforms... #_ftnref10" name="_ftn10" title="">[10] https://tribune.com.pk/story/2342344/over-31-of-educated-youth-unemployed-reveals-pide #_ftnref11" name="_ftn11" title="">[11] https://accesspartnership.com/pakistans-pkr97-trillion-digital-potential/ #_ftnref12" name="_ftn12" title="">[12] https://www.thenews.com.pk/print/887910-govt-eyes-3bln-from-freelancing-it-exports-by-2024 #_ftnref13" name="_ftn13" title="">[13] https://erozgar.pitb.gov.pk/ #_ftnref14" name="_ftn14" title="">[14] https://pubs.payoneer.com/docs/2020-gig-economy-index.pdf #_ftnref15" name="_ftn15" title="">[15] https://pubs.payoneer.com/docs/2020-gig-economy-index.pdf #_ftnref16" name="_ftn16" title="">[16] https://edition.cnn.com/2022/08/30/asia/pakistan-climate-crisis-floods-justice-intl/index.html #_ftnref17" name="_ftn17" title="">[17] https://www.weforum.org/agenda/2022/09/pakistan-floods-what-role-did-climate-change-play/Thu hẹp khoảng cách: thúc đẩy nghề nghiệp và nền kinh tế ở Việt Nam
Economist Impact, với sự hỗ trợ của Google, đã thực hiện một cuộc khảo sát với hơn 1.375 người lao động ở khu vực Châu Á-Thái Bình Dương (APAC), trong đó có 100 người ở Việt Nam, từ tháng 11 năm 2022 đến tháng 1 năm 2023. Chúng tôi cũng phỏng vấn các nhà tuyển dụng và chuyên gia trong ngành trên khắp khu vực để hiểu rõ quan điểm của họ về khoảng cách kỹ năng cũng như nguyện vọng đào tạo lại và nâng cao kỹ năng.
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Bridging the skills gap: Fuelling careers and the economy in Australia
Economist Impact, supported by Google, conducted a survey of 1,375 employees across Asia-Pacific (APAC), including 100 employees from Australia, 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 Australia. This series complements a research paper that looks at the reskilling and upskilling imperative across APAC.
Key findings
The rapid digitalisation of businesses in Australia places digital skills (47%) as a key focus area for both employees and employers. Within the broader category of digital skills, advanced capabilities in data analysis and visualisation (38%), cybersecurity (34%) and IT support (34%) are considered must-haves. Australian employees are strongly motivated to upskill, with 40% saying that it highly impacts their ability to find more meaningful careers. For 61% of Australians, meaningful careers trump ones with higher pay (16%) and flexibility (32%). A majority of employees in our survey (67%) consider self-management skills such as time-management and active learning as essential, and more important than all other skills, for the workforce today.As Australian businesses digitalise rapidly, 87% of job roles are expected to require digital literacy.1 The need for digital skills is not only confined to the ICT sector, but also in adjacent industries such as finance, healthcare and government.2 However, demand is outpacing the current supply: every year, only 6,500 IT graduates are available to fill the annual demand for 60,000 workers.3 The National Skills Commission reported that the number of occupations struggling to fill positions had doubled between 2021 and 2022.4 Vacancy rates in tech are 60% higher than the national average and, without appropriate action, Australia will be short on 186,000 workers.5
Moreover, the Australian government and tech sector have jointly committed to create 1.2m tech jobs by 2030, which requires adding 653,000 people to the existing workforce.6
Increased importance of self-management and advanced digital skills
According to the Economist Impact survey, 67% of Australian employees prioritise bettering their self-management7 skills, higher than the regional average (53%). Skills such as time-management and active learning are becoming essential across different industries, highlights Patrick Kidd, chief executive officer, Digital Skills Organisation, Australia. He says “these skills are applicable across all industries and different job roles, and are becoming increasingly important.”
Figure 1: Australian employees prioritise self-management over other skills
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
Nonetheless, almost half (47%) of employees consider digital skills as the most important for the workforce today. Within digital skills, advanced capabilities in data analysis and visualisation (38%), cybersecurity (34%) and IT support (34%) are considered must-haves. Phil Loveder, the executive manager of inform and engage at the National Centre for Vocational Education Research (NCVER), Australia, highlights the rising skills gap in cybersecurity. On this, he explains, “data confidentiality, protection and privacy is a massive issue in Australia, and we can’t get enough cybersecurity people at the moment.” On its current trajectory, Australia will be short of 30,000 cyber professionals by 2026.8
As the Australian tech sector has ballooned to a US$429.6bn market,9 so too has the country’s vulnerability to cybercrime, which costs an estimated US$1bn annually.10 The government has recognised the issue and allocated US$1.35bn to boost growth in the cybersecurity industry.11 This, in turn, has resulted in an industry-wide surge in demand for cybersecurity capabilities, with IT teams looking to drive technological progress.12
Figure 2: Must-have, good-to-have and not needed digital skills for employees in Australia
Indicate the desirability of specific digital skills for the workforce in your sector today? (% of respondents)
Source: Economist Impact, 2023
Australia lags in green skills uptake, with only 12% of employees considering these essential to acquire. The country has grappled with perceptions of being a laggard on climate action when compared with other developed OECD economies.13 14 This is likely to change in the coming years, as Australia has committed to ambitious carbon emissions targets.15 Mr Loveder adds that a “substantial move towards green technologies” will create greater momentum, which will in turn drive up green reskilling.
Australians know that upskilling has real benefits, but barriers remain
Across all skillsets, Australian employees demonstrate a strong sense of personal initiative to upskill—for career progression, promotion opportunities and to improve their current job performance. Updating their skillset has positively impacted their salaries and bargaining power (71%) as well as their ability to find more meaningful careers (71%).
Figure 3: Upskilling has a high impact on Australians’ salaries, bargaining power and careers
Based on your experience, rate the impact that upskilling and reskilling have had on your role or career? (% of respondents)
Source: Economist Impact, 2023
Yet, barriers limit Australians’ access to skilling resources. When it comes to acquiring digital or analytical skills, Australian employees cite the high cost of courses as the biggest barrier, picked by 32% and 36% of respondents respectively. Soaring university fees16 could limit employees’ access to analytical skills, which respondents report are largely acquired in-person at the tertiary level or at coaching institutes (32%). Meanwhile, 34% of employees found it challenging to acquire soft skills due to difficulties in attending in-person courses, leading most to rely on self-learning (46%) to upskill in this area.
Figure 4: Employees face barriers to upskilling due to a lack of resources and time
What are the top barriers you face in learning digital, analytical and soft skills? (% of respondents)
Source: Economist Impact, 2023
Public-private partnerships bolster access to information and funding
To address these barriers, experts reinforce the key role of employers in creating the right environment for learning. Employers could enable employees to retrain through online programmes, which tend to be less resource-intensive than in-person courses and can be especially effective for mass upskilling, says Mr Kidd. Despite these advantages, only 30% of employees in our survey believe that employers value online certificates. However, this could change, as 61% of employees also say their employers are shifting the focus of hiring from valuing full-time degrees to skill-based qualifications, a shift to focusing on the skills themselves rather than methods of learning.
While employees in our survey place the primary responsibility of upskilling on employers, they also consider the government as playing an important role through providing financial incentives (48%) and access to diversified reskilling programmes (44%). In recent years, the government has allocated around US$1bn towards supporting free or low fee training for jobseekers and young people.17 “Other examples cited by Mr Loveder include financial supports by governments aimed at easing the costs to students undertaking higher-level training in courses that address workplace and industry needs”.
The government and employers can also work together to address the information gap on skills. Currently, 63% of employees look to their employer for information on the skills needed for different roles, compared with 37% who consider the government most responsible. Given the government’s greater access to data and cross-industry information, it could support the business community by better defining a skills taxonomy to support hiring processes and employees’ upskilling plans. Doing so would also help in developing diverse skilling programmes that target the skills gap.
As Australia looks ahead, employees will continue to chase careers that are meaningful (61%) over ones with higher pay (16%) and flexibility (32%). Moreover, as demand for more advanced skills rises, training providers need to prioritise programmes that directly address the digital skills shortages facing Australia today without neglecting the importance of highly prioritised self-management skills. “We need to do more to broaden the scope of the training experience to encourage problem solving and adaptability,” says Simon Walker, the managing director of NCVER.
References
1 https://www.smh.com.au/business/workplace/on-the-way-up-the-rise-of-fast-skills-in-the-digital-workplace-20220210-p59vix.html
2 https://techcouncil.com.au/wp-content/uploads/2022/08/2022-Getting-to-1.2-million-report.pdf
3 https://www2.deloitte.com/content/dam/Deloitte/au/Documents/Economics/deloitte-au-economics-australias-digital-pulse-2021-160621.pdf
4 https://www.theguardian.com/australia-news/2022/oct/06/staggering-occupations-facing-skills-shortages-in-australia-almost-doubled-in-past-year
5 https://techcouncil.com.au/wp-content/uploads/2022/08/2022-Getting-to-1.2-million-report.pdf
6 https://techcouncil.com.au/wp-content/uploads/2022/08/2022-Getting-to-1.2-million-report.pdf
7 According to the Economic Impact survey, self-management skills comprise ability with time management, active learning, resilience, stress tolerance and flexibility.
8 https://www.afr.com/technology/cyber-skills-shortage-to-hit-30-000-in-four-years-20220912-p5bhde
9 https://techcouncil.com.au/wp-content/uploads/2022/08/Turning-Australia-into-a-regional-tech-hub_Report-2022.pdf
10 https://www.afr.com/technology/cyber-skills-shortage-to-hit-30-000-in-four-years-20220912-p5bhde
11 https://online.adelaide.edu.au/blog/cyber-security-australia
12 Ibid
13 https://www.theguardian.com/environment/2021/aug/09/australia-lagging-at-the-back-of-the-pack-of-oecd-countries-on-climate-action-analysis-finds
14 https://www.bain.com/insights/sustainability-from-surviving-to-thriving-in-australia/
15 https://www.bain.com/insights/sustainability-from-surviving-to-thriving-in-australia/
16 https://www.abc.net.au/news/2022-05-01/higher-education-key-driver-of-nsw-inflation-job-ready-changes/101028510
17 https://www.dewr.gov.au/skills-reform/jobtrainer-fund
Bridging the skills gap: Fuelling careers and the economy in Indonesia
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
Bridging the skills gap: Fuelling careers and the economy in Pakistan
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 Pakistan. This series complements a research paper that looks at the reskilling and upskilling imperative across APAC.
Key findings
Digital skills (57.3%) are a top priority for employees in Pakistan owing to a booming IT sector and the country’s rapidly growing freelancer market, which is the third fastest growing market globally#_ftn1" name="_ftnref1" title="">[1]. Recent acceleration of digitalisation has resulted in higher demand for basic digital skills (72.1%).#_ftn2" name="_ftnref2" title="">[2] #_ftn3" name="_ftnref3" title="">[3] Employees in Pakistan are motivated to acquire digital skills to improve career progression and promotion opportunities (29.3%), as well as to secure better pay and bargaining power (23%). Both the government and employers have important yet distinct roles to play in upskilling Pakistan: while employees expect the government to provide financial incentives, they point to employers as being responsible for providing access to diversified skilling programmes and information on the skills needed for different roles.Despite rising digital penetration in Pakistan in recent years, 46% of the population still lacks internet access.#_ftn4" name="_ftnref4" title="">[4] While 80% of adults live in areas served by mobile broadband, many still do not access the internet.#_ftn5" name="_ftnref5" title="">[5] Out of a total of 182 m mobile subscriptions, only 38 m belong to women.#_ftn6" name="_ftnref6" title="">[6] This could be a result of the low female literacy rate (48%),#_ftn7" name="_ftnref7" title="">[7] which is far below the overall literacy rate of around 60%.#_ftn8" name="_ftnref8" title="">[8] Moreover, the female labour force participation rate is among the lowest globally (25%) and women are mostly employed in the informal sector.#_ftn9" name="_ftnref9" title="">[9] On the other hand, the country struggles with youth unemployment. Almost a third (31%) of the educated youth with professional degrees was unemployed in 2022.#_ftn10" name="_ftnref10" title="">[10]
Amid this backdrop, the government is prioritising digitalisation and implementing initiatives to close the existing skills gap. For instance, Pakistan introduced its “Digital Pakistan” roadmap in 2018, which set out a number of policies and initiatives to help the economy to realise US$59.7 bn (PKR9.7 trn) in annual value by 2030.#_ftn11" name="_ftnref11" title="">[11] The policy targets the upskilling and reskilling of young graduates and the existing workforce to support the country’s growing digital economy and help spur freelance IT sector exports. On this front, it hopes to reach US$3 billion by 2024, up from US$2.12 billion in 2021.#_ftn12" name="_ftnref12" title="">[12]
Infrastructure obstacles—such as inequitable internet access across the country and a lack of sufficient digital skills training—have lowered the pace of digitalisation at workplaces, says Saad Gilani, a senior programme officer at the International Labour Organization (ILO).
Pakistan’s growing freelance economy boosts digital upskilling
More than half of employees (57.3%) in Economist Impact’s survey consider digital skills the most important to acquire. Within this broad category, most employees consider basic digital skills (72.1%) as the most important to have, a trend that reflects the country's struggles with basic digitalisation. Advanced digital skills are also considered must-haves by employees in Pakistan such as data analysis and visualisation (49.2%), digital marketing and e-commerce (47.7%), and IT support (40%).
Apart from the pandemic, which motivated many employees (34.7%) in the country to upskill, free online courses (33.3%) have enabled people to acquire new digital skills. One such initiative, the government's e-rozgaar platform, provides online training to budding freelancers.#_ftn13" name="_ftnref13" title="">[13] #_ftn14" name="_ftnref14" title="">[14] Additionally, Pakistan’s digital freelance market surged by 69% annually in 2020, which registered especially strong gains for women, who often struggle to achieve equity in traditional education and labour force participation.#_ftn15" name="_ftnref15" title="">[15]
For Mr Gilani, the success of the freelance market falls in line with his observations that young employees in Pakistan are highly self-motivated to upskill to remain relevant in the job market. “There are not many employer-led initiatives, so employees are learning by themselves,” he says.
Apart from digital skills, employees in Pakistan point to the importance of self-management (53.3%) and soft skills (46.7%). For example, 71.4% consider adaptability and flexibility a high priority, compared with the regional average of 65.5%. Similarly, 81.5% report communication skills as a “must-have”, higher than the regional average of 70.9%. Mr Gilani suggests these findings reflect the fact that soft skills are applicable across diverse job roles and industries. Soft skills attainment also appears to be linked to digital capabilities—around 81% of employees in Pakistan agree that digital skills have helped them gain confidence and improve in other areas like communication, analysis and critical thinking.
Although green skills (10.7%) are not considered a key priority for employees in Pakistan, Mr Gilani says this is an area for concern given the climate change risks impacting the country.#_ftn16" name="_ftnref16" title="">[16] This vulnerability heightened in 2022, when intense rainfall resulted in devastating flood waters, causing 1,100 deaths and affecting 33m individuals.#_ftn17" name="_ftnref17" title="">[17]
Barriers to upskilling Pakistan
Employees in our survey point to a lack of time (37.3%) and poor workplace culture of learning (32%) as barriers to acquiring new skills. These findings are relevant as most employees report workplace training (54.7%) as a key source of learning new digital skills, emphasising the need for more skilling opportunities in offices.
Another key issue, Mr Gilani says, is the mismatch between university course offerings and industry demand. “There is a high tendency for unemployment among the highly educated youth, stemming from problems in our education system—we don’t see universities inviting companies to tell students what they are looking for and employers aren’t sharing information with educational institutes”. In addition to focusing on university degrees, employers could also consider employees’ skillsets as an important signal for hiring new talent. Nearly 67% of surveyed employees believe that employers in Pakistan are hiring based on skills-based qualifications rather than full-time degrees.
Distinct expectations from government and employers
Faced with the high costs of reskilling and upskilling, more than half (52%) of employees consider the government responsible for providing financial incentives for upskilling. For instance, 29.3% cite government subsidies as a major motivator for acquiring specific skills such as green skills. Providing funding for green skills can bolster Pakistan’s capacity to adapt to a changing climate, says Mr Gilani. He suggests that greater investments in green skills and industries could improve the country’s access to renewable energy sources, reduce its climate resilience and create jobs.
Across all skill types, employers also have an instrumental role in upskilling and reskilling employees. More than four in ten survey respondents say employers have a role to play in providing access to diversified skilling programmes (42.7%) and information on the skills needed for different roles (41.3%). Over a third of employees also consider the government responsible for providing information on skills needed for different roles.
Leaving no one behind
Pakistan is undergoing a pivotal shift in its economy as digital transformation gains momentum. A large part of its success will hinge on leaving no one behind and giving an equal opportunity to everyone including women, young graduates and freelancers, which will boost the country's workforce significantly. Mr Gilani highlights the importance of government’s leadership and direction in providing an overall direction to this skills ecosystem, “If there is consistent leadership, digital skilling policy and an ecosystem, then things can be done.” And while digital skills will continue to be important as the country grows and digitalises in the next few years, analytical and soft skills will be equally important.
#_ftnref1" name="_ftn1" title="">[1]https://dailytimes.com.pk/818869/pakistan-becomes-the-4th-fastest-growin... #_ftnref2" name="_ftn2" title="">[2] Basic digital skills are defined in the survey as the ability to operate basic office software, i.e. Microsoft Office, and/or set up Internet and digital communication tools. #_ftnref3" name="_ftn3" title="">[3] Pakistan is the third-fastest growing freelancer market globally. [Source: http://onlinelabourobservatory.org/oli-supply/] #_ftnref4" name="_ftn4" title="">[4]https://www.pta.gov.pk/en/telecom-indicators #_ftnref5" name="_ftn5" title="">[5] https://www.gsma.com/asia-pacific/wp-content/uploads/2022/11/Making-Digi... #_ftnref6" name="_ftn6" title="">[6] https://onlinelibrary.wiley.com/doi/epdf/10.1111/rode.12994 #_ftnref7" name="_ftn7" title="">[7]#Female_Literacy_Rate_In_Pakistan_2022">https://ilm.com.pk/pakistan/pakistan-information/male-and-female-literac... #_ftnref8" name="_ftn8" title="">[8] https://tribune.com.pk/story/2322073/literacy-and-pakistan #_ftnref9" name="_ftn9" title="">[9] 2021 World Bank estimates, https://www.worldbank.org/en/results/2022/07/07/supporting-legal-reforms... #_ftnref10" name="_ftn10" title="">[10] https://tribune.com.pk/story/2342344/over-31-of-educated-youth-unemployed-reveals-pide #_ftnref11" name="_ftn11" title="">[11] https://accesspartnership.com/pakistans-pkr97-trillion-digital-potential/ #_ftnref12" name="_ftn12" title="">[12] https://www.thenews.com.pk/print/887910-govt-eyes-3bln-from-freelancing-it-exports-by-2024 #_ftnref13" name="_ftn13" title="">[13] https://erozgar.pitb.gov.pk/ #_ftnref14" name="_ftn14" title="">[14] https://pubs.payoneer.com/docs/2020-gig-economy-index.pdf #_ftnref15" name="_ftn15" title="">[15] https://pubs.payoneer.com/docs/2020-gig-economy-index.pdf #_ftnref16" name="_ftn16" title="">[16] https://edition.cnn.com/2022/08/30/asia/pakistan-climate-crisis-floods-justice-intl/index.html #_ftnref17" name="_ftn17" title="">[17] https://www.weforum.org/agenda/2022/09/pakistan-floods-what-role-did-climate-change-play/Bridging the skills gap: Fuelling careers and the economy in Vietnam
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.
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Bridging the skills gap: Fuelling careers and the economy in Australia
Economist Impact, supported by Google, conducted a survey of 1,375 employees across Asia-Pacific (APAC), including 100 employees from Australia, 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 Australia. This series complements a research paper that looks at the reskilling and upskilling imperative across APAC.
Key findings
The rapid digitalisation of businesses in Australia places digital skills (47%) as a key focus area for both employees and employers. Within the broader category of digital skills, advanced capabilities in data analysis and visualisation (38%), cybersecurity (34%) and IT support (34%) are considered must-haves. Australian employees are strongly motivated to upskill, with 40% saying that it highly impacts their ability to find more meaningful careers. For 61% of Australians, meaningful careers trump ones with higher pay (16%) and flexibility (32%). A majority of employees in our survey (67%) consider self-management skills such as time-management and active learning as essential, and more important than all other skills, for the workforce today.As Australian businesses digitalise rapidly, 87% of job roles are expected to require digital literacy.1 The need for digital skills is not only confined to the ICT sector, but also in adjacent industries such as finance, healthcare and government.2 However, demand is outpacing the current supply: every year, only 6,500 IT graduates are available to fill the annual demand for 60,000 workers.3 The National Skills Commission reported that the number of occupations struggling to fill positions had doubled between 2021 and 2022.4 Vacancy rates in tech are 60% higher than the national average and, without appropriate action, Australia will be short on 186,000 workers.5
Moreover, the Australian government and tech sector have jointly committed to create 1.2m tech jobs by 2030, which requires adding 653,000 people to the existing workforce.6
Increased importance of self-management and advanced digital skills
According to the Economist Impact survey, 67% of Australian employees prioritise bettering their self-management7 skills, higher than the regional average (53%). Skills such as time-management and active learning are becoming essential across different industries, highlights Patrick Kidd, chief executive officer, Digital Skills Organisation, Australia. He says “these skills are applicable across all industries and different job roles, and are becoming increasingly important.”
Figure 1: Australian employees prioritise self-management over other skills
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
Nonetheless, almost half (47%) of employees consider digital skills as the most important for the workforce today. Within digital skills, advanced capabilities in data analysis and visualisation (38%), cybersecurity (34%) and IT support (34%) are considered must-haves. Phil Loveder, the executive manager of inform and engage at the National Centre for Vocational Education Research (NCVER), Australia, highlights the rising skills gap in cybersecurity. On this, he explains, “data confidentiality, protection and privacy is a massive issue in Australia, and we can’t get enough cybersecurity people at the moment.” On its current trajectory, Australia will be short of 30,000 cyber professionals by 2026.8
As the Australian tech sector has ballooned to a US$429.6bn market,9 so too has the country’s vulnerability to cybercrime, which costs an estimated US$1bn annually.10 The government has recognised the issue and allocated US$1.35bn to boost growth in the cybersecurity industry.11 This, in turn, has resulted in an industry-wide surge in demand for cybersecurity capabilities, with IT teams looking to drive technological progress.12
Figure 2: Must-have, good-to-have and not needed digital skills for employees in Australia
Indicate the desirability of specific digital skills for the workforce in your sector today? (% of respondents)
Source: Economist Impact, 2023
Australia lags in green skills uptake, with only 12% of employees considering these essential to acquire. The country has grappled with perceptions of being a laggard on climate action when compared with other developed OECD economies.13 14 This is likely to change in the coming years, as Australia has committed to ambitious carbon emissions targets.15 Mr Loveder adds that a “substantial move towards green technologies” will create greater momentum, which will in turn drive up green reskilling.
Australians know that upskilling has real benefits, but barriers remain
Across all skillsets, Australian employees demonstrate a strong sense of personal initiative to upskill—for career progression, promotion opportunities and to improve their current job performance. Updating their skillset has positively impacted their salaries and bargaining power (71%) as well as their ability to find more meaningful careers (71%).
Figure 3: Upskilling has a high impact on Australians’ salaries, bargaining power and careers
Based on your experience, rate the impact that upskilling and reskilling have had on your role or career? (% of respondents)
Source: Economist Impact, 2023
Yet, barriers limit Australians’ access to skilling resources. When it comes to acquiring digital or analytical skills, Australian employees cite the high cost of courses as the biggest barrier, picked by 32% and 36% of respondents respectively. Soaring university fees16 could limit employees’ access to analytical skills, which respondents report are largely acquired in-person at the tertiary level or at coaching institutes (32%). Meanwhile, 34% of employees found it challenging to acquire soft skills due to difficulties in attending in-person courses, leading most to rely on self-learning (46%) to upskill in this area.
Figure 4: Employees face barriers to upskilling due to a lack of resources and time
What are the top barriers you face in learning digital, analytical and soft skills? (% of respondents)
Source: Economist Impact, 2023
Public-private partnerships bolster access to information and funding
To address these barriers, experts reinforce the key role of employers in creating the right environment for learning. Employers could enable employees to retrain through online programmes, which tend to be less resource-intensive than in-person courses and can be especially effective for mass upskilling, says Mr Kidd. Despite these advantages, only 30% of employees in our survey believe that employers value online certificates. However, this could change, as 61% of employees also say their employers are shifting the focus of hiring from valuing full-time degrees to skill-based qualifications, a shift to focusing on the skills themselves rather than methods of learning.
While employees in our survey place the primary responsibility of upskilling on employers, they also consider the government as playing an important role through providing financial incentives (48%) and access to diversified reskilling programmes (44%). In recent years, the government has allocated around US$1bn towards supporting free or low fee training for jobseekers and young people.17 “Other examples cited by Mr Loveder include financial supports by governments aimed at easing the costs to students undertaking higher-level training in courses that address workplace and industry needs”.
The government and employers can also work together to address the information gap on skills. Currently, 63% of employees look to their employer for information on the skills needed for different roles, compared with 37% who consider the government most responsible. Given the government’s greater access to data and cross-industry information, it could support the business community by better defining a skills taxonomy to support hiring processes and employees’ upskilling plans. Doing so would also help in developing diverse skilling programmes that target the skills gap.
As Australia looks ahead, employees will continue to chase careers that are meaningful (61%) over ones with higher pay (16%) and flexibility (32%). Moreover, as demand for more advanced skills rises, training providers need to prioritise programmes that directly address the digital skills shortages facing Australia today without neglecting the importance of highly prioritised self-management skills. “We need to do more to broaden the scope of the training experience to encourage problem solving and adaptability,” says Simon Walker, the managing director of NCVER.
References
1 https://www.smh.com.au/business/workplace/on-the-way-up-the-rise-of-fast-skills-in-the-digital-workplace-20220210-p59vix.html
2 https://techcouncil.com.au/wp-content/uploads/2022/08/2022-Getting-to-1.2-million-report.pdf
3 https://www2.deloitte.com/content/dam/Deloitte/au/Documents/Economics/deloitte-au-economics-australias-digital-pulse-2021-160621.pdf
4 https://www.theguardian.com/australia-news/2022/oct/06/staggering-occupations-facing-skills-shortages-in-australia-almost-doubled-in-past-year
5 https://techcouncil.com.au/wp-content/uploads/2022/08/2022-Getting-to-1.2-million-report.pdf
6 https://techcouncil.com.au/wp-content/uploads/2022/08/2022-Getting-to-1.2-million-report.pdf
7 According to the Economic Impact survey, self-management skills comprise ability with time management, active learning, resilience, stress tolerance and flexibility.
8 https://www.afr.com/technology/cyber-skills-shortage-to-hit-30-000-in-four-years-20220912-p5bhde
9 https://techcouncil.com.au/wp-content/uploads/2022/08/Turning-Australia-into-a-regional-tech-hub_Report-2022.pdf
10 https://www.afr.com/technology/cyber-skills-shortage-to-hit-30-000-in-four-years-20220912-p5bhde
11 https://online.adelaide.edu.au/blog/cyber-security-australia
12 Ibid
13 https://www.theguardian.com/environment/2021/aug/09/australia-lagging-at-the-back-of-the-pack-of-oecd-countries-on-climate-action-analysis-finds
14 https://www.bain.com/insights/sustainability-from-surviving-to-thriving-in-australia/
15 https://www.bain.com/insights/sustainability-from-surviving-to-thriving-in-australia/
16 https://www.abc.net.au/news/2022-05-01/higher-education-key-driver-of-nsw-inflation-job-ready-changes/101028510
17 https://www.dewr.gov.au/skills-reform/jobtrainer-fund
Bridging the skills gap: Fuelling careers and the economy in Indonesia
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
Bridging the skills gap: Fuelling careers and the economy in Pakistan
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 Pakistan. This series complements a research paper that looks at the reskilling and upskilling imperative across APAC.
Key findings
Digital skills (57.3%) are a top priority for employees in Pakistan owing to a booming IT sector and the country’s rapidly growing freelancer market, which is the third fastest growing market globally#_ftn1" name="_ftnref1" title="">[1]. Recent acceleration of digitalisation has resulted in higher demand for basic digital skills (72.1%).#_ftn2" name="_ftnref2" title="">[2] #_ftn3" name="_ftnref3" title="">[3] Employees in Pakistan are motivated to acquire digital skills to improve career progression and promotion opportunities (29.3%), as well as to secure better pay and bargaining power (23%). Both the government and employers have important yet distinct roles to play in upskilling Pakistan: while employees expect the government to provide financial incentives, they point to employers as being responsible for providing access to diversified skilling programmes and information on the skills needed for different roles.Despite rising digital penetration in Pakistan in recent years, 46% of the population still lacks internet access.#_ftn4" name="_ftnref4" title="">[4] While 80% of adults live in areas served by mobile broadband, many still do not access the internet.#_ftn5" name="_ftnref5" title="">[5] Out of a total of 182 m mobile subscriptions, only 38 m belong to women.#_ftn6" name="_ftnref6" title="">[6] This could be a result of the low female literacy rate (48%),#_ftn7" name="_ftnref7" title="">[7] which is far below the overall literacy rate of around 60%.#_ftn8" name="_ftnref8" title="">[8] Moreover, the female labour force participation rate is among the lowest globally (25%) and women are mostly employed in the informal sector.#_ftn9" name="_ftnref9" title="">[9] On the other hand, the country struggles with youth unemployment. Almost a third (31%) of the educated youth with professional degrees was unemployed in 2022.#_ftn10" name="_ftnref10" title="">[10]
Amid this backdrop, the government is prioritising digitalisation and implementing initiatives to close the existing skills gap. For instance, Pakistan introduced its “Digital Pakistan” roadmap in 2018, which set out a number of policies and initiatives to help the economy to realise US$59.7 bn (PKR9.7 trn) in annual value by 2030.#_ftn11" name="_ftnref11" title="">[11] The policy targets the upskilling and reskilling of young graduates and the existing workforce to support the country’s growing digital economy and help spur freelance IT sector exports. On this front, it hopes to reach US$3 billion by 2024, up from US$2.12 billion in 2021.#_ftn12" name="_ftnref12" title="">[12]
Infrastructure obstacles—such as inequitable internet access across the country and a lack of sufficient digital skills training—have lowered the pace of digitalisation at workplaces, says Saad Gilani, a senior programme officer at the International Labour Organization (ILO).
Pakistan’s growing freelance economy boosts digital upskilling
More than half of employees (57.3%) in Economist Impact’s survey consider digital skills the most important to acquire. Within this broad category, most employees consider basic digital skills (72.1%) as the most important to have, a trend that reflects the country's struggles with basic digitalisation. Advanced digital skills are also considered must-haves by employees in Pakistan such as data analysis and visualisation (49.2%), digital marketing and e-commerce (47.7%), and IT support (40%).
Apart from the pandemic, which motivated many employees (34.7%) in the country to upskill, free online courses (33.3%) have enabled people to acquire new digital skills. One such initiative, the government's e-rozgaar platform, provides online training to budding freelancers.#_ftn13" name="_ftnref13" title="">[13] #_ftn14" name="_ftnref14" title="">[14] Additionally, Pakistan’s digital freelance market surged by 69% annually in 2020, which registered especially strong gains for women, who often struggle to achieve equity in traditional education and labour force participation.#_ftn15" name="_ftnref15" title="">[15]
For Mr Gilani, the success of the freelance market falls in line with his observations that young employees in Pakistan are highly self-motivated to upskill to remain relevant in the job market. “There are not many employer-led initiatives, so employees are learning by themselves,” he says.
Apart from digital skills, employees in Pakistan point to the importance of self-management (53.3%) and soft skills (46.7%). For example, 71.4% consider adaptability and flexibility a high priority, compared with the regional average of 65.5%. Similarly, 81.5% report communication skills as a “must-have”, higher than the regional average of 70.9%. Mr Gilani suggests these findings reflect the fact that soft skills are applicable across diverse job roles and industries. Soft skills attainment also appears to be linked to digital capabilities—around 81% of employees in Pakistan agree that digital skills have helped them gain confidence and improve in other areas like communication, analysis and critical thinking.
Although green skills (10.7%) are not considered a key priority for employees in Pakistan, Mr Gilani says this is an area for concern given the climate change risks impacting the country.#_ftn16" name="_ftnref16" title="">[16] This vulnerability heightened in 2022, when intense rainfall resulted in devastating flood waters, causing 1,100 deaths and affecting 33m individuals.#_ftn17" name="_ftnref17" title="">[17]
Barriers to upskilling Pakistan
Employees in our survey point to a lack of time (37.3%) and poor workplace culture of learning (32%) as barriers to acquiring new skills. These findings are relevant as most employees report workplace training (54.7%) as a key source of learning new digital skills, emphasising the need for more skilling opportunities in offices.
Another key issue, Mr Gilani says, is the mismatch between university course offerings and industry demand. “There is a high tendency for unemployment among the highly educated youth, stemming from problems in our education system—we don’t see universities inviting companies to tell students what they are looking for and employers aren’t sharing information with educational institutes”. In addition to focusing on university degrees, employers could also consider employees’ skillsets as an important signal for hiring new talent. Nearly 67% of surveyed employees believe that employers in Pakistan are hiring based on skills-based qualifications rather than full-time degrees.
Distinct expectations from government and employers
Faced with the high costs of reskilling and upskilling, more than half (52%) of employees consider the government responsible for providing financial incentives for upskilling. For instance, 29.3% cite government subsidies as a major motivator for acquiring specific skills such as green skills. Providing funding for green skills can bolster Pakistan’s capacity to adapt to a changing climate, says Mr Gilani. He suggests that greater investments in green skills and industries could improve the country’s access to renewable energy sources, reduce its climate resilience and create jobs.
Across all skill types, employers also have an instrumental role in upskilling and reskilling employees. More than four in ten survey respondents say employers have a role to play in providing access to diversified skilling programmes (42.7%) and information on the skills needed for different roles (41.3%). Over a third of employees also consider the government responsible for providing information on skills needed for different roles.
Leaving no one behind
Pakistan is undergoing a pivotal shift in its economy as digital transformation gains momentum. A large part of its success will hinge on leaving no one behind and giving an equal opportunity to everyone including women, young graduates and freelancers, which will boost the country's workforce significantly. Mr Gilani highlights the importance of government’s leadership and direction in providing an overall direction to this skills ecosystem, “If there is consistent leadership, digital skilling policy and an ecosystem, then things can be done.” And while digital skills will continue to be important as the country grows and digitalises in the next few years, analytical and soft skills will be equally important.
#_ftnref1" name="_ftn1" title="">[1]https://dailytimes.com.pk/818869/pakistan-becomes-the-4th-fastest-growin... #_ftnref2" name="_ftn2" title="">[2] Basic digital skills are defined in the survey as the ability to operate basic office software, i.e. Microsoft Office, and/or set up Internet and digital communication tools. #_ftnref3" name="_ftn3" title="">[3] Pakistan is the third-fastest growing freelancer market globally. [Source: http://onlinelabourobservatory.org/oli-supply/] #_ftnref4" name="_ftn4" title="">[4]https://www.pta.gov.pk/en/telecom-indicators #_ftnref5" name="_ftn5" title="">[5] https://www.gsma.com/asia-pacific/wp-content/uploads/2022/11/Making-Digi... #_ftnref6" name="_ftn6" title="">[6] https://onlinelibrary.wiley.com/doi/epdf/10.1111/rode.12994 #_ftnref7" name="_ftn7" title="">[7]#Female_Literacy_Rate_In_Pakistan_2022">https://ilm.com.pk/pakistan/pakistan-information/male-and-female-literac... #_ftnref8" name="_ftn8" title="">[8] https://tribune.com.pk/story/2322073/literacy-and-pakistan #_ftnref9" name="_ftn9" title="">[9] 2021 World Bank estimates, https://www.worldbank.org/en/results/2022/07/07/supporting-legal-reforms... #_ftnref10" name="_ftn10" title="">[10] https://tribune.com.pk/story/2342344/over-31-of-educated-youth-unemployed-reveals-pide #_ftnref11" name="_ftn11" title="">[11] https://accesspartnership.com/pakistans-pkr97-trillion-digital-potential/ #_ftnref12" name="_ftn12" title="">[12] https://www.thenews.com.pk/print/887910-govt-eyes-3bln-from-freelancing-it-exports-by-2024 #_ftnref13" name="_ftn13" title="">[13] https://erozgar.pitb.gov.pk/ #_ftnref14" name="_ftn14" title="">[14] https://pubs.payoneer.com/docs/2020-gig-economy-index.pdf #_ftnref15" name="_ftn15" title="">[15] https://pubs.payoneer.com/docs/2020-gig-economy-index.pdf #_ftnref16" name="_ftn16" title="">[16] https://edition.cnn.com/2022/08/30/asia/pakistan-climate-crisis-floods-justice-intl/index.html #_ftnref17" name="_ftn17" title="">[17] https://www.weforum.org/agenda/2022/09/pakistan-floods-what-role-did-climate-change-play/