Designed to address unequal information flow between Australian education providers and Indonesian industry, the Indonesia-Australia Skills Exchange is an online platform that allows business matching between the two to facilitate greater skills development in the Indonesian workforce.
The Indonesian Government, as well as industry, have expressed frustration at the challenges around skills shortages and labour productivity. Consequently, high-quality skills development activities for employees are prioritised by Indonesian industry to address skill gaps. Australia is well-positioned to provide support to Indonesia to address skills gaps due to Australia’s highly regarded vocational education system and deep connections with industry.
Through IA-CEPA, Australian education providers are permitted to deliver course content in Indonesia and/or establish a presence in-country. They can deliver both accredited and non-accredited course content in a range of sectors, such as; tourism, health, IT, business, and agriculture. The Skills Exchange will leverage the IA-CEPA agreement to pursue commercial benefits for both countries.
How Katalis is helping
Indonesia’s workforce is heavily focused on labour-intensive industry. More than 60% of the population do not go on to study beyond their senior high school or senior vocational high school certificate, and a significant percentage of the workforce do not have a formal qualification. At the same time, Indonesia’s government-driven vocational education system struggles to provide the skills needed to align the workforce with the skills needs of industry.
Over the years, Australian education providers have partnered with or delivered projects for Indonesian stakeholders, both for delivery on and offshore. However, these interactions have tended to be small scale and limited to one-off transactions. There are very few examples of consistent, long-term, sustainable Indonesia-Australia training at scale.
By addressing information asymmetry and reducing search costs that have hampered high value collaboration, the Indonesia-Australia Skills Exchange paves the way for bigger commercial outcomes through more strategic international engagement for Australian education providers.
The Skills Exchange aims to facilitate large-scale commercial partnerships between Indonesian businesses and Australian education providers, with plans for the platform to reach financial sustainability in the first two years of its operation. Through the Skills Exchange platform, Indonesian businesses will be able to articulate their skills needs and Australian providers will be able to respond and showcase their capabilities. A closer relationship between Indonesian industry with the Australian education sector will be forged through the Skills Exchange, resulting in thousands of Indonesian workers upskilled and reskilled through collaborative training activities.
Benefits for Indonesia and Australia
Human capital development is one of the five priorities of the Government of Indonesia in achieving its economic growth ambitions, eradicating poverty, and improving welfare. The COVID-19 pandemic has disrupted the economy and the labour market, and it has made skills development more important to increase preparedness in meeting industry needs and accelerate economic recovery.
At the same time, the Australian government has a vision to increase international engagement with the Australian education sector, as evidenced in its Australian International Education 2025 Roadmap. The international education sector, heavily impacted by the COVID-19 pandemic, will benefit from the Skills Exchange as it will be an entry point to increase engagement with the Indonesian market and strengthen international skills activities. This is a strategic opportunity to strengthen Indonesia-Australia bilateral partnerships in capacity building, while reaping benefits from IA-CEPA.
Gender Equality, Disability, and Social Inclusion (GEDSI)
The Katalis Skills Exchange will initially focus on priority sectors where women, people with disabilities and people from minority groups are well represented (e.g., health, tourism, and digital services) and include GEDSI goals and targets. The training conducted through the partnerships will also encourage participations from GEDSI groups.