Emerging Employment Trends in Indonesia: Training and Upskilling Opportunities
Indonesia’s job market is expected to transform significantly due to the rapid adoption of digital technologies and ongoing economic recovery efforts. The increasing reliance on automation and digital platforms is driving a higher demand for digital skills. Efforts to rebound from the pandemic have stimulated job creation, particularly in e-commerce and technology. Moreover, steady foreign investments are attracting international businesses, creating diverse job opportunities.
Emerging industries and job roles
Several industries in Indonesia are witnessing rapid growth, creating new employment opportunities, and reshaping the job market.
Technology
The technology sector, including IT, software development, and e-commerce, is expanding rapidly, driven by increasing internet penetration and a growing digital economy The country’s digital economy is expected to reach a gross merchandise value (GMV) of US$109 billion in 2025, an increase of 15 percent from 2023. This is expected to increase further to between US$210 and US$360 billion by 2030, making it the largest digital economy in Southeast Asia.
E-commerce platforms, fintech companies, and digital startups are flourishing, contributing to job creation in areas like customer service, logistics, and digital marketing. E-commerce has become a significant driver of job creation in Indonesia. Major platforms like Tokopedia, Bukalapak, and Shopee have expanded their operations, requiring a larger workforce to manage logistics, customer service, and digital marketing efforts.
The e-commerce market in Indonesia was valued at US$32 billion in 2023 and is expected to grow to US$83 billion by 2025 through peer-to-peer (P2P) lending and e-payment platforms. Despite having more than 300 fintech companies operating in Indonesia, foreign investors will find the industry has yet to fulfill its potential. This is because most micro, small, and medium-sized enterprises (MSMEs) are operating in the informal sectors and thus have little access to financing from banks.
Several key roles are emerging as critical within Indonesia’s technology sector due to its rapid growth:
Software developers: There is a rising need for professionals skilled in programming languages like Python, Java, and C++.
Cybersecurity experts: With the growing dependence on digital platforms, Indonesia is projected to require around 100,000 cybersecurity experts by 2025.
Data analysts: As the volume of data collected by businesses continues to grow, there is a heightened demand for data analysts who can interpret and utilize this information for strategic decisions.
Digital marketers: In the competitive online marketplace, digital marketing expertise will be crucial for promoting products and services, particularly for those who have English communication skills.
Healthcare
A significant milestone in Indonesia’s healthcare landscape was the implementation of the Universal Health Coverage program known as Jaminan Kesehatan Nasional (JKN). Launched in 2014, JKN provides comprehensive health insurance to 267 million Indonesians or 95.77 percent of the total population.
Indonesia is experiencing a significant rise in lifestyle diseases, which presents new challenges for its healthcare system. Non-communicable diseases (NCDs) such as diabetes, cardiovascular diseases, cancer, and chronic respiratory diseases are becoming increasingly prevalent. This shift is largely due to changes in dietary habits, reduced physical activity, increased tobacco use, and rising obesity rates.
The rise in lifestyle diseases underscores the urgent need to increase and improve Indonesia’s healthcare workforce. The country faces a shortage of healthcare professionals, including doctors, nurses, and specialists. This shortage is more pronounced in rural and remote areas, where access to healthcare services is limited.
As of 2023, Indonesia has approximately 1.9 doctors per 1,000 people, according to data from the World Health Organization (WHO). This is well below the recommended minimum of 4.5 doctors per 1,000 people. The disparity is more pronounced in rural and remote areas, where access to healthcare services is limited. For example, in some rural regions, there may be only one doctor for every 10,000 people. There is also a shortage of nurses and allied health professionals. According to data from the Indonesian Ministry of Health, there are about 1.2 nurses per 1,000 people, which is below the WHO recommendation of 2.5 nurses per 1,000 people.
Renewable energy expertise
Indonesia has set ambitious targets for increasing the share of renewable energy in its energy mix. The government aims to achieve a 23 percent renewable energy share by 2025, up from around 11 percent in 2023. This transition includes harnessing resources like solar, wind, hydro, and geothermal energy. However, one of the critical challenges Indonesia faces is a lack of expertise in the renewable energy sector. The country needs more skilled professionals, such as engineers, project managers, technicians, and policy experts, who are well-versed in the design, installation, maintenance, and management of renewable energy systems.
Additionally, there is a need for research and development experts to innovate and adapt renewable technologies to Indonesia’s diverse geographical conditions, from densely populated urban areas to remote islands. Indonesia is one of the world’s largest producers of geothermal energy. With an estimated geothermal potential of over 29 gigawatts (GW), the country has a significant opportunity to expand this sector. Solar energy presents a promising opportunity for Indonesia due to its high solar irradiance. The country has set a target to install 6.5 GW of solar capacity by 2025.
Further, Indonesia has considerable hydropower potential, with estimates suggesting over 75 GW of potential capacity. As of 2023, the country has about 5.6 GW of installed hydropower capacity. 2023, Indonesia’s solar capacity stands at about 300 megawatts (MW). The development of Indonesia’s renewable energy sector is also impacted by a shortage of skilled professionals. Addressing this shortage is crucial for the successful expansion of renewable energy projects.
Can foreign workers fill the skills gap?
Indonesia issued Government Regulation 228 of 2019 which lists job titles across 18 sectors that can be filled by expatriates with the intention of attracting highly skilled foreign employees into Indonesia. However, foreign workers are often restricted to managerial, technical, or specialized roles that require specific expertise unavailable in the local labor pool.
The stringent rules aim to prevent foreign workers from taking jobs that could be performed by Indonesians, making it hard for foreign labor to fill more general or lower-skilled gaps in the local workforce. As such, while it might seem straightforward to suggest that foreign workers could fill the gaps left by local workers in Indonesia, the reality is far more complex.
Moreover, one of the critical requirements for businesses hiring foreign workers in Indonesia is the obligation to provide training for local employees. The government mandates that companies employing foreign workers must implement skills transfer programs to ensure local workers are adequately trained to eventually take over roles filled by foreigners.
About Us
ASEAN Briefing is one of five regional publications under the Asia Briefing brand. It is supported by Dezan Shira & Associates, a pan-Asia, multi-disciplinary professional services firm that assists foreign investors throughout Asia, including through offices in Jakarta, Indonesia; Singapore; Hanoi, Ho Chi Minh City, and Da Nang in Vietnam; besides our practices in China, Hong Kong SAR, India, Italy, Germany, and USA. We also have partner firms in Malaysia, Bangladesh, the Philippines, Thailand, and Australia.
Please contact us at asean@dezshira.com or visit our website at www.dezshira.com and for a complimentary subscription to ASEAN Briefing’s content products, please click here.