Digital Skills and Competencies for a Changing Labor Market in Indonesia

Introduction

Automation technology offers substantial opportunities for governments and businesses to boost production, efficiency, and growth. Automation can boost productivity and GDP growth in Indonesia for workers while also expanding market prospects for businesses (Das et al, 2019). Through the CIPG (Center for Innovation Policy and Governance), the Indonesian government issued legislation in 2018 for the growth of big data, artificial intelligence, blockchains, and financial technology (fintech), which became the beginning point for the rapid adoption of technology (Ramadhan and Putri, 2018). Furthermore, according to Das et al. (2019), Indonesia will transform and face automation and the future of work in 2030. In response to the situation, Indonesia developed a program called Vision Indonesia Gold 2045 in 2020. This vision is supported by four major pillars, which are as follows: human development and science and technology, economic equality, and strengthening resilience and national governance (Bappenas, 2020). Human capital is an intangible asset that must be cultivated extensively. Therefore, companies must invest in the development of their human capital, which has a significant impact on the performance of the company (Ayuningtias and Anggadwita, 2015). The Indonesian government is now focusing on developing excellent human resources and adapting to rapid technological changes. Competence in human resource management is one of the best ways for succeeding in competing worldwide (Ayuningtias, Anggadwita and Prasetia, 2018). The role of digital transformation in increasing productivity, effective service delivery, and job creation is highlighted in Indonesia's national strategic development plan. Indonesia's Ministry of Communication and Informatics (MCI) is developing a “Digital Nation Roadmap” to boost the country's digital readiness and competitiveness. The MCI commissioned this study to assist in the development of this “Digital Roadmap” and to give an assessment of the digital skills landscape in Indonesia, which will then lead to the formulation of actual actions and policies (Diningrat et al., 2022)

Indonesia has made significant progress in developing digital competencies and skills in recent years. The government has recognized the importance of digital technology in driving economic growth and has implemented various initiatives to promote digital literacy and skills development (Ameliah, Negara and Rahmawati, 2022). Following are some of the important developments in this field:

• 1.

  Growth of Internet use: Internet use in Indonesia is expanding from year to year, with around 196.7 million active Internet users in Indonesia in 2020 (APJII, 2020). This has enabled the development of the digital industry, including e-commerce, fintech, and games.

• 2.

  Increased investment in the technology sector: Indonesia has become an attractive place for technology investment, especially in terms of startup funding. In 2020, technology startups in Indonesia managed to raise more than $2.8 billion in investment funds, an increase of 15% from the previous year (Bappenas, 2020).

• 3.

  Increasing number of the digital workforce: More and more Indonesian companies need employees with digital skills (Ramadhan and Putri, 2018). This has increased the demand for a workforce with programming, data analysis, and digital marketing skills.

• 4.

  Increasing digital awareness: There is increasing awareness of the importance of digital competencies and skills in Indonesia (Diningrat et al., 2022). The Indonesian government has introduced digital training programs to help increase digital skills among Indonesians.

• 5.

  Development of digital education: Many universities in Indonesia have introduced digital and technology programs and professional training to help produce a digitally skilled workforce (Ministry of Education, Culture, Research, and Technology, 2021)