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Indonesia TVET Blog
  • Blog
  • November 7, 2022

Why Australian TVET providers need to focus on Indonesia

By: Clarice Campbell, Katalis Skills Lead Adviser

With Southeast Asia’s largest workforce, Indonesia must now address new opportunities and challenges including economic growth, digitisation and critical skills shortages. The time is right for Australian providers of Technical Vocational Education and Training (TVET) to reassess their approach to Indonesia.

Education is one of Australia’s most important exports to Indonesia and the share of overseas students who choose TVET has increased over the past decade.  More than half of the new courses started by Indonesian students in Australia are now in the TVET sector rather than through other institutions such as universities.

Even prior to the pandemic, Australian TVET faced major challenges, including competition from the higher education sector and online education providers as well as workforce challenges. The COVID-19 pandemic has put further pressure on the sector with a reduction in overseas student enrolments.  Between 2021 and 2022 Australian TVET saw an 8% drop in overseas student enrolments and it remains to be seen whether there will return to pre-COVID-19 rates of overseas student enrolments.

However, the pandemic also challenged Australian TVET providers to adapt their course delivery and accelerate the transition to online learning.  Many providers now offer either fully remote or blended learning formats and an increasing proportion of students are learning online.  A recent survey of Australian TVET institutions by Katalis found 73% of those surveyed are now delivering courses online, creating the possibility of more cost effective models. Twenty-seven percent of surveyed Australian TVET providers currently deliver some form of training in Indonesia with a further 53% of respondents interested in entering the Indonesian market.

Overall, 60% of respondents had experience delivering courses to Indonesian students in Australia and 87% of respondents identified having courses suited for delivery in Indonesia including those currently ready and those that could be developed to meet the needs of the Indonesian cohort within 1-24 months. TVET providers cited barriers to entering the Indonesian market, including a lower price point for student fees and the need for a critical mass of students to justify market entry. Online learning models may help address these challenges.  

“The Victorian Government has already sponsored a suite of micro-credentials developed for offshore delivery, in skill areas of need for Indonesia. This means that a consortium of Victorian TAFEs could move quickly to support models,” said Timothy Gilbert, Vice President International Development, Melbourne Polytechnic.

Australian TVET providers face the twin challenges of adapting to meet the needs of an ever-changing domestic market in Australia, while meeting the demand for skills training in Indonesia and other international markets.

Indonesia’s economy is now recovering from the impacts of the pandemic and according to the Asia Development Bank, Indonesia’s economy is expected to continue to grow by 5.2% in 2023.

With half of Indonesia’s population of 276 million under the age of 30, access to education and training is a top national priority. Rapid digitisation in the sale of both goods and services within Indonesia’s domestic economy is leading to surging demand for relevant digital skills. However, despite improving high school completion rates and a growing middle class, in a country with a per-capita GDP of about AUD 7,000, overseas study remains out of financial reach for many students.

The Indonesia-Australia comprehensive economic partnership agreement (IA-CEPA), which came into force on July 5, 2020 opens up new opportunities for TVET providers to invest directly in Indonesia. Now for the first time, the Indonesian Government will allow Australian majority ownership in Indonesian TVET institutions. In a further development, the recently introduced Omnibus Law allows Australian TVET institutions 100% ownership in the provision of non-accredited training. To support the development of mutually beneficial opportunities the Indonesian and Australian governments established Katalis. 

This year Katalis is producing a Market Insights series which draws on recent research, including real-time job advertisement data from Indonesia developed by Prospera to provide insights into market demand for key skills. The first brief examined digital skills with upcoming briefs focused on business skills and tourism. Finally, Katalis is soon to launch the Indonesia-Australia Skills Exchange platform which will work to broker opportunities between the Indonesian business community and Australian TVET providers. The platform is expected to be operational by the start of 2023.

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