Indonesia’s education and training environment

In December 2018, three Yolngu artists from north-east Arnhem Land arrived in Makassar, South Sulawesi, to retrace the sea-faring trade steps of their ancestors: a trade relationship that began from at least 1700 until 1907 between Aboriginal people of northern Australia and Makassar. To this day, the relationship is illustrated through visual art, stories and place. More than a century later, the relationship is reinvigorated, but now takes a different form – the Indonesia-Australia comprehensive economic partnership (IA-CEPA).

Bilateral trade discussions began in 2010. After several years and at least eleven rounds of negotiations, the agreement was signed in March 2019, ratified by Australian in November 2019 and Indonesia in February 2020.

Under the partnership agreement, 99 per cent of exports can now enter Indonesia tariff-free. Universities can open campuses there. And Australians will be allowed to own majority stakes in telecommunications, transport, health and energy business.

Australian education and training providers will have a different view on what their next steps of engagement with Indonesia may look like. Yet all agree that Indonesia is too important to ignore.

The scale of things to come

The country is home to more than 260 million people. It is the fourth most-populous country and the biggest economy in Southeast Asia. The majority of its people are under 30 years of age. What is staggering is that with more than 50 million school students, Indonesia’s education system, according to the World Bank, is the third-largest in Asia and the fourth largest in the world (behind China, India and the United States). About 67 million (26 per cent) are between the ages of 15 and 24, making it the third-largest such cohort in the world after India and China. (See Figure 1)

Indonesia’s young population is also urbanising. Its cities are growing faster than those of any other Asian country, with the urban population increasing at 4.1 per cent per annum. The World Bank forecasts that 68 per cent of Indonesia’s population will be living in cities by 2025, with Deloitte predicting that 41million of those city dwellers will be aged 15-29.

In the higher education sector, enrolments at Indonesian universities increased from 5.2 million in 2010 to 8 million in 2018. Enrolment rates are expected to double by 2024, the third fastest growth rate in the world after India and China.

In vocational education and training, there has been a notable increase in the number of students attending the country’s 13,710 vocational high schools (SMK). In the 2017/18 school year, 4.9 million Indonesians were studying at an SMK, an increase of 17 per cent in five years. In fact, for the first time, more Indonesian high school students were at a vocational rather than general high school (SMU).

Demand for education abroad

With a young and growing urban consumer class, Indonesian students are increasingly seeking offshore education opportunities. The number of Indonesian higher education students studying overseas is growing steadily, reaching 46,000 in 2016 – up 30 per cent since 2011. (See Figure 2)

Indonesia is the third largest outbound higher education market in Southeast Asia, after Vietnam and Malaysia. (See Figure 3) Though Indonesia’s outbound numbers continue to grow, they are comparatively small for a country of Indonesia’s size and per capita income.

Australia remains Indonesia’s top destination for higher education. It attracts more than a quarter of Indonesians studying abroad. After Australia, the leading destinations are Malaysia and the United States. Malaysia has enlarged its market share over the last three years, overtaking the US. Its effective marketing, familiar cultural and religious environment, relative affordability and the presence of foreign-based campuses – such as Monash University Malaysia, Curtin University of Technology Sarawak Campus, University of Nottingham Malaysia campus and Swinburne University of Technology Sarawak campus – have made it an attractive destination.

When Vocational Education and Training (VET) and English Language training (ELICOS) are considered, enrolments are higher in Australia. There are more than 20,000 Indonesia students enrolled onshore – an annual growth rate of six to seven per cent. Enrolments are even higher if you factor in Australia’s offshore presence. In 2015, 2300 Indonesian students studied at Australian offshore campuses in Singapore and Malaysia.

Management and commerce courses are by far the most popular field of study for Indonesian students in both higher education and VET in Australia. It is followed by society and culture and food, hospitality and personal services.