Supply of Non-Formal Training in Indonesia

Working Paper 23

February 2015

Authors: Gorm Skjaerlund and Theo van der Loop

This study examines the current situation with regard to non-formal training in Indonesia. Specifically, the paper seeks to clarify the role of the most important stakeholders in skills training and the extent to which the national skills training system – consisting of public and private training providers as well as the apprenticeship system – is able to meet labour market demands. The immediate objective of this study is to inform the discussion on reforming the skills training system in Indonesia by establishing a Skills Development Fund (SDF).

Little documentation is available on the non-formal public training system and only a few brief reports are available on private training provision. Consequently, while there are approximately 20,000 registered private training providers, the role they play in national skills development is unknown as is their potential role if they were adequately supported by government policies and funding. Therefore this study focuses on the role of private training providers and offers a number of recommendations to improve the efficiency of the present training system.

Information for the study was obtained through desk research and face-to-face discussions with stakeholder representatives in three provinces. While a discussion guide was developed for each stakeholder group, the survey process was not exhaustive or definitive. Rather, the report sought to offer a realistic view of the skills training system as expressed by a selection of stakeholders in three provinces.

The study revealed that while a workable skills training system is in place, its implementation is compromised by inadequate communication, coordination and cooperation among stakeholders at national as well as regional levels. Two major concerns that emerged are, firstly, that two almost identical non-formal skills training systems are operating in parallel with no meaningful communication or cooperation between them. Secondly, that employers, one of the primary beneficiaries of the skills training system, do not play a more active role in ensuring that the national skills training system is able to supply the skills that the labour market requires.

As a result, the skills training system is fragmented. While public training providers are supply driven, private training providers are typically driven by student demand. These providers are often locally based and lack the financial and human resources to offer a high quality service and become significant participants in the national skills training system. Another serious result of the fragmentation is that no provincial or district administration has details of its combined skills training resources. There are no records of combined capacity, quality and suitability for local labour market requirements or any other essential information, making the task of designing policies to improve the system extremely challenging.

The TNP2K Working Paper Series disseminates the findings of work in progress to encourage discussion and exchange of ideas on poverty, social protection, and development issues.

Support for this publication has been provided by the Australian Government through the Poverty Reduction Support Facility (PRSF).

The findings, interpretations, and conclusions herein are those of the authors and do not necessarily reflect the views of the Government of Indonesia or the Government of Australia.

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