A few months ago, the Global Talent Competitiveness Index (GTCI) was launched in Davos, Switzerland on the eve of the World Economic Forum annual meetings. This annual report, co-produced by INSEAD, Adecco and HCLI, is themed “Talent and Technology.”

This year’s rankings have confirmed the status of Switzerland as the most talent competitive nation in the world. Singapore remains a solid number two, leading the pack of Asia-Pacific countries. Indonesia is 90th a ranking that does not reflect the country’s potential.

The report focuses very much on the current and future impacts of technology on talent management, as well as on the future of work generally.

Under the general heading of “looking beyond automation,” it underlines that new technological advances (e.g. in big data, artificial intelligence and the pervading use of algorithms) will not kill work, but will require rapid (and massive) adjustments from individuals, organizations and countries to reap their full potential while minimizing their disruptive effects.

In this respect, the experience and specificities of the Asia-Pacific region are particularly enlightening, including from the point of view of large economies such as that of Indonesia.

By and large, the Asia-Pacific region faces a situation characterized by inequalities on one hand, and strong demographic challenges on the other hand — in particular in education.

To be competitive in a digitally-driven global economy, the Indonesian economy will need to grow and/or acquire the skills that will allow it to benefit from technological changes while providing enough jobs for its growing population. Comparing its talent performance to that of its Asian neighbors leads to several unescapable conclusions.

First, Indonesia’s level of development (as measured by income per capita) should allow higher levels of talent competitiveness. The GTCI worldwide rank of Indonesia (90th) is closer to India’s (92nd) than to China’s (54th), even though the reverse is true in terms of GDP per capita (US$14,239 for China, $11,035 for Indonesia and $6,089 for India). This suggests that, out of those three countries, Indonesia has the largest room for improvement on the talent side. Comparatively, the Philippines (with a significant lower income per capita) do significantly better than Indonesia on the talent competitiveness scene.

Second, Indonesia is relatively well equipped in vocational and technical skills, but finds it difficult to attract talents from abroad.

Third, education remains a challenge in Indonesia, both in formal education and in life-long learning opportunities: compared to other countries such as Singapore, Malaysia of the Philippines. Indonesian students are not fully prepared for the jobs of the future and Indonesian workers have limited opportunities to acquire the new skills that technological change requires (see table).

From the data and analyses summarized above, several key areas emerge as priorities for action for Indonesia to seize the opportunities at hand by leveraging technological change in its favor, and providing its population with meaningful job opportunities.

Those include the following: (1) pursue efforts to make legal and regulatory frameworks supportive of competitiveness and entrepreneurship: this implies, for example, more flexible labor markets, (2) foster openness and diversity across economy and society, cultivate appetite for change and encourage a national culture of diversity and curiosity, (3) consider upcoming economic and social changes as opportunities to grow, attract and retain new talents, focusing especially on younger generations.

Keep in mind that globalization has largely benefitted the Asia-Pacific region and that it should continue to do so.

However, the region will need to consider that “what got you here may not take you there”, i.e. that commodity exports and labor-intensive manufacturing may not be the best engines for the upcoming decades. This is due both to predictable convergence among wages and labor regulations at the global level, but also to the rapid replacement of low-qualification workers by robots and algorithms.

Identifying labor-intensive niches in a highly-automated global economy could be a viable temporary approach, but ultimately all countries in the region should consider the path adopted by Singapore to foster innovation and become a “smart nation.”

Last but not least, education remains central to all of the above; continued efforts to raise the level and quality of basic education and to enhance the average level of technical, vocational and managerial skills will continue to be key to Indonesia’s future.

A good place to start creating the appropriate mindset across Indonesia’s large and growing population is the modernization of government and improved citizen access to public services.

For example, allowing citizens and local businesses to access e-procurement platforms would have three immediate effects: (1) it would allow small businesses (a majority among Indonesian enterprises) to bid easily and in a cost-effective fashion for public contracts, (2) it would enhance transparency and build trust between government and citizens, and (3) it would contribute to building the image of an efficient, technology-savvy and future-oriented government.

The Indonesian government also has a vital role to play in fostering efficiency and flexibility across local labor markets, and encouraging the country’s schools and universities to focus in the delivery of employable skills. This will imply better interactions between the education sector and the business sector, both in the formulation of formal education curricula and in the design of life-long learning strategies and tools.

Distance-learning, Massive Open Online Course (MOOCs) and other ways to enhance and update local skills would also benefit from national policies to enhance network readiness, broadband infrastructure and affordable access to internet resources.

In the end, however, with the size and demography that characterize the country, it all boils down to talent: identifying people with the ability to contribute to national growth and competitiveness, and giving them a maximum range of opportunities to do so is a mission where the public sector can show the way, and encourage similar innovative, ambitious and action-driven approaches from other parts of Indonesia’s society, from academia, to business and to citizens themselves.
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The writer is executive director for Global Indices, INSEAD and founder and co-editor of the Global Talent Competitiveness Index Report.

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