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Structured vocational internships: Bridging SMEs and skilled workforce in Indonesia
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I
ndonesia faces serious challenges in overcoming unemployment, especially among vocational graduates. On the other hand, micro, small and medium enterprises (MSMEs), which are the backbone of the economy, also need an injection of skilled labor to improve their competitiveness. There are unresolved gaps in the unemployment issue, especially when many businesses need skilled labor.
Data from the Cooperatives Ministry and MSMEs Ministry show that 99.62 percent of MSMEs in Indonesia are labor-intensive micro businesses. Meanwhile, Statistics Indonesia (BPS) noted that unemployment was expected to reach 7.2 million people in 2024, of which 1.8 million are vocational graduates (SMK, Polytechnic, Diploma) from Gen Z. Ironically, the number of unemployed Gen Z individuals with their highest education at the elementary or junior high school level is even lower, at 800,000 people.
To overcome this challenge, the Indonesian Chamber of Commerce and Industry (Kadin) supports the Industry Ministry in encouraging the implementation of a structured internship program in the business and industrial sectors. The structured internship program is inspired by the dual vocational education and training (dVET) system, which has proven successful in European countries such as Switzerland, Germany and Austria. dVET is a model that combines theory taught in schools with hands-on practice in industries, ensuring that graduates acquire skills relevant to labor market needs.
Indonesia has adopted this system and the government has stated its commitment through Finance Ministry Regulation No. 128/2019, which provides super tax deduction incentives for companies that can organize vocational internship programs. This incentive allows companies to deduct gross income by up to 200 percent of internship program costs, including the provision of facilities, materials and instructor fees. Candra Bachtiyar, MT, MBA from the Industry Ministry, explained that this program was in the interest of industry players.
“Currently there are 76 companies that have received incentives with a total value of more than Rp 1 trillion,” said Candra. The program is designed to prioritize MSMEs, the majority of which are labor-intensive businesses.
International collaboration is a key factor in the success of this program. Kadin East Java and Kadin Central Java have partnered with the Swiss government through Swisscontact to strengthen their capacity as the official facilitator to introduce structured internships to the industry sector and support their implementation. The structured vocational internship has inspired various innovations, such as moving the internship from the second year to the final semester in vocational and polytechnic schools, thereby facilitating employment by industries. Additionally, the initiative not only targets large companies such as PT Marimas Putera Kencana and VIVERE Group, but also involves MSMEs such as Numansa Batik and Cendera Mata Keramik Dinoyo.
The SS4C program has received positive responses from industry actors. VIVERE Group, a leading interior furniture company, has implemented an internship program with by KADIN and SS4C.
Head of VIVERE Learning Center, Rosita Kusumasari, said an internship program implemented with the right methodology was an important means to achieve “link and match” between vocational education and the business world/industrial world (DU/DI). The internship program will bring benefits for companies to get graduates and prospective employees who are ready to work and compete, in accordance with the needs and challenges of the industry.
Meanwhile, PT Marimas Putera Kencana has utilized two dVET tools, namely in-company training and cost-benefit analysis, which are considered very helpful in preparing interns to be more work-ready. “We were being taught the methodology to deliver the material, so that every supervisor can effectively deliver the mastered material to each intern,” said Yohanes Paijanto, master trainer from PT Marimas Putera Kencana.
In conclusion, this structured vocational internship program is expected to serve as an effective bridge between vocational graduates and industry, especially MSMEs. Josef Tschoep, technical advisor at Swisscontact, emphasized that the adaptation of the dVET model in Indonesia had been tailored to local conditions, allowing it to function optimally as a link between industry and vocational students. Kadin's database system, which stores data on the hard and soft skills of applicants, allows companies to directly select prospective participants who match their needs.
“Make vocational internship one of the company's HR recruitment channels,” said Lia Sidik, PhD, a branding expert. With a structured vocational internship program supported by the government, Kadin and various stakeholders, it is hoped that companies, including MSMEs, in Indonesia can more easily access skilled workers and contribute significantly to driving the national economy.
