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Analysis: 2020 knocking, but is Indonesia’s workforce ready to open the door?
As a new decade dawns, providing an opportunity to look back on what the previous decade has taught us
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s a new decade dawns, providing an opportunity to look back on what the previous decade has taught us. The 2010s were undoubtedly a decade of data and digital disruption. Organizations around the world, big and small, public and private, were engaged in data and digitally driven transformations.
Despite this digital-drive, research by Boston Consulting Group (BCG) conducted in 2017 reveals that 70 percent of publicly announced digital transformations failed to achieve a company’s stated ambitions, timelines or both. That must change in the decade ahead. BCG analysis shows that to unlock the full value of data and digitalization, solutions should focus 10 percent on strategy and algorithms, 20 percent on technology and 70 percent on true organizational change.
The 2020s will be a decade where data and digitalization will become as pervasive in business as in our everyday lives. The stakes will be higher and the scale greatly increased. Success will be seized by those who truly own that 70 percent.
At the heart of this focus is an organization’s ability to compete at the rate of learning; to unlearn, learn and relearn faster than the competition. That means ensuring the workforce has the relevant skills not just for today, but the ability to adapt to new skills needed for the future. The rapid rate with which required skills will change is what makes this problem so complex. The half-life of skills today is approximately five years — and it is falling continuously. Software engineers are one example where skill redevelopment may need to occur as rapidly as every 12 to 18 months.
Indonesia stands in the shadow of substantial potential economic growth. According to an International Monetary Fund analysis, the nation’s GDP growth measured 5 percent in 2019. While that represents a slowdown in the face of significant economic headwinds, it is markedly above the global average growth of 3.2 percent, and steers Indonesia toward becoming the fourth-largest global economy by 2030.
Data and digitalization will remain a core driver moving forward and one which Indonesia must embrace. A recent study estimated that the value of the nation’s digital economy alone will double to US$101 billion by 2024. The value of digital transformations as a whole will be magnitudes higher still, with the World Bank projecting over 70 percent of new value created in the global economy in the next decade will be based on digitally-enabled platforms.
To realize the full value of this transformation, we will need to rethink how we build the skills of our workforce. BCG’s “Decoding Global Digital Talent”, one of the largest ever global surveys on digital talent, reveals how technological change will have an unprecedented impact on jobs. More than half (53 percent) of respondents from Indonesia believe that technology will greatly impact their jobs, necessitating a focused effort on building new skills.
In that context, it is perhaps no surprise that job security was noted as the number one priority for Indonesian talent. With unprecedented transformations ahead of us, job security will become an increasingly rare concept if we do not continuously remain skill-relevant. Solving this skills dilemma will require some uniquely focused action by individuals, organizations and policymakers.
Individuals
Individuals who wish to remain in demand in an evolving job market must take responsibility for keeping their skills relevant. An average individual spends less than one and a half hours a week on building new knowledge and skills. This number will need to more than triple, to reach five-plus hours a week.
With a new decade dawning, avoid the tired tradition of a novelty resolution and instead make a commitment to continuously learning and updating your skills. If you are not ready to disrupt yourself, you should prepare to have your working life disrupted.
Organizations
Organizations must reframe how they understand learning. One of the fundamental challenges in building new skills in terms of speed, scale and scope is the dated belief that skill-building is a human resources (HR) issue to solve. CEOs and business leaders who wish to unlock the full potential of data and digitalization need to reframe the skills agenda to make them central to their business agenda. Learning must be embedded into organizational processes, routines and meetings, not just left to one side and picked up for periodic training events, workshops or perfunctory online courses.
Another traditional way of thinking that must evolve is the belief that workforces do not wish to be reskilled. BCG’s “Decoding Global Digital Talent” revealed that 72 percent of respondents in Indonesia were willing to reskill if doing so made them more employable. Organizations need to create a learning ecosystem where employees are incentivized to be learning agile to ensure they remain skills-relevant today and in the future.
Policymakers
Policymakers must recognize that reskilling and retraining the existing workforce represent essential levers to fuel future economic growth, enhance societal resilience in the face of technological change and pave the way for future-ready education systems that develop the next generation of workers.
This strategy should begin with building industrywide skills forecasts and standards and identifying critical workforce and skill mismatches within the economy.
This study should form the foundation of how policy makers shape the future skills agenda. The Singapore government’s SkillsFuture program represents a prime example, offering a widely recognized national initiative to provide citizens with career-long learning opportunities. India is also now focusing on revamping its large-scale program under Skill India Mission, designed to upskill millions of Indians through public-private partnership.
Indonesia is already taking steps in the right direction with the impending rollout of the government’s preemployment card. This initiative aims to provide ongoing vocational training that prepares the workforce with skills that match industry needs, while upskilling existing workers to ensure they remain relevant in the workplace. With a national labor force of over 133 million, the focus must remain on widening reskilling opportunities to tackle the growing need for digital talent.
Preparation
We have a tendency to speak of the future as if it is over the next horizon, but the next decade is already here. The 2020s are on our doorstep, knocking on the door.
It is essential that individuals, organizations and — crucially — policymakers act to ensure that they are prepared for that future. Success in the 2020s will not be about what you know now, but about how you adapt to learn the skills you require tomorrow. Only with all parties working together can we unlock the full value of growth for Indonesia’s future.
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Sagar Goel is an associate director with Boston Consulting Group and leads BCG’s People Strategy practice in Southeast Asia. Ching-Fong (CF) Ong is managing director and senior partner and Southeast Asia leader for DigitalBCG.
