Without university degrees or technical qualifications, North Jakarta residents Tri Adhitia Diantomo and Riska — both 22 years old — are typical of the majority of the 82 million-strong millennial generation, which makes up the bulk of Indonesia’s much-touted “demographic bonus”.

The “bonus”, defined as a period when a country’s productive population (aged 15 to 64) outnumbers its nonproductive population (below 15 and over 64), is currently underway and is expected to peak in 2030, with millennials the largest generation among the productive population.

Ariane Utomo, a social demographer at the University of Melbourne who took part in the 2010 study, said that she preferred the term demographic “window of opportunity” to “bonus”, and that the expectations surrounding the so-called “bonus” may be based on assumptions that are no longer applicable.

Unlike in South Korea, which welcomed its demographic dividend, Indonesia sees the arrival of the largest educated cohort of young adults as coinciding with a complex set of labor market and economic conditions, Ariane said.

South Korea, on the other hand, had a high number of young adults from the mid 1970s to the mid 1980s when there were plenty of manufacturing jobs around, she explained.

Current-day Indonesia, meanwhile, is going through what economists call “premature deindustrialization”, with the share of manufacturing jobs stagnating without ever reaching the heights that earlier industrializing nations such as South Korea enjoyed.

At the same time, Ariane said, millennials were entering the labor force at a time when there was “a rapid global transformation in the nature of work”, characterized by the rise of the gig economy and an increase in vulnerable
employment.

All eyes on the privileged

In November, President Joko “Jokowi” Widodo unveiled his crack new team of young expert staffers, who seem to embody the millennial image, with entrepreneurs aplenty, not to mention a couple of Ivy League graduates in the mix.

At a sprightly 35 years old, Gojek founder and newly-appointed Education and Culture Minister Nadiem Makarim, is probably the country’s premier millennial, and has said he would be the “millennial representative” in the President’s Cabinet.

But, with a bachelor’s degree from Brown, an MBA from Harvard and an estimated net worth of US$100 million, Nadiem is far from the typical Indonesian millennial, and the President seems to have realized that, saying in his second inaugural address that the development of human capital — particularly that of the younger generation — would be one of the main priorities of his second term.

Consequently, the Jokowi administration has focused its efforts on helping millennials improve their skills and supporting their transition between school and the working world, with the aim of preparing young people for so-called Industry 4.0 jobs — with programs such as the preemployment card and the President’s planned “talent management” body.

Ariane said there was nothing wrong with the government’s efforts at “skilling” but that even if millennials gained the skills, it was unclear whether there would be enough jobs.

Entrepreneurship has been touted as another solution to the changing economic landscape, with the President preparing an omnibus law to empower small-and-medium businesses like the ones Adit and Riska dream of one day starting.

But Ariane pointed out that, until very recently, most of Indonesia’s workforce had been self-employed, particularly in the informal sector.

“The evidence is not very clear whether policy campaigns to promote entrepreneurship can be effective in generating millions of meaningful, stable and upward-mobility enabling jobs,” she said.

While the problem is a global one, the challenge in Indonesia is exacerbated by the sheer number of young people entering the labor market, many with skill sets that do not match industry.

In the end, Ariane said the current situation was unprecedented and that “nobody really knows how to tackle the changing nature of work.”

“One thing the government should do is to broaden the social safety net to help young people cope with their precarious position,” she said.

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