Why Indonesia’s green jobs initiative and vocational training revival matter now

Many parents in Indonesia expect their children to find jobs quickly following graduation, with decent pay and workplaces. That is why many are sent to vocational schools – Sekolah Menengah Kejuruan (SMK) – so that they are better prepared to enter the world of work than their peers.

However, statistics counter the popular belief that this approach is likely to deliver success. As of August 2023, vocational school graduates have the country's highest unemployment rate, triple that of elementary-level graduates. Therefore, longer school years and vocational tracks do not correlate with employment chances, showing a mismatch between education and employment.

Indonesia has ambitiously sought to enhance workforce capabilities in recent years, ensuring its labour market becomes responsive, sustainable and equipped to face modern challenges. Central to this strategy is the fostering of green jobs, promoting a demand-driven approach and revitalizing technical and vocational education and training (TVET).

These initiatives integrate key policies such as the development of the labour market information system, among other key strategies stipulated by the country's leadership regarding TVET revitalization and the National Strategy for TVET Reform (Strategi Nasional/Stranas Vokasi).

These strategic policies have been in play since 2022 when the National Team for TVET Coordination – Tim Koordinasi Nasional Vokasi (TKNV) – was established. To ensure the workforce is rapidly absorbed by industry, representatives from the Indonesia Chamber of Commerce are on TKNV’s steering committee. Inputs from employers, the “demand side”, are expected to better align and update TVET policies. This notion can address the problem of mismatch.

Green jobs provide a sustainable solution to counter the worsening effects of unsustainable practices by promoting environmentally friendly industries and reducing ecological harm.

As traditional practices continue to deplete natural resources and contribute to pollution, the shift toward green jobs supports renewable energy, waste management and sustainable agriculture, ensuring economic growth without compromising the environment.

Currently, green jobs in Indonesia contribute only 2.62% of workers or around 3.6 million people, according to Indonesia Workforce Statistics, 2023.

By investing in green skills and eco-friendly innovations, societies can transition to a more sustainable future, creating employment opportunities while addressing climate change and environmental degradation.

Indonesia has strategically positioned green jobs as a cornerstone of its future economy and the National Development Agency of Indonesia (Bappenas) must take the lead to envision its direction.

As the host of the Indonesia Sustainable Development Goal Secretariat, Bappenas is responsible for developing macro policies to achieve development goals, where green jobs play a vital role in ensuring a just and sustainable transition.

To put into policies, Bappenas has conceived Green Jobs strategies through its Medium-Term Development Plan (RPJPM) 2025-2029 as a part of the economic transformation agenda.

It emphasizes the creation of Green Jobs not only as a solution to sustainable practices but also as an approach to creating decent work and a balanced labour market supply-demand through a robust ecosystem and competencies for workers.

The Green Jobs Road Map is being developed as a reference for stakeholders to increase awareness and promote Green Jobs.

It defines green jobs as those that contribute to preserving and restoring the environment and promoting decent work by specific tasking and skilling, environmentally friendly business processing and producing environmentally friendly output.

The roadmap includes a regulation framework, public literature and enhanced public participation. With all the stakeholders’ commitment, Indonesia is confident that sustainable employment will be achieved.

In 2022, Indonesia enacted Presidential Regulation Number 68 of 2022 regarding TVET revitalization, underscoring its commitment to revamping its TVET system. The details of this commitment are laid out in the National Strategy for TVET Reform (Strategi Nasional/Stranas Vokasi).

It integrates key policies such as developing the labour market information system to upgrade the quality of vocational training and education. It ensures it meets international standards and addresses the specific skill sets required in the workforce.

The policy supports establishing TVET centres of excellence, enhances the quality of vocational educators and promotes partnerships between industry and educational institutions. More importantly, the Stranas document is pivotal in convening stakeholders.

The TVET National Team was established as a strategic body to oversee and coordinate vocational training nationwide. Its role is to ensure that vocational training programmes are efficiently executed and align with national economic goals.

This initiation also led to the formation of the TVET Regional Team to encourage participation and collaboration of stakeholders at the local level.

The demand-driven approach to workforce development focuses on aligning skills training with market needs, for which the labour market information system is pivotal.

Collecting, analyzing and publishing data related to job vacancies, skills requirements and employment trends helps bridge the gap between labour supply and industry demand.

The system ensures that training programmes are relevant and tailored to the economy’s evolving needs, enhancing job placement rates and productivity.

Stakeholders have also made significant progress, making the labour supply meet demand. The Ministry of Education and Culture, since 2019, has been pushing its flagship programme,

SMK-PK (Sekolah Menengah Kejuruan – Pusat Keunggulan) aims to improve selected vocational middle schools and initiate cooperation between schools and surrounding industries.

This programme has been complemented by transforming SMKs from a public school into a local enterprise called BLUD (Badan Layanan Usaha Daerah).

This transformation enables SMKs to implement the “teaching factory” concept and generate income through commercial cooperation with industries. They can also tap the “matching fund” provided by the Ministry.

The programme comes with a new measurement called “social returns of investment,” encompassing broader expected outcomes, such as funds generated through cooperation and improved students’ skills.

Vocational training has also seen several innovations. Since 2017, the Ministry of Manpower has been developing community training centres (BLK Komunitas) in regions with limited TVET facilities. In this programme, the Ministry of Manpower selects community proposals and assists with construction and training packages.

The implementation of BLK Komunitas until 2023 has resulted in 4,282 workshop buildings. However, fewer than 300 units have been considered sustainable as business entities, allowing them to operate without government support.

Community-based TVET facilities can broaden the scope of opportunity to garner public funds and collective support.

The Indonesia Chamber of Commerce – KADIN – are on TKNV’s steering committee and is playing a crucial role in giving inputs from the “demand side” so that it is better aligned and updated TVET policies.

This notion can address the problem of mismatch. KADIN has also started building capacity to empower its network at the regional level and creating a digital platform with labour unions to offer training for workers and job seekers.

This strategic focus on green jobs, a demand-driven approach and TVET revitalization is now crucial due to several pressing factors:

Technological changes have also reshaped industries, and TVET can adapt to provide workers with new skills to remain competitive.

Indonesia’s efforts to improve the state of work through the development of green jobs, a demand-driven approach and TVET revitalization are not just timely but imperative for the nation’s sustainable development and competitive edge in the global marketplace.

By aligning educational outcomes with market demands and focusing on sustainability, Indonesia is paving the way for a resilient and prosperous future. These initiatives can provide a roadmap for other nations to emulate.

To maximize the impact of these initiatives, Indonesia is collaborating with the World Economic Forum to launch an Indonesia Jobs Accelerator, becoming the fourth country to join the Forum’s Global Learning Network focused on creating better job opportunities.

By joining the network of over 30 Accelerators addressing socio-economic issues, Indonesia will share best practice strategies, harness public-private sector commitments and change mindsets to steer positive change for labour markets nationally and globally.