Indonesia - Country Commercial Guide
Education and Training

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-01-15

Capital:  Jakarta
Population:  267,026,366 (July 2020 estimate)
GDP:  USD $3.25 trillion (2017 estimate, Purchasing Power Parity)
Currency:  Indonesian rupiah (IDR)
Language:  Bahasa Indonesia (official), English, Dutch, local dialects (of which the most widely spoken is Javanese)

UNESCO Student Mobility Number
Indonesia has 49,900 students studying abroad.

CIA World Factbook
40.63% of the total population is less than 24 years old.

OVERVIEW

Indonesia is the world’s fourth most populous country and third-largest democracy.  It is an archipelago comprised of over 17,500 islands and is home to 267 million people, 87% of whom identify as Muslims, making it the world’s largest Muslim-majority nation on earth.  The population is dominated by a young generation; close to 50% of whom are younger than 30 years old.  The country’s middle class is growing rapidly and is the biggest in Southeast Asia.  Indonesia is the world’s 10th largest economy in terms of purchasing power parity and a member of the G-20.  Prior to the Covid-19 crisis, Indonesia was able to maintain a consistent economic growth, recently qualifying the country to reach upper middle-income status (source: World Bank https://www.worldbank.org/en/country/indonesia/overview).  

Indonesia has compulsory education that lasts nine years, from age 7 to age 16.  The primary to post-secondary education academic year begins in July and ends in June. The Indonesian school system is immense and diverse, with over 50 million students and three million teachers in more than 250,000 schools throughout the archipelago. Based on data on Indonesian education statistics, the number of university students was about 7.5 million in 2019 and is projected to grow over 20% in the next 2 years.

Universities in Indonesia are largely private.  There are three Ministries that supervise and organize the entire system: the Ministry of Education and Culture, the Ministry of Religious Affairs, and the Ministry of Research and Technology.  The Education and Culture Ministry oversees state primary, junior, and secondary schools and vocational study; the Religious Affairs Ministry has control of Islamic schools and other religious schools; and the Ministry of Research and Technology is responsible for universities, polytechnics, and research.

Indonesian culture is notable for prioritizing family closeness and connection.  Of the major concerns of Indonesian students when considering study abroad, 46% of young Indonesian students cited fear of homesickness and 47% mentioned safety and security in an AFS survey (www.afs.org).  The desire to stay closer to home, in addition to the high cost of tuition/fees at U.S. institutions, has resulted in U.S. institutions losing market share to rivals, especially Indonesia’s neighboring countries like Australia.

Australia is the number one choice for Indonesians abroad, largely due to geographic proximity, perceived institutional quality, and English-language instruction.  More than 12,000 Indonesian students are studying in Australian higher education institutions.  One in four Indonesian students who study at universities overseas chooses to study abroad in Australia.  Adding students in vocational training to the number pursuing university studies brings the total of Indonesian students studying in Australia to more than 29,000.  The most popular courses for Indonesians in Australia are in the fields of management and commerce, society and culture, and engineering and technology. There are also significant increases in students choosing to study education, natural and physical sciences, and agriculture and environmental studies.  Malaysia became the second-most popular destination for Indonesian students in 2017, which is reflective of the Indonesian focus on affordability and cultural similarities.

SUB-SECTORS

Indonesia is a huge potential market for U.S. providers of secondary, tertiary, and vocational education.  The Indonesian government has made a clear commitment to education.  The government has taken steps toward education reforms and greater investment in education in recent years.  Significant increases in government spending have led to real gains in terms of secondary enrollment and the number of higher education students has doubled over the last five years.  This equates to an increase in the number and quality of students seeking post-secondary education opportunities.

In the 2019-2020 academic year, 8,300 students from Indonesia were studying in the U.S. (down 0.7% from the previous year).  Indonesia is the twentieth leading place of origin for foreign students studying in the U.S.  Over 96 percent of all students that apply for visas are granted them by the U.S. Embassy in Indonesia and 95% of Indonesians studying abroad are self-funded.  This group of students finances their education privately with financial support from their parents or assistance from overseas relatives.  The remaining five percent of students are financed by local universities, companies, government, and scholarships through different grants.

There are two types of high schools in Indonesia: SMA (Sekolah Menengah Atas) and SMK (Sekolah Menengah Kejuruan).  SMA students are prepared for higher education, while SMK, as a vocational school, prepares its students to work after finishing school, without higher education.  There are many international schools in Indonesia.  International schools adopt an international curriculum such as IB (International Baccalaureate) or CIE (Cambridge International Examinations).

Top 5 academic majors chosen by Indonesian students studying in the U.S.

Year

Business/Management

Engineering

Life Science

Math & Computer Science

Health Professions

2016

31.1%

17.1%

7%

5.6%

1.9%

2017

30.3%

16%

6.5%

7.1%

1.9%

2018

28%

17.8%

6.8%

8.5%

1.9%

2019

27.4%

16.7%

6.5%

10%

1.5%

2020

23.4%

15.1%

6.8%

18.9%

1.8%

Source: Open Door 2020

OPPORTUNITIES

A recent survey conducted by a leading Indonesian newspaper shows that most students perceive academic institutions in the U.S. as offering higher quality education compared to academic institutions in other countries.  The U.S. has consistently been a desired destination for Indonesian students seeking to study overseas.  U.S. universities and community colleges can become more visible in the Indonesian market through participation in education fairs, including the U.S. Department of State’s EducationUSA Fairs and/or by working with education consultants.  Education consultants are very popular with prospective Indonesian students and their parents because they serve as “one-stop-shops” for applying to schools and provide services such as assisting with visa applications and arranging travel and accommodations.

To compete with other countries offering lower tuition, U.S. universities are participating in “1+1”, “1+3”, or “2+2” programs, which enable students to apply credits from the years of study at a local university towards an undergraduate degree at a U.S. university.  Studying at U.S. community colleges has also become an increasingly popular option for Indonesian students.  Some 40% of Indonesians applying for student visas to the U.S. have been accepted at a community college and half of the top 10 school destinations are community colleges.

Finally, vocational schools have increasingly become targets of Indonesian government interest.  The Indonesian government is planning to improve the current vocational education system with multiple skill certificates, in which vocational school students can earn certificates after completing training courses in addition to their high school graduation diploma.  This system could speed up the process of workforce employment.  Data from the Education and Culture Ministry shows that Indonesia currently has more than 13,000 vocational schools, each of which specializes in one of several fields, including tourism, business, maritime industries, and machinery.  The Indonesian government has invited business leaders to contribute in an expanded role to shape the curriculum and set the skill standards relevant to the demands of the job market.  Business leaders are also expected to provide internship opportunities and on-site training programs for both students and teachers.  There may be opportunities for U.S. vocational schools to partner with Indonesian vocational schools to support the development of curricula and establish a presence in Indonesia.  In addition, U.S. vocational schools may enjoy increasing appeal as opportunities to gain overseas education and employment experience.

The government supports Indonesian students studying abroad by offering the Indonesia Endowment Fund for Education, abbreviated as LPDP (Lembaga Pengelola Dana Pendidikan).  LPDP is a full-ride scholarship from the Indonesian Ministry of Finance for all Indonesian citizens.  LPDP has a vision to be the best regional fund management institution to prepare future leaders and encourage innovation for a prosperous, democratic, and just Indonesia.  The LPDP service program consists of scholarships, research funding, and fund management (investment).  By 2018, there were 4,000 student awardees to go abroad.  In total, there are 20,255 students being funded by LPDP scholarships.  In 2019, the government funded 50 trillion rupiah for LPDP’s budget.

DIGITAL MARKETING SRATEGIES

The development of digital marketing in Indonesia continues to increase significantly over time.  Indonesia’s digital landscape is rapidly growing, with the country’s population of over 260 million people and the rapidly rising number of Internet users.  The social media penetration rate in Indonesia is 40%.  The use of digital media in the education sector in Indonesia has increased tremendously due to COVID-19. 

In Indonesia, over 530,000 schools have closed amid the coronavirus outbreak, effecting 68 million students from pre-primary through tertiary levels and making the need for effective EdTech extremely urgent.  Local platforms, such as “Ruangguru” (an interactive e-learning platform for K-12 students in Indonesia) and “Cakap” by Squline (a tutoring platform for language learning), have grown during this time, but overall, the sector is still emerging.

Increased demand for online learning is driving the growth of Indonesia’s leading EdTech platforms.  The most popular EdTech products offer learning management systems for teacher-student collaboration and interactive classroom tools for hosting live teaching sessions, such as G-Suite for Education, Microsoft for Education, Zoom, etc.  EdTech is not accessible to all learners, however, and Indonesia’s education system is not well-equipped for quickly scaling up online learning.

Many students in rural areas lack connectivity and many lower-income students lack access to devices needed to use EdTech tools.  This contrasts with lower-tech options such as television; according to data from the 2018 national socio-economic survey, 95% of students accessed TV in the prior week (96.6% in urban and 92.3% in rural areas).  To help address these equity of access issues, the Ministry of Education and Culture launched educational programming called “Belajar dari Rumah” (Study from Home) on national TV on April 13, 2020.

There several social media sites that are very popular among students in Indonesia, such as WhatsApp, Instagram, Twitter, Facebook, Linkedln, YouTube, TikTok, etc.  Despite increasing demand, Indonesia’s EdTech sector faces major bottlenecks that prevent it from replicating the level of success seen in other technology sectors and in other countries.

Supply-side constraints include:

  • Difficult access to funding
  • High marginal costs, particularly to acquire and retain new customers
  • A shortage of qualified talent to develop and maintain products

These are coupled with demand-side constraints, including:

  • A low willingness to pay from schools and parents
  • A lack of digital literacy, particularly on the part of education providers
  • Poor digital infrastructure, which limits connectivity in remote regions and download speeds across the country

EVENTS

Due to the COVID-19 situation in Indonesia, there are not many education fairs available at this time. The below fairs are subject to change, depending on the COVID-19 situation in Indonesia:

  • Indonesia International Education & Training Expo 2021 (February 4-7, 2021)

https://10times.com/iiete

  • The International Education Fairs in Jakarta, Medan, and Surabaya - Feb 26-28, 2021

Due to COVID-19, exhibitors can choose to attend either physically or online. https://www.educationfair.nl/event/international-education-fairs-indonesia/

RESOURCES

       https://www.trade.gov/education-industry

  • Industry and Analysis, Office of Supply Chain, Professional & Business Services

www.trade.gov/professional-and-business-services

  • EducationUSA Indonesia

https://educationusa.state.gov/centers/educationusa-us-embassy-jakarta

  • Ministry of Education and Culture

   www.kemdikbud.go.id  

T: +62-21-570-3303/5790-3020 ext.: 2115

  • Ministry of Research and Technology

www.ristekbrin.go.id 

  • American Indonesian Exchange Foundation (AMINEF)

www.aminef.or.id

T: +62-21-5793-9085/86

U.S. COMMERCIAL SERVICE CONTACT

Yulie Tanuwidjaja, Commercial Specialist
U.S. Commercial Service – Indonesia
Email:
Yulie.Tanuwidjaja@trade.gov
Phone: +62-21-5083-1000