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A Goverment Effort to Increase The Competence of Indonesian Human Resources

The Fourth Industrial Revolution presents challenges in various fields, as well as in the employment sector. Improved technological systems, internet networks and artificial intelligence on one side created several new employment sectors. But on the other hand, it should also be noted that several jobs have been taken over by technology. At this moment, skills and competencies of
Human Resources (“HR”) play a very important role, especially in ensuring that Indonesia can compete economically.

Unfortunately, the development of technology and artificial intelligence does not appear to be directly proportional to the readiness of Indonesia’s human resources. If we refer to the 2017 Indonesian Labor Report issued by the International Labor Organization in 2017 (“ILO 2017 Report”), there are various skills mismatches that need to be addressed. According to the ILO (2014), skills mismatch means various forms of imbalance between available skills and skills needed in the world of work. In this regard, ILO 2017 Report provides recommendations which identify new skills which human resources need to master. Our human resources need to master new skills to prevent them losing their job due to their inability to adapt to technological developments.

In addition, the existing regulatory instruments have not specifically regulated the quality standards of human resources that must be achieved to face
the Fourth Industrial Revolution. Therefore, the government and related ministries need to conduct various efforts to face the challenges posed by these technological developments. One of the ways to improve human resource competency can be done through an institution formed by President Joko Widodo vide Presidential Regulation Number 69 of 2018 concerning changes to the Presidential Regulation number 29 of 2015 concerning the Ministry of Industry (“Presidential Regulation No. 69/2018”). In Presidential Regulation No. 69/2018, there was an addition to the function of the Ministry of Industry, as stipulated in Article 3 paragraph d1, namely that the Ministry of industry also performed the function of implementing HR development in industry. To support this function, the government formed a new body under the Ministry of Industry, which is the Industrial Human Resources Development Agency.

The Industrial Human Resources Development Agency is on the echelon I level within the Ministry of Industry. Previously, the tasks and functions of the Industrial Human Resources Development Agency were conducted by a work unit of the Center for Industrial Education and Training led by echelon II officials. Thus, the Industrial Human Resources Development Agency that reports directly to the Minister of Industry will have heavier tasks and functions to formulate and implement technical policies that have a direct impact on improving human resources in Indonesia.

These tasks and functions include (i) technical policies formulation and the implementation of industrial HR development; (ii) conduct monitoring, evaluation, and reporting on the implementation of tasks in the field of industrial HR development, (iii) administrating the Industrial HR Development Agency, and perform other functions assigned by the Minister of Industry.

According to current labor conditions, human resource needs to be developed through several steps, namely:

(i) Building cooperation with other relevant ministries, such as the Ministry of Manpower and the Ministry of Research, Technology and Higher Education, also with entrepreneurs, to map the skills sectors that need to be improved by current Indonesian HR;

(ii) Establishing educational programs starting from vocational and undergraduate levels which match industry requirements.

The implementation of these two stages may not show a real impact in the short term given that human resource development is a long-term investment. However, this step in forming the Industrial Human Resources Development Agency is a good first step to focus government policy on Indonesia’s HR development goals. KBA