STRONGER Opportunities for Australian education and training providers EDUCATION in Indonesia PARTNERSHIPS This project is supported by the Australian Government Department of Education through the Enabling Growth and Innovation (EGI) program. For further information, please visit internationaleducation.gov.au This report complements Austrade’s Indonesia Market Action Plan (MAP), also funded through the EGI program and overseen by the Council for International Education and English Australia. The MAP aims to enable greater collaboration to strengthen the position of Australian education, training and research in Indonesia, and reflects core objectives of the National Strategy for International Education 2025 and the Market Development Roadmap AIE2025. Disclaimer This report, commissioned by the Commonwealth Department of Education and Training, has been prepared by the Australia-Indonesia Centre (AIC). The report is a general overview and is not intended to provide exhaustive coverage of the topic. The information is made available on the understanding that the AIC and the Commonwealth of Australia are not providing professional advice. While care has been taken to ensure the information in this report is accurate, we do not accept any liability for any loss arising from reliance on the information, or from any error or omission, in the report. We do not endorse any company or activity referred to in the report, and do not accept responsibility for any losses suffered in connection with any company or its activities. About the Australia-Indonesia Centre The Australia-Indonesia Centre is a bilateral research partnership initiative supported by both governments, leading universities and industry. Established in 2014, the Centre works to advance the people-to-people and institutional links between Australia and Indonesia in the fields of science, technology, education and innovation. We do this through a research program that tackles shared national challenges, and through engagement activities that promote greater understanding of contemporary Indonesia and strengthen bilateral research linkages. To discover more about the Centre and its activities, please visit: australiaindonesiacentre.org Stronger education partnerships: Opportunities for Australian education and training providers in Indonesia Table of Contents ABBREVIATIONS ..................................................................... 4 EXECUTIVE SUMMARY ............................................................ 5 THE CONTEXT ......................................................................... 9 INDONESIA’S EDUCATION AND TRAINING ENVIRONMENT ... 17 Authors: Eugene Sebastian, Violet Rish & Kevin Evans. HIGHER EDUCATION ............................................................. 25 VOCATIONAL EDUCATION AND TRAINING ............................ 35 Acknowledgements: We wish to thank the many individuals ENGLISH LANGUAGE TRAINING �������������������������������������������� 45 and organisations who contributed their time and insights to this report. We are SCHOOLS .............................................................................. 48 particularly grateful to Professor Abid Khan, EDTECH................................................................................. 53 Helen Brown, Helen Fletcher-Kennedy, Jesse Kartomi Thomas, Ghian Tjandaputra, CONCLUSION ........................................................................ 57 Joanna Donagan and Febi Trihermato. ANNEXES .............................................................................. 60 The report also draws from an extensive program of consultations with stakeholders A: National priorities ......................................................... 61 in Australia and Indonesia. We wish to also B: Current Regulations for Foreign Education Providers .... 64 thank many people in the Commonwealth Department of Education and Training, the C: Employment of foreign workers .................................... 66 Department of Foreign Affairs and Trade D: Financial regulations ..................................................... 69 and Austrade, all of whom made invaluable contributions to the report. REFERENCES ������������������������������������������������������������������������ 70 3 ABBREVIATIONS Abbreviations Austrade HE Australian Trade and Higher Education Investment Commission IA-CEPA ACICIS Indonesia Australia Comprehensive Australian Consortium for ‘In-Country’ Economic Partnership Agreement Indonesian Studies IQF AIC Indonesian Qualifications Framework The Australia-Indonesia Centre LPDP Indonesian Endowment Fund for BLK Education (Tertiary Scholarships) Non-Formal Work Training Centres MoEC BAN-PT Indonesian Ministry of Indonesian National Accreditation Education and Culture Body for Higher Education MoM BAN-SM Indonesian Ministry of Manpower Indonesian National Accreditation Body for Schools MoRA Indonesian Ministry of Religious Affairs BAPPENAS Indonesian Ministry for RISTEKDIKTI National Development Planning Indonesian Ministry of Research Technology and Higher Education BKPM SD Indonesian Investment Primary School Coordination Agency SMP DET Junior High School Australian Department of Education and Training SMA Senior High School DFAT Australian Department of Foreign SMK Affairs and Trade Senior Vocational School EdTech SPK Education Technology; Joint Cooperation School Online / Blended Modes of Delivery VET Vocational Education and Training ELICOS English Language Intensive Yayasan Courses for Overseas Students Foundation or Not-For-Profit Entity Stronger education partnerships: Opportunities for Australian education and training providers in Indonesia EXECUTIVE SUMMARY Indonesia has a significant need for education and training services. It has a young and expanding population and one of the world’s fastest-growing economies, but is facing a widening skills gap as it develops critical infrastructure and prepares for the jobs of the future. For many reasons, Australian education and training institutions are uniquely well placed to help Indonesia realise its education, skills and training aspirations. This report looks at how Australian providers can explore opportunities in Indonesia to the benefit of both countries. 5 EXECUTIVE SUMMARY Key findings — There is a large and growing demand for education and training in Indonesia. A small number of Australian providers are already actively pursuing their own agendas. Some are succeeding, some are at an early stage of business development, while some are revitalising their Indonesia strategy after seeing the rapid changes taking place in the country. — These providers are using different approaches. A few concentrate on government engagement, offering training ome to more than 260 million While Australian institutions are already solutions or niche consulting. Some have people, the majority of whom the destination of choice for Indonesian chosen to deal exclusively with industry are under 30, Indonesia is the students studying abroad, this report where it is relatively easier, and issues world’s fourth most-populous aims to help Australian providers evaluate of funding are less of a concern. Others country, the biggest economy opportunities to establish or expand seek to partner locally in various ways to in Southeast Asia and one operations in Indonesia. It seeks to identify access the student market. Providers have of the largest emerging economies in the barriers to and opportunities for providers. consistently identified the importance of world. With more than 50 million students It identifies the Indonesian national choosing the right partner. Hattending over 250,000 schools, the World priorities relevant to Australian providers. Bank ranks its education system as the It explores how local and foreign industry — We identified three primary partnership fourth largest in the world, behind China, players active in Indonesia are navigating models, each with a different degree India and the United States. the regulatory environment to deliver of risk, institutional commitment and regulatory complexity. We have termed Indonesia has had great success in education and training services. them general partnerships, strategic expanding access to education, but quality A number of Australian providers are active partnerships, and joint ventures. These issues remain. Authorities have recognised in Indonesia. This report identifies three demonstrate how some organisations a growing skills gap in the economy, with types of education partnership models, are navigating Indonesia’s regulatory, an increasing percentage of the workforce which we have categorised as general policy and development environments, considered lacking adequate levels of partnerships, strategic partnerships and and each contains many lessons for training. Indonesia’s long-term economic joint ventures. Based on these models, it Australian providers considering a prosperity will reflect how well the provides insights into types of in-country presence in Indonesia. country deals with this challenge, and its activities underway, the engagement government has set an ambitious goal of approaches used, and the opportunities — The vocational education sector may adding 57 million skilled workers by 2030. available and barriers to entry or expansion. present a particular opportunity for Australian providers, due to both the To meet this goal, Indonesia will need to The report covers five sectors: higher scale of demand and Indonesia’s stated partner with others, and