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As it enters the fourth year in office, the Indonesian government under President Widodo is continuing its efforts to revamp the country's higher education sector. Over the past year, the Indonesian government has launched various programmes and incentives to improve the quality and competitiveness of local universities. These include introducing lecture focused scholarships to improve the quality of faculty members, providing infrastructure funding and offering online courses among others. These collective efforts are focused on accelerating the country’s development in becoming a knowledge-based economy and tackling the looming threat of youth unemployment.
True to his campaign promises as outlined in the Nawacita, President Joko Widodo has made the education sector a priority under his administration since early on. One of his major breakthroughs to improve the country's tertiary education sector was the creation of a new Ministry of Research, Technology and Higher Education. This move aimed to better integrate education with research and technology, and in turn industry and graduate job opportunities.
In 2018, the Indonesian government allocated 444.131 trillion IDR for the education sector in the State Budget. Around 10% or 40.393 trillion IDR of this budget was allocated for the Ministry of Research, Technology and Higher Education. While a step in the right direction, the country still has a lot of catching up to do. Indonesian universities still rank poorly at a global level, and the lack of qualified faculty members among other issues mean that funding alone will not be able to make a significant impact in the short term.
Indonesia currently has 4,498 universities offering 25,548 majors. This is nearly double that of China with 2,825 universities although the former's population is less than one-fifth of the latter (See Higher Education: Indonesian Academia Must Open Up).
Despite this huge number, only three national universities in Indonesia managed to make it into the list of the world's top 500 universities, namely University of Indonesia (UI) (277), Bandung Institute of Technology (ITB) (331), and Gadjah Mada University (UGM) (402).
In Asia, only UI was added to the list of top 200 universities. This is far below that of China and Japan with 39 universities, South Korea and Taiwan with 24 universities, India’s 16 universities, Turkey’s 11 universities, Malaysia’s 5 universities, Thailand’s 4 universities, and Singapore’s two universities, of which the National University of Singapore, ranked number one on the list.
Quality has long been of concern to policy makers in Indonesia's higher education sector. For example, as of the end of 2017, only 65 out of nearly 4,500 universities hold A Grade accreditation status. The government expects the number to increase to 75-80 in 2018 (See Second Class: Indonesia’s Higher Education Sector In Need of Reform).
Top 10 Universities in Indonesia
Source: Ministry of Research, Technology and Higher Education.
Most of the underperforming universities are privately owned. Many of them offer substandard educational services which in turn produce poor quality graduates. This is one of the main reasons behind the high unemployment rate among Indonesian graduates which has continued to increase from 374,868 in 2016 to 463,390 in 2017.
It is this alarming trend that has driven the Ministry of Research, Technology and Higher Education to announce plans to close or merge 1,000 private campuses up to 2019. The merger has been designated as one of the four priority programs for 2018. The Ministry expects to complete the merger of 200 private universities in 2018.
Since 2015, as part of the efforts to improve the country's higher education institutions, the Indonesian government has ranked local universities based on four major assessment criteria so as to gauge their performance. First, human resources quality. Second, institutional quality. Third, student activity quality. Fourth, scientific research and publication quality.
In 2017, the government added three new assessment sub-components. They are the number of majors with international accreditation/certification, the number of students and community services.
Indonesian Universities Based on Their Cluster Ranking
Source: Ministry of Research, Technology and Higher Education.
Another major shortcoming of Indonesian universities is the lack of qualified faculty members. The majority of lecturers in Indonesia or 155,519 only hold a master's level degree, followed by those with a bachelor's degree accounting for 34,393, those with a doctorate degree equate to 31,554, and those with a professorship only number 5,389. In fact, it is widely predicted that Indonesia will soon experience a lecturer shortage crisis as more than 6,000 lecturers will retire in 2021 at a rate of 1,000 to 1,200 a year (See Indonesia’s Brain Drain Pains).
Red tape has added to the complications of new lecturer recruitment. To overcome bureaucratic hurdles that hinder the recruitment of new lecturers, the government currently employs contract lecturers under the NIDK (Special Lecturer Identification Number) and P3K (Government Employee with Work Agreement) schemes. Moreover, to improve the quality of Indonesian university faculty members, the government recently introduced three scholarship programmes. These are the Domestic Postgraduate Education Scholarship (BPP-DN) for 1,000 lecturers, Affirmation Scholarships for New State Universities (PTNB) for 150 lecturers and Master Towards Doctoral Education Scholarship Programme for Excellent Undergraduate (PMDSU) for 250 lecturers.
BPP-DN is awarded to lecturers who plan to undertake a doctorate degree. Meanwhile, PTNB is for lecturers who already have a National Lecturer Identification Number (NIDN) or National Educator Identification Number (NUPN). PMDSU is awarded to fresh graduates who meet the qualifications to take a doctorate degree and are able to write at least two research papers for publication in international journals. Each recipient will receive a research grant that ranges from 50 to 60 million IDR per year.
In 2017, no less than 52 lecturers received graduate scholarships to study abroad and 817 lecturers received the same to study at national universities. Furthermore, 965 lecturers were also awarded postgraduate scholarships to study abroad and 8,488 lecturers received the same to study at national universities.
In addition to lecturers, the number of researchers in Southeast Asia's largest economy is also low. In 2016, Indonesia's researcher ratio was only 1,071 per one million of the population; far below Malaysia and Singapore with 2,590 and 7,000 per one million of the population (See Making Research & Development Part of Indonesia’s Vision for Growth).
The lack of researchers has resulted in a low number of international scientific publications by Indonesian scientists and scholars. As of 31st December 2017, the number of scientific papers written by Indonesian lecturers and researchers published in international publications stood at only 16,147.
In 2018, the government allocated a research fund 2.45 trillion IDR, an increase compared to that in 2017 which equated to 2.1 trillion IDR. In addition, the government also established a research consortium scheme involving relevant industry bodies that cater to market needs.
Under this scheme, the research will focus on a number of priority sectors such as food, health, and transportation. By partnering with industry players, it should be easier to secure funding and the outcome of the research can also be quickly implemented which will benefit the researchers, the industry, the government, and consumers (See Opportunities for Research Collaboration in Indonesia).
Furthermore, to improve the quality of local universities, the government has been encouraging reputable, foreign universities to open branches in Indonesia or team up with local universities. Many campuses have partnered with foreign universities through lecturer and student exchanges, grants and scholarships, dual degree programmes, joint research, training, and publications.
Technically, foreign universities have been able to open branches in the country since 2016 (See Indonesia’s Higher Education Act 2012). To encourage these universities, the government has deregulated a number of impending regulations and plans to introduce fiscal incentives in the form of tax holidays and allowances. Yet, there are numerous restrictions which limit the attractiveness and commercialisation of the local tertiary education sector for foreign universities such as restricting the proportion of foreign faculty to 40%, and the need to operate on a not-for-profit basis (See After the 2012 Higher Education Act; Where are the Foreign Universities?).
Another innovative program that has been introduced to improve the quality of local universities in Indonesia is the "7 in 1" programme. This is financial aid to improve college infrastructure and facilities in collaboration with the Islamic Development Bank (IDB). IDB is providing funding of 2.7 trillion IDR to help seven universities improve their buildings and facilities. These universities are the Sam Ratulangi University (Unsrat), Surabaya State University (Unesa), Yogyakarta State University (UNY), Gorontalo State University (UNG), Lambung Mangkurat University (UNLAM), Tanjungpura University (UNTAN), and Syiah Kuala University (Unsyiah).
Another big challenge faced by Indonesia's tertiary education sector is the low gross enrollment ratio (GER) of only 31.1% in 2017. This is far below Malaysia of 38%, Thailand of 54%, Singapore of 78%, and South Korea of 98.2%.
The Indonesian government has set a target to increase GER to 75% by 2045. To achieve this, various scholarships are being made available to college students to help bright, disadvantaged students study at university. In 2017, 339,348 students received Bidikmisi scholarships to complete their undergraduate studies.
Moreover, to further increase the country's GER, 400 state and private universities will be authorised to offer online courses in 2018. Priority will be given to universities with adequate infrastructure (See Indonesia and the Internet; Online & On the Move).
Under this breakthrough policy, 50% of the course will be completed online. This will dramatically increase the number of students as online courses will allow one lecturer to teach hundreds of students and is a promising solution to logistics challenges posed by Indonesia’s archipelagic geography.
The demand for high-quality tertiary educational services in Indonesia will continue to grow in the foreseeable future as 43% of the country’s population are below 25 years old and the middle-class population is expected to double to 140 million by 2030.
Going forward, e-education is expected to grow faster to keep pace with changes in lifestyle and the advance of technology. Currently, Indonesia has the fourth and third largest internet and smartphone users in the world at 78 million and 65.2 million respectively (See Mobile Apps in Indonesia Clicking into Gear). Although its adoption is currently still low, Ambient Insight predicts that Indonesia will soon become the third largest buyer of mobile learning services in the world which is expected to reach $12.2 billion USD in 2018 (See Indonesian Telecommunications – An Increasingly Mobile Market)
The Indonesian government's move to embrace this new trend by encouraging local universities to offer online courses will propel the growth of e-education in the future. This breakthrough is expected to benefit all parties involved, including Indonesian students, universities and the business sector.
Global Business Guide Indonesia - 2018
Number of Tertiary Education Institutions: 4,445 (2016)
Type: 91.5% Private, 8.5% Public
Students in Higher Education: 4,941,574 (2016)
Net Enrolment Rate in Tertiary Education: 22% (2014)
Relevant Law: Higher Education Law No. 12 of 2012 provides universities with the autonomy to set their own tuition fees and authorising the set up of foreign universities in partnership with Indonesian institutions.
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