The 2nd International Conference on Elementary Education

Volume 2 Nomor 1, ISBN 978-623-7776-07-9

ICEE-2
Strategy for Enhancing Quality of Labor through Technical
Vocational Education & Training Faces Industry 4.0 Challenges
Yeni Nuraeni1, Yuniarti Tri Suwadji2

1,2, Research
and Development Center, the Ministry of Manpower, Jakarta, of Indonesia
 [email protected],  [email protected]

Abstract. The field of Indonesian Manpower, the low competence of manpower makes it
increasingly difficult for workers to find work. Vocational education which is more oriented on
expertise and mastery of practice can be a solution to reduce unemployment and prepare
workers in the Era of the Industrial Revolution 4.0 and global labor market competition. This
study aims to analyze the readiness of the Indonesian government in improving the quality of
human resources through technical vocational education and training. The research method
used is descriptive qualitative. Primary data collection is done through FGD mechanism and
questionnaire distribution. From the results of the study it can be concluded, reforms need to
be made to the technical vocational education & training system, among them; relating to
the provision of infrastructure and equipment to support the use of industry 4.0 technology,
the creation of Vocational high School that have advantages and graduates needed by the
labor market, avoiding overlaps between vocational high School, vocational training center
and polytechnic, and the empowerment of associations, industry and society in improving the
vocational system. Improvements to the technical vocational education & training system
need to be supported by a sustainable funding system including through the Unemployment
Benefit and Skill Development Fund.

Keywords: Technical Vocational Education & Training, Workforce Quality Improvement,

Industrial Revolution 4.0, Unemployment Benefit, Skill Development Fund

INTRODUCTION In 2017, the majority of largest employment rate in the community

Indonesia's population worked in the is dominated by people with low
informal sector at 50.64% (BPS, 2017). education (BPS, 2017). Indonesia is in the
Informal workers in general have not 10th position of ASEAN countries when
received adequate social protection and viewed from the perspective of high skilled
employment so that they are included in employment share and ranks third lowest
the category of vulnerable workers (Infid, for medium skill employment (WEF, 2018).
2018). The Indonesian workforce is 60% Human Capital Index in ASEAN countries
junior high school and below, so the can be seen in Figure 1.

Figure 1. Human Capital Index, High Skilled and Medium Skilled Employment ShareSource :
Word Economic Form 2018

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The biggest unemployment rate in high to the unemployment rate, even
Indonesia when viewed based on though the graduates have been
education level, the biggest contribution is prepared as workers who can be directly
Public High School. Senior secondary absorbed by the labor market (BPS, 2016).
education that focuses on skills, namely The level of unemployment for each level
Vocational High Schools, also contributes of education can be seen in Figure 2:

Figure 2. Unemployment Rate Based on Education Level in Indonesia 2016Sumber :

Coordinating Ministry for Economic Affairs

Projections going forward with the 4.0 To prepare workers to enter employment in
industrial revolution, there will be a need the formal sector, it turns out that formal
for new workers who are growing rapidly. education is not enough, so they finally
This is an opportunity as well as a threat to can only enter the informal sector.
Indonesia's young workforce to get decent vocational and Education training are
jobs. With the demographic bonus that will needed to fill the gap in formal education
be experienced by Indonesia in 2030, it in Indonesia. Graduates of vocational and
provides an opportunity for the Indonesian education training have not yet to meet
government to build a better welfare. The the job market. This is due to the absence
obstacle faced by Indonesia is that the of a mechanism for direct work placement
level of education of the people is still low or apprenticeship after completing
and unskilled. This is due to the quantity vocational and education training (Infid,
and quality of education in Indonesia is still 2018).
low. The quality of education graduates in
The Government of Indonesia has created
Indonesia has not met the needs of the
a Vocational and Education Training
workforce and the business world, so that
Roadmap for 2017-2025 as an effort to
many industries find it difficult to get a
overcome the not yet achieved link and
competent workforce in accordance with
match between Vocational and
technological developments.
education training outputs with industry
needs. This study aims to analyze the

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ICEE-2
efforts of the Indonesian government in In various literatures related to education,
preparing the quality of human resources the term TVET is often found, which stands
in the industrial revolution 4.0 through for Technical and Vocational Education
Vocational and Education Training. and Training. The purpose of Education
and Training is the occurrence of behavior
Previous studies relating to the analysis of
changes in the direction that is in
Technical Vocational and Education
accordance with the wishes. From specific
Training (TVET) conditions in Indonesia
objectives, both have differences in terms
have not yet discussed the government's
of achievement. Education is more
strategy to be able to manage TVET in an
directed towards general and less tangible
integrated manner through the Skill
knowledge, while training is more directed
Development Fund and Unemployment
towards specific and more tangible
Benefit funding system. This research is
behavioral skills. It can be concluded that
more focused on an analysis of the
training is part of a more specific
readiness of the Indonesian government in
education. The technical education is an
carrying out the 2017-2025 Vocational
educational program that aims to prepare
Education and Training Roodmap along
workers at the technician or sub-
with the opportunities and challenges
professional level one level above the
faced.
craftsman but below the professional.

METHOD Vocational education is an education

program to prepare workers at the
The research was carried out through
craftsman or company level at the primary
theoretical and empirical studies of
level. In TVET education and training run in
relevant research references and results,
rhythm where TVET is education and
and continued through Forum Group
training which aims to prepare the
Discussion/(FGD (Supari, Nita, et all, 2019).
workforce according to the needs and
The research method is qualitative with
demands of employment in this case is the
data collection techniques through in-
business and industrial world that is link and
depth interview methods, observation
match (Unung, Jalius, 2018).
methods, document methods. (Spradley,
James P. 1979). Presentation and analysis Guided by the National Education System

of data is done through the stages of Law No 20/2013 Article 14; there are the

description, analysis, and interpretation terms "Vocational Education" and

(Creswell, John W. 2013). "Technical Educational". The purpose of
vocational education, which is secondary
RESULTS AND DISCUSSION education, is to prepare students to work
Concept (TVET) and Perspectives on in certain fields. Technical Education which
Education in Indonesia 21st Century is a higher education aims to prepare
students to have certain occupations and

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ICEE-2
areas of expertise equivalent to a referred to in one term, namely Vocational
bachelor's program. Based on the Education. The position of vocational
definition from UNEVOC, vocational education and technical education can
education and technical education are be seen in Figure 3.

Figure 3. Indonesian Education Scheme in Perspective UNEVOC

In general the main objective of TVET is to associated with employment calculations
prepare a skilled workforce. In Indonesia, and economic growth (Waras, 2017).
the term vocational education is used for Through TVET, prospective workers are
secondary education, such as vocational guided as well as being equipped with
education/SMK and technical education knowledge and skills so that prospective
for higher education such as the scope of workers can become workers who have
academies, colleges, polytechnics, strong identity of work and have high order
institutes, and universities. Legally it can be thinking skills.
seen in the Law on the National Education
Working in the industry is in a different
System (Sisdiknas) Number 20 of 2003.
environment from the school environment.
Article 15 of the National Education System
Development of soft skills for the long term
Law (Unung, Jalius, 2018).
includes the development of mental
Mainstream TVET in the world generally endurance, work discipline, scales
rests on the definition of jobs in the business endurance, and positive behavior of
and industrial world (DUDI). Thus, in students / residents learning. While the
general, talking about technical learning short-term goals include: developing
and vocational education is always insight into work in the industry (Suharno,

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ICEE-2
Kamsidjo, et al 2017). Vision of TVET XXI able to become entrepreneurs. TVET's
Century is the development of technical learning strategy needs to be more flexible
and vocational education and training for and innovative so that it can give birth to a
all communities, lifelong learning, creating competent human resource where
welfare equality and equity, alleviating competency acquisition has three main
poverty & unemployment, increasing elements namely 70% experience, 20%
career, strengthening sustainable training and 10% education (Moedjiman,
development (Putu, 2016). According to 2018). The process of acquisition of
Sudira (2018), the XXI century workforce competencies and the path to improving
must be prepared to be ready to work, the quality of human resources can be
able to improve the quality of production seen in Figure 4
and services in the world of work and be

Figure 4. The Process Of Acquiring Competencies And Improving The Quality Of

Human Resources
Resources (Moedjiman, 2018)

According to Trilling & Fadel (2009) XXI and accountability, leadership and
Century competencies include; learning responsibility. Multi competencies and
and innovation skills consist of mastering knowledge in the XXI century and the
diverse knowledge and skills, critical industrial era 4.0 needed must be
thinking and problem solving, integrated into the vocational and
communication and collaboration in vocational education elements.
collaboration, and creativity and Government policies for the revitalization
innovation, digital literacy skills namely of vocational education and vocational
information literacy, media literacy, and education in Indonesia must include the
ICT literacy, career and life skills consisting Industrial Era Vocational Education
of flexibility and adaptability, initiative, Chronosystem 4.0 which includes, learning
social and cultural interaction, productivity systems, education units, students, and

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ICEE-2
educators and education personnel In facing the development of automation
(Muhamad Yahya, 2018). Vocational and trends, good human resource planning is
vocational education can play a maximal needed, including for vocational
role in economic development if harmony education graduates as a basis for the
is pursued with the world of work around it, development of Vocational Education
both in terms of quantity, quality, location, (SMK), Vocational Training Centers (BLK),
and time. Vocational education and and Polytechnics. The development of
vocational education will also play a vocational education itself must be based
maximum role in economic development on the needs of the industry in the future
if they are able to integrate their programs which will certainly be influenced by the
with the existence of regulations, policies, level of economic growth and also the
planning, and government budgeting in different levels of automation in each
the era of regional autonomy as it is today industry.
(Slamet, 2011).
The trade, restaurants and
Absorption of Vocational Workforce & accommodation sectors along with
Prediction of Workforce Competency Community, Social and Individual Services
Needs in the Industrial 4.0 are the two sectors that have experienced
increased absorption of vocational
TVET is an education that is focused on
graduates. On the other hand, although
preparing and equipping graduates to be
the agricultural sector remains the largest
immediately ready to work according to
absorber of vocational graduates, in the
the type of field of expertise. However,
past 10 years there has been a decline in
there is still an assumption that vocational
absorption from this sector. The highest
education is considered as second class
growth of the industrial sector per year in
causing limited development of
the 2016-2025 period is estimated to be in
vocational education in Indonesia. The
the health industry sector (14.49%), IT
presumption that is developing at this time
(12.74%), and telecommunications services
is that the condition of vocational
(10.15%). This is driven by various factors
education in Indonesia is still unable to be
such as demographic developments,
aligned with countries with advanced
community incomes, and also trends in
vocational education such as Germany or
automation and digitalization. The
Singapore because of the limited access
digitalization factor will be a key factor in
and quality of vocational education in
changing the competency needs of the
Indonesia. In fact, vocational education
workforce. The 4.0 Industrial Revolution
provides practical competency training in
driven by information technology will
preparing graduates to be ready to work
create a lot of new competency needs
immediately and immediately absorbed in
from the workforce. However, this
the labor market.

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development will also eliminate the type of The level of automation in Indonesia is still
work currently replaced by automation. quite low compared to other countries,
and is expected to increase and reach its
The more diverse competencies needed in
peak in the next 20 years. The highest level
the future, companies will also recruit
of automation risk for vocational
candidates who are considered to have
graduates is in the financial services
expertise even if only armed with self-
industry (69%), consumer staples (68%),
directed learning online. Going forward,
and consumer discretionary (55%) due to
online courses will increasingly progress
routine and repetitive types of work. The
with the development of augmented
industrial sector with the highest increase in
reality (AR), virtual reality (VR) and artificial
vocational graduate employment needs
intelligence (AI). Although university
in the future is the Information Technology
degrees still continue to play a large role
industry sector (11.5%) and the health
after 2025, more employers will receive
industry (11.3%) due to the high potential
alternative qualification systems as each
for industrial improvement and also a
candidate changes their assessment and
relatively low degree of automation. The
online self-directed learning options
projection of the level of automation in
develop.
Indonesia by sector can be seen in the
figure 5.

Figure 5. Projected Risk Level of Automation of Vocational Graduates by Industrial Sector

Source : McKinsey Global Institute
TVET Development Strategy in Indonesia the Indonesian National Qualification
Framework (KKNI). Vocational students
The government has prepared the 2017-
must be prepared to face the real jobs
2025 Vocational Education and Training
that exist in the business and industrial
Roadmap. In the roadmap the policy
world. Polytechnic to prepare workforce
focus is wrong on vocational education
education for higher level thinking and
and training institutions. Vocational High
white collar jobs. As well as the Vocational
School (SMK) is intended to prepare
Training Center (BLK) to prepare workforce
workforce education level 2 operators of

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training for those who need short-term skills quality of apprenticeship, increasing
as well as upskilling and reskilling for those facilities & infrastructure, increasing
affected by automation and critical funding, and increasing coordination. To
economy. The focus of the policy is the achieve the goal of fundamental
fundamental improvement of vocational improvement, it is necessary to harmonize
education and training which includes between academic, business and
improving educational institutions, raising government as shown in Figure 6.
competency standards, increasing the

Figure 6. Harmonization in the Framework of TVET Fundamental Improvement

Sumber : (Paristiyanti, 2016)
The learning system on TVET must be in provides theoretical and background
accordance with the needs of knowledge as well as reflections from work
employment so that it can increase experience learning. Ideally, learning is
graduates' absorption rates and work arranged directly in the work process
productivity in the industry. Employment (Joachim, 2010).
productivity will be able to increase
Based on the 2017 Global Talent
economic growth, economic growth will
Competitiveness Index, Indonesia has a
eventually be able to expand and open
good rating (ranked 65) in terms of
new jobs. The application of the Dual
Vocational and Technical Skills. With this
Training System, as in Germany, features
position, Indonesia has the potential to get
around 70% learning in companies and
maximum results if fundamental
30% learning in vocational schools. The
improvements are made to the quality
actual training takes place at the
and vocational education system. Based
company while the vocational school
on a survey conducted by INSEAD on the

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ICEE-2
Global Talent Competitiveness Index indicator of the population level with
which can be seen in the figure 7, it was secondary education (ranked 65)
found that: where 22.44% of the population in
Indonesia has secondary education.
- Mid-level skill (vocational) in Indonesia
However, indicators of labor
turns out to be far better than 5 other
productivity and availability of
fields, namely; Enable, Attract, Grow,
technicians and associate
Retain & High Level Skills (Global Skills)
professionals are ranked low (rank 76
- Indonesia is ranked 93 out of 118
& rank 89). From this it follows that the
countries in terms of expertise at the
majority of vocational education
mid-level skills (vocational) level.
graduates actually occupy low-level
Indonesia scores quite well on the
positions

Figure 7. Ranking of Indonesian Indicators on the Global Talent Competitiveness Index 2017

To improve the quality of vocations in the challenges facing developing countries to

face of the Industrial Revolution Era 4.0, increase the effectiveness of TVET include;
TVET revitalization is needed in Indonesia lack of funds for the supply of physical
through; Curriculum revision, preparation infrastructure and equipment, lack of
of teaching staff from industry, trained instructors, difficulty in
implementation of dual system 3-2-1, communication and coordination and
construction of teaching factory, retooling inadequate ICT infrastructure (Mel, 2012).
and certification of vocational program The seven pillars of vocational system
teachers and Vocational Graduate reform in Indonesia can be seen in Figure
Certificate (Muhamad Nasir, 2018). The 8.

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Figure 8. TVET Reform in Indonesia

On the seventh pillar, the parties expected unions have been an important actor in
to be involved in vocational the development of worker quality (infid,
empowerment are associations, industry 2018). TVET's revitalization strategy in
and society, not trade unions. This choice is Indonesia can be seen in Figure 9.
worthy of correction, because trade

Figure 9. Revitalization of TVET In Indonesia

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Vocational Education Revitalization The establishment of new polytechnics
must be endeavored to improve the
The urgency of revitalization of vocational
capacity as well as the quality of human
education is driven by conditions where
resources. If not, then the demographic
each year there are around 3.3 million
bonus they have will not be optimal in their
students graduating from high school /
contribution. Productive age population
vocational school, while the capacity of
with low education and skills can be
tertiary institutions is only around 60-65%. So
predicted to have low productivity. In
the rest of the graduates are forced to
addition, they mostly work in low-income
fight over the graduates of the Polytechnic
sectors. Revitalization of vocational
and tertiary institutions to enter the job
education aims to improve the quality and
market. That is why the workforce profile
competitiveness of human resources,
has not experienced significant changes
especially the creation of skilled workers to
over the past 10 years. The industrial
meet the needs of industry and the
revolution 4.0 narrowed technical
implementation of development.
employment, for example a shoe factory 5
Vocational Education revitalization
years ago operating with 20 thousand
strategies can be seen in the figure 10.
employees, now only 12 thousand
employees are left because some jobs
can be done automatized.

Figure 10, Revitalization Strategy For Development Of Vocational Education

Revitalization of Polytechnic / Technical Based on BPS data, the educated

Educational unemployment rate originating from

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universities and diplomas in Indonesia is still - Problem Base Learning; has been
quite high at 13%. As many as 59% of introducing since 2012 to regional
polytechnic study programs are still polytechnics
accredited under B, while the industrial - Co-operative; (3-2-1 and 2-1-2-1) has
world mostly applies study program been introducing since 2000 by Polman
accreditation standards, so that many Bandung
polytechnic graduates will not be
The polytechnic revitalization program is
absorbed into the labor market. To
one of the efforts made by the central
improve the quality of polytechnics in
government to build a better polytechnic
Indonesia, there are a number of things
program. In addition to the challenges of
that are the main focus. First, polytechnics
each program's governance and
must have lecturers from industry,
resources. One of the problems faced is
polytechnic programs must implement
the lack of industry lecturers in polytechnic
teaching factories, and broader
education. The requirements to become a
development needs for vocational
lecturer are regulated in Law No. 14 of
programs at the master and doctoral level
2005 concerning teachers and lecturers in
are applied.
article 46 paragraph 2 states that to be a
The dual system that has been lecturer, a minimum must meet the
implemented in Germany is the right minimum qualifications of graduate master
choice for implementing a teaching programs for diploma or undergraduate
factory. The advantages of implementing programs. This regulation makes it
a dual system include; industry can help in increasingly difficult to meet the needs of
transferring knowledge and skills to learners lecturers from the industrial side, especially
and bring the skills level of learners up to for polytechnic programs
standards requared from the industries,
In TVET reforms that need attention is the
and industry is expected to develop
willingness of competent teaching staff.
graduates capacity in problem solving
TVET teaching staff is different from general
and working abilities (plus professional
education teaching staff, they must have
skills). The dual system has been
the ability to prepare students to be able
implemented in several polytechnics with
to make a living in the workforce and
various schemes, namely:
provide professional knowledge and
- Production based learning has already professional competencies needed in
been implemented by ATMI Surakarta, certain jobs (Joachim, 2010). The teaching
Polman Bandung, Polman Astra, ATS staff at TVET must be able to work within
Sorowako, Polman Babel the framework of a cooperative system of
vocational education and training, where
companies and vocational schools share

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the responsibility for carrying out it can encourage the volume and scale of
education and training to students. TVET training and apprenticeship scale. The
teaching staff are obliged to work government must be able to encourage
intensively with their partners, namely the participation of private and industrial
human resources development staff in the providers to be able to strengthen the
company. In addition, student assessment quality of vocational training and
for the final certificate is in the hands of education through modernization and
industry and trade associations (Kadin). revitalization of Vocational Training
Centers (BLK), Vocational Schools (SMK),
Another problem is the lack of applied
Private Training Institutions (LPKS) &
teaching factory systems. To implement
Polytechnics.
this mechanism, polytechnics are required
to build cooperation with industrial The main principle in the development of
partners so that students can not only SDFs in Indonesia is that the state is present
practice in polytechnic laboratories, but through contributions from state budget
also in direct companies. In Indonesia, only funds so that it can provide funds on an
a few polytechnics open programs for ongoing basis, not all funds are spent. SDF
master and doctoral degrees, so that it is mutual cooperation through
becomes a challenge in creating the government and industry partnerships, so it
qualifications of workers who have higher is expected not to add to the burden of
levels of education in the field of applied industrial costs (labor cost). Referring to the
sciences. In addition to the challenges of learning of countries that have successfully
governance and resources of each implemented the SDF, there is a linkage
vocational program in Indonesia, the and synergy between the SDF and the
growing risk of automation certainly adds Unemployment Benefit. The concept of
pressure on the workforce, especially Unemployment Benefit / Temporary
graduates in the vocational field. Employment Guarantee for workers who
Therefore it is necessary to plan carefully have been laid off through investment in
related to the development and vocational education / Skill Development
distribution of vocational in Indonesia. Fund as a means to provide skills
according to the needs of industry and
The concept of TVET Financing through the
income support in the form of cash
Skill Development Fund (SDF) and
benefits as a social cushion during training
Unemployment Benefit (UB)
programs. The role of SDF and UB

To improve access and quality of TVET in development in solving problems of

Indonesia, it is necessary to collect and developing the skills of workers in Indonesia

provide long-term learning funds. With the can be seen in Figure 11.

availability of a sustainable funding system,

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Figure 11. Problem Solving the Provision of Competent Workers through the SDF and UB

To prevent overlaps in the issue of TVET skills and middle skills where the condition
funding, education and training programs of the Indonesian workforce is 60%
funded through SDF do not include elementary, junior high and vocational
education and training programs that high school (BPS, 2017). The main types of
have been funded by ministries such as training programs that will be supported by
vocational high schools (SMK), SDF are primarily job training,
Polytechnics as well as non-academic apprenticeship, certification, instructor
educational programs such as the S-1, S -2 strengthening, and vocational
and the like. The support for SMKs such as scholarships. There is a development and
instructor training, curriculum expansion of employment social security
development, collaboration with benefits which will include compensation
polytechnics and certification processes for seeking work, returning to work and
can be funded through SDF. training allowances.

In contrast to the education and training Road map for SDF implementation in
programs that have been carried out Indonesia must be carried out in stages;
through LPDP, SDF relates to vocational The first five years are targeted at 1-2
non-degree and academic, universal for million training and 1 million apprenticeship
all citizens. SDF aims to serve and with a target to strengthen the millennial
strengthen the capacity of providers youth workforce that is still working, who
including industry, BLK, LPKS and SMK. The are laid off and who will be working / pre
main target of the SDF is to strengthen low employment. The road map for the

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provision of SDF funds is also carried out in and trade unions) to ensure the
stages; the first five years through APBN implementation of diologues and
and LPDP funds and through the sustainable social partnerships, so as to
relocation of JKK and JKM funds in TK BPJS, encourage Indonesian workers to be more
industry dues began in year 3. To create productive and competitive. Steps that
sustainable social security for employment can be taken by the government, industry
it is necessary to increase development and other stakeholders in an effort to
and implementation by involving tripartite improve the skills and competence of the
participation (government, entrepreneurs, workforce can be seen in Figure 12.

Figure 12. Steps that can be taken by the government, industry and other stakeholders in an
effort to improve the skills and competencies of the workforce

CONCLUSION The TVET development policy

recommendations in Indonesia are as
Key Elements of TVET's success in Indonesia
follows:
include; building a Vocational Training
system, establishing standards, - Improvement of curriculum in
implementing Vocational Training and vocational education. The
assessment & certification. The quality of development of vocational curriculum
the training program is demonstrated by must be aligned with the demands of
the level of success of the certification, as the Industrial and Business World (DUDI)
well as the proven effectiveness of the with three main criteria, namely labor
success of graduates in working and have market demand (de mand-driven), the
added value after practicing. relationship between employers
(industry) with vocational education
institutions (links) and compatibility

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between graduates vocation with widely available today, the vocational
employer / industry (match). Vocational sector requires a platform that is
graduates must obtain certification for collaborated between industry,
each competency that has been associations and vocational education
fulfilled so that vocational graduates institutions to provide information on
can have more than one competency what sectors are looking for workers
certificate. and what types of jobs are needed.
- The fulfillment of productive lecturers by
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