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The research was undertaken in collaboration with the Institute for Economic and Social Research – Faculty of Economics and Business of the University of Indonesia (LPEM FEB UI). The study integrates qualitative methods, secondary data analysis, and in-depth interviews with employers and workers from five electronics companies. It focuses on industry trends, automation, and digitalization to provide a holistic view of the sector’s needs from small businesses to large-scale industries.

“The government of Indonesia has selected electronics sector as one of the key industrial sectors to be developed to face the future of industrial development. The sector is part of the Making Indonesia 4.0 Road Map. Currently, the government is undertaking an initiative to foster the Indonesia’s semiconductor industry to be involved in the global supply chain. The study, therefore, will provide us with key findings and recommendations to continuously improving workers’ skills and competencies in this sector to not only increase the productivity, but also its contribution to the national economy and its employment capacity,” stated Deputy Minister Rudy Salahuddin.

The study highlights varying levels of technical and soft knowledge required for both high and low skill occupations: while operators need basic technical skills, engineers require advanced technical expertise, soft skills, and problem-solving abilities. Both groups must improve their digital literacy and adaptability to evolving technologies.

According to europa.eu, Digital transition In Germany is targeted with 52% of total Recovery and Resilience resources, divided between digitisation of public services (€3 billion) investments in microelectronics and communication technologies (€1.5 billion) and cloud infrastructures and service (€750 million). From a total budget of EUR 26.5 billion, more than 50% is allocated to digitalisation . The plan features two major multi-country important project of common European interest on digitalisation: Microelectronics and Communication Technologies, and Next Generation Cloud Infrastructure and Services.  

Investments relating to the Digitalisation of enterprises and the development and integration of advanced digital technologies are included in several measures. For the measure on building continuing education and training (CET) networks at least 200 additional businesses are expected to be actively involved in CET networks. 

Digitalisation of public services, accounting for more than 50% of digital investment under the plan, is supported by a number of measures in the ‘Modern public administration’ component. 

With the rapidly evolving business environment, developing a skilled and informed workforce is the most importatn for sustainable growth. ILO has the project on Skill development and responsile business conduct project, funded by the Government of Japan through the Ministry of Economy, Trade and Industry (METI), highlights the necessity of integrating responsible business practices with robust skills training. As industries, particularly electronics, undergo digital transformation and strive for sustainability, investing in human capital is even more critical.

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This approach ensures that workers are not only proficient in advanced technologies but also aware of responsible business practices, fostering a more inclusive and resilient supply chain. The collaboration between governments, enterprises, and educational institutions is essential to equip the workforce with the necessary skills and ethical standards to meet global supply chain demands effectively.

To bridge the skills gap, the study highlights the importance of private public partnerships between businesses and training institutions. Programmes like the Teaching Factory (TEFA) model and ‘Link and Match’ that align educational curricula with industry needs are listed as best practices ensuring graduates are able to transition to the jobs markets successfully.

The study also calls on enterprises to prioritize retaining workers and invest in their capabilities through reskilling and upskilling. Training institutions should also extend on-the-job learning opportunities to more people and strengthen industry partnerships to prepare graduates for the workforce effectively.

Simrin Singh, ILO Country Director for Indonesia and Timor-Leste, highlighted the timeliness of ILO’s support for Indonesia’s skills development programmes in response to the fast-paced industrial transitions and digital transformations facing the Indonesian labour market. “Investing in the skills and employability of women and men is a fundamental of a healthy labour market. The ILO’s collaboration with various institutions both public and private will certainly ensure a timely and accelerated development of a well-equipped, trained, and skilled workforce in this key sector. In turn, this investment in skilling is sure to improve productivity, quality, while ensuring the fundamental elements of decent work such as access to social protection and fair wages is guaranteed.”