JULY 2019 FORBES INDONESIA | 65NEWLY reelected Presi-
dent Joko Widodo has an-
nounced that his priorities
for the next five years are to
focus on human capital de-
velopment in Indonesia in
tandem with his successful
program of infrastructure
delivery during his first five-
year term. The dire need to
focus on the development of Indonesia’s human capital
is not new. In fact, the 15-year economic master plan
called MP3EI, launched in 2011 specifically earmarked
human capital development as one of the three pillars
that Indonesia needs to build to escape the so-called
middle-income-trap of a rapidly developing economy.
The good news is that demographically, Indonesia
is well endowed. With a population of over 260 million
people, its productive age group (those between 15 and
65 year old) ac-
counts for 65%
and as such, the
market segment
that will directly
benefit from a
successful hu-
man capital de-
velopment pro-
gram is readily
available. The key question though is how to incentiv-
ize the existing vocational training providers and tertia-
ry institutions like the Institute of Technology Bandung
(ITB) to multiply and open new ITBs across Indonesia.
One of the closest paradigms for expanding techni-
cal training institutions to meet the needs of a grow-
ing economy is in India, namely the Indian Institute of
Technology (IIT). IITs are now globally recognized
and award-winning technical tertiary institutions that
have multiplied to meet the human capital develop-
ment demands of India. The very first IIT campus
opened in Kharagpur, on the east coast of India in 1951.
Following its first convocation in 1956, the government
of India under the leadership of Nehru sought strate-
gic partnerships with foreign governments to establish
new IITs in the rest of the country. The second IITwas established in 1958 in the west, near Mumbai in
cooperation with the Russians, followed by the third
IIT in Kanpur in the central region in 1959, with the
help of the American government and the fourth in the
same year in the south in Madras (now Chennai) with
the help of the German government. Currently there
are 23 IITs across the country with the most recent
one opening in Dharwad in Karnataka in 2016. Each
of the IITs are autonomous tertiary institutions, gov-
erned by a common council where India’s Minister of
Human Resource Development is the ex-officio chair-
person of the IIT Council.
In contrast, in Indonesia the ITB, despite its pre-
eminence as a technical university, has not expanded
beyond its current facilities. While there are other
somewhat similar institutions elsewhere in the coun-
try, none has the eminence and the reputation in tech-
nical teaching as the ITB. Perhaps it’s time to explore
cloning new ITBs in other parts of the country and
given the re-
cent passage
of regulations
enabling the
establishment
of foreign uni-
versities in the
country, per-
haps the gov-
ernment should
explore how it can leverage the capabilities of the ITB
and other equally stellar foreign universities to open
branches in the country.
That said, such expansion would only address
the tertiary education sector. The more dire need for
Indonesia’s growth is in the vocational training sec-
tor. For this again there are suitable paradigms in our
regional neighbors that Indonesia can emulate. Ulti-
mately, what is required for a robust human capital de-
velopment program in Indonesia is the political cour-
age to establish 10 new ITBs. The government must
take the tough decisions to enable genuine partner-
ships between existing tertiary and vocational institu-
tions in Indonesia and foreign counterparts and seek
the support of multilateral and bilateral agencies as
India did, without fear or favor. FHUMAN CAPITAL DEVELOPMENT
- A CASE FOR 10 ITBS
DELIVERING INFRASTRUCTURE RAJ KANNAN
RAJ KANNAN IS A PARTNER AT DELOITTE CONSULTING SOUTHEAST ASIA AND AN EXECUTIVE DIRECTOR OF DELOITTE CONSULTING IN INDONESIA. HE HAS OVER 25 YEARS OF
EXPERIENCE IN TRANSACTING MAJOR INFRASTRUCTURE PROJECTS AS WELL AS ADVISING AND ASSISTING CORPORATIONS AND GOVERNMENTS IN INFRASTRUCTURE PROJECTS.
THE VIEWS EXPRESSED ARE PERSONAL AND NOT REFLECTIVE OF OR ATTRIBUTABLE TO DELOITTE OR ITS RELATED ENTITIES.
In fact, the 15-year economic master plan
called MP3EI, launched in 2011 specifically
earmarked human capital development as one
of the three pillars that Indonesia needs to
build to escape the so-called middle-income-
trap of a rapidly developing economy.