(Bloomberg) -- Indonesia has made the greatest improvement among Asian countries in developing and harnessing talent over the past decade, according to a report by INSEAD.
Indonesia climbed 14 spots in the graduate business school’s Global Talent Competitiveness Index for 2019-2023 compared with the previous five-year period, making it the world’s second-biggest gainer after Albania’s 16-spot jump. Still, there’s more to be done for Southeast Asia’s largest economy that placed 75th out of 113 countries.
Rich nations dominate the global talent landscape — Switzerland has topped the table every year, followed by Singapore and the US — but developing countries like Indonesia have made the largest strides by improving quality of life and job sustainability.
Indonesia still lags in high-level skills required by knowledge workers in professional, managerial or leadership roles. Over 70% of its labor force are in low-paying sectors like farming and construction, according to a separate report by HSBC Holdings Plc. President Joko Widodo is betting on a downstreaming push to create jobs and upskill local workers.
“If Indonesia makes progress on increasing talent competitiveness, workers’ salaries and productivity, with such a large population, then it can reap that demographic dividend,” said Felipe Monteiro, academic director of the INSEAD index. “That creates this positive cycle of higher GDP, that attracts talent, which in turn drives even higher GDP.”
Its 270-million strong population, of which two-thirds are working age, holds the potential to unlock economic growth the way China’s did, he added.
Automation and artificial intelligence pose an opportunity for Indonesia to rapidly shift its workforce as there’s less legacy systems to hamper the reskilling. “When you have a major transformation like this, there’s always an opportunity for emerging markets to leapfrog,” Monteiro said.
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