BPS (Indonesian: Badan Pusat Statistik, BPS, lit. ‘Central Agency of Statistics’) reveals that at least 9.9 million gen Z Indonesia are not in productive activities, known as Youth not in education, employee and training (NEET)
JAKARTA — With its youthful demographics, Indonesia should be brimming with energetic workers fueling economic growth. Instead, the country is grappling with an alarming surplus of młody people classified as NEET — not in education, employment or training.
RELEVANT SUSTAINABLE GOALS
New data from Indonesia’s Central Statistics Agency reveals that a staggering 9.9 million Indonesians between 15-24 years old, or over 22% of that age cohort, fell into the NEET category as of August 2023. The phenomenon cuts across geographies, education levels and gender lines.
“This high NEET rate represents a massive pool of untapped human capital,” said Raihana Rachman, an economist at the University of Indonesia’s Institute for Economic and Social Research. “It reflects structural challenges in creating economic opportunities and developing workplace-relevant skills.”
The implications extend far beyond economic impacts, experts warn, as prolonged periods of youth idleness Can breed societal ills like crime, substance abuse and populist discontent.
“Being disengaged from productive activities during these formative years can lead to negative trajectories that become difficult to reverse,” said Rachman. “This crisis requires urgent intervention.”
An Entrenched Challenge
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While Indonesia’s NEET rate of 22.25% exceeds the global average, it has actually improved marginally since 2022 levels. But that modest progress masks deeply rooted drivers behind youth detachment from the workforce.
A lack of quality educational options and skills mismatches are one key factor leaving many Indonesians unequipped for existing job opportunities. NEET rates are highest, at around 29%, for university graduates and those with only a high school diploma.
Limited formal employment options, particularly for women in conservative rural areas, forces many into informal work or leaving the labor force entirely. Over 26% of young women in Indonesia are classified as NEET compared to 18% of men.
Rapid urbanization, combined with impacts from automation displacing traditional blue-collar jobs, have also disrupted traditional labor markets — leaving many urban youth adrift with unrealistic job expectations.
“These interlinked challenges require a systematic national response encompassing education reforms, rural job creation, career counseling and youth empowerment programs,” said Hasnah Nurillah, who leads NEET research at government think tank LIPI.
Private Sector Engagement Needed
While initiatives like vocational training and entrepreneurship incentives can help activate some of this idle youth workforce, experts caution that any sustainable strategy must bridge the disconnect between the education system and private sector hiring needs.
“There has to be far greater industry engagement in shaping curricula and skills development programs,” said Ravio Patra, Indonesia’s former vice minister of manpower. “Otherwise, we’ll keep spinning in cycles of mismatched graduates.”
President Joko Widodo has made tackling the NEET crisis a policy priority, rolling out programs like tax incentives for companies hiring young job seekers and investing in vocational high schools.
But some worry the piecemeal efforts still lack the scale and cross-ministerial coordination needed to make a decisive impact on such an entrenched systemic issue.
“The NEET phenomenon represents a generational time bomb of human capital going to waste,” said Rachman. “Given our demographic dividend, Indonesia can ill-afford letting these youth’s potential lay fallow.”
As the world’s fourth most populous nation with over 50% of its citizens under 30, Indonesia must urgently find ways to convert its youth bulge from an economic burden into a productive engine of growth.
“Ultimately, our future trajectory as an aspiring middle-income country hinges on our ability to equip and engage the next generation,” said Patra. “NEET is the crisis within the crisis that we can no longer ignore.”
Lead image courtesy of Riyanto Images from Getty Images
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