Indonesia’s growing middle class expected to drive outbound mobility

Short on time? Here are the highlights:

  • Outbound mobility from Indonesia has grown by 35% over the past decade
  • Nearly 42,000 Indonesians were enrolled in higher education abroad in 2016, with a significant additional number of students engaged in VET and language studies
  • The leading destinations for Indonesians are Australia, the US, and Malaysia

With more than 263 million people, Indonesia is the world’s fourth most-populous country. It is also the world’s largest Muslim-majority country with nearly nine in ten inhabitants identifying as Muslim.

The population is young. The median age is just over 28 and nearly half of all Indonesians are under the age of 30. In fact, those aged 15-29 make up a third of Indonesia’s workforce; however, youth unemployment is high and two million people enter the Indonesian labour market every year.

Even so, Indonesia is also home to a growing middle class. The country’s affluent consumer classes are expected to double in size – from 74 million to 141 million – by 2020.

Currently the 16th-largest economy in the world, Indonesia aims to move up to become a top ten economy by 2030, and it is poised to do so as a member of The Association of Southeast Asian Nations. ASEAN is a political and economic group of ten Southeast Asian countries whose economic growth and large college-aged populations have them firmly on the radar of international educators the world over.

The ASEAN Free Trade Area represents a huge opportunity, but Indonesia’s workforce is currently at a disadvantage. University graduates compose only 7% of its total (compared to 21% in Malaysia, for example), and the World Bank recently found that that the number of Indonesians with tertiary degrees will need to triple if the country is to meet its economic potential. The Indonesian government is investing heavily in vocational training and increasingly partnering with international schools to deliver it. But the higher education system is uneven in terms of quality and securing a place at one of Indonesia’s better universities is very competitive. Among Indonesia’s growing number of middle and upper class families, study abroad is widely considered to be the best way to secure a good job.

Trends in outbound mobility

UNESO reports that the number of Indonesian students pursuing higher education abroad is now nearly 42,000, and up 35% from a decade ago. But total outbound figures are higher still, especially when vocational training (VET) and language training enrolments are factored in.

The top three destinations for Indonesian students are Australia, the US, and Malaysia. The US Commercial Service notes, “Australia is the number one choice for Indonesians abroad, largely due to geographic proximity, perceived institutional quality, and English-medium instruction…The [majority of students are enrolled] in higher education and vocational education and training (VET) [and with] strong growth in hospitality (36%), science, technology, engineering, and mathematics (14%).”

The latest Australian statistics indicate that there were just under 20,000 Indonesian students enrolled in the country in 2016, with annual growth on the order of 6-7%. In the US, meanwhile, there are nearly 9,000 Indonesians enrolled in higher education alone, with year-over-year growth again between 6–7%.

Outbound growth is being driven in part by an expansion of scholarship opportunities for Indonesian students. The Indonesia Endowment Fund for Education supports students pursuing master’s and doctoral degrees in Indonesia and abroad. Its funding rose from US$105 million in 2016 to US$225 million in 2017. This reflects a growing field of scholarships for Indonesians in general – in part because of an increasing focus on the part of international recruiters. “Education in Indonesia is getting more expensive,” agrees Sugito Shia of the education agency Go Global Way. “Many overseas institutions are offering generous scholarships for Indonesian international students.”

Recruiting tips

We recently conducted a survey of experienced Indonesian agents. Their responses highlight that the following are trending toward greater popularity this year:

  • Destinations: Australia, the US, the UK, Singapore, and Malaysia;
  • Levels of study: undergraduate, post-graduate, and vocational training;
  • Fields of study: business, hospitality, and STEM studies;
  • Pathway programmes and English-language learning opportunities;
  • Safety, high rankings/reputation of institution and programmes, proximity.

The same agent survey provides the following tips for overseas recruiters:

  • Get on the ground. Indonesian culture varies greatly according to region and city.
  • Make it real. Offer a one-day course or a workshop for students so they become engaged and get a sense of what you offer.
  • Link education to concrete skills. Students will want information on internships and assurance that their degree directly relates to their employment goals.
  • Work closely with agents. Trust, integrity, and word-of-mouth are enormously important to Indonesians. Students turn to agents for advice on destinations and institutions.
  • Understand the strong family ties present in Indonesian culture. Many families look for destinations that are close to home. If they consider more far-flung options, they will want every guarantee possible that their children will be well cared for and safe.
  • Keep in touch with students’ parents. Indonesian parents see themselves as stakeholders in their children’s education. Some schools set up Family Programmes with parents in mind, offering newsletters and invitations to school events in the home country to encourage a sense of participation … and positive word of mouth.
  • Respect religious customs. Indonesia is a Muslim-majority country. Families will want to feel that students are safe and welcome regardless of religion and race and able to comfortably pray on campus.

For additional background, please see:



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