A worker carries his lunch as he walks past an advertisement of an apartment at Sudirman Business District in Jakarta in this October 2015 file photo. (Reuters Photo/Beawiharta)

Indonesia's Skilled-Labor Shortage Hinders Foreign Investment: Business Sweden


OCTOBER 04, 2017

Jakarta. Anders Wickberg, Business Sweden trade commissioner to Indonesia, said an unreliable regulatory climate, lack of skilled labor and inadequate infrastructure are some of the obstacles hampering Swedish investment in the archipelago.

"New laws are introduced very fast, sometimes without the companies having the chance to adapt. This influences imports and exports, especially when the companies are trying to establish [themselves] here," Wickberg said during a press conference in Jakarta on Tuesday (03/10).

As the Swedish investment model not only seeks to export goods but also to establish companies in the target market, Wickberg said the lack of skilled labor in Indonesia often presents a challenge to businesses wishing to come to Indonesia.

"We believe foreign direct investment, especially from Sweden, will increase a lot of if there is more skilled Indonesian labor," Wickberg said.

Business Sweden is an organization jointly owned by the Swedish government and representatives of the country's business community.

Wickberg said Indonesian-Swedish cooperation in higher education has played an important role in facilitating the growth and expansion of Swedish businesses in the archipelago.

"There are many Swedish companies that want to grow and invest in Indonesia, and in order to do so, you need skilled labor, proper training and proper education for the population. We see great progress in that," Wickberg said.

Technology, Research and Higher Education Minister Muhammad Nasir and his Swedish counterpart, Helene Hellmark Knutsson, are expected to sign a memorandum of understanding on higher education, research and technology on Wednesday.

The MoU will seek to expand the possibilities of joint research between the two countries, while also strengthening cooperation in training, exchanges and capacity-building.

Relations between the two countries' private sectors will also be strengthened through the Indonesia-Sweden Executive Forum (ISEF) as business leaders from Sweden and Indonesia meet to discuss infrastructure, digitalization, health care and skills development.

Wickberg said the next year will see an increase in activities and dialogs through planned working groups and seminars between businesses.

"We will nourish this relationship and really take them to the next level," Wickberg added.

Urban Transportation and Smart-City Roadshow

Business Sweden plans to take Swedish companies on a roadshow around Indonesia in November, following the visit of Sweden's King Carl XVI Gustaf and Queen Silvia in May.

The program aims to open discussions with Indonesian stakeholders and give them an opportunity to showcase Swedish solutions on smart cities, technologies and urban transportation.

"This will be the first concrete deliverables and actions from the discussions we had when the king was here in May, on the issue of infrastructure – how can we work together to bring more investment and jobs to Indonesia," Wickberg said.

The roadshow will take place in several cities, including Jakarta, Bandung (West Java) and Makassar (South Sulawesi).