Page 9 - e-KLIPING KETENAGAKERJAAN 8 JANUARI 2020

competitiveness.

Airlangga said the government would provide "flexibility" for outsourcing foreign
workers working in Indonesian start-ups while also paying attention to the
development of domestic workers.

"A lot of our unicorn companies [start-ups valued at more than US$1 billion] are
outsourcing from Bangalore [India]. With more flexible regulations, we are hoping
that they could move to Indonesia," he said.

With the job creation omnibus bill, the government is also looking to bridge the
deeply rooted skills gap in the digital economy, with digital talent gaps of about
600,000 per year.

"Retraining and reskilling programs are part of a survival kit; this [600,000 talents]
is the size of the gap we need to fill as we need a coordinated effort to tackle the
talent deficit," said Gojek vice president of data science Syafri Bahar in a December
discussion organized by The Jakarta Post.

Contacted separately, Indonesian E-Commerce Association (idEA) chairman Ignatius
Untung said foreign workers in Indonesian start-ups only comprised about less than
5 percent of all employees in a company.

"There are start-ups that employ foreigners because they need specific skillsets that
Indonesians lack, such as pertaining to artificial intelligence. However, there are also
companies that employ foreigners [simply] because they need more qualified
workers," he told the Post in a phone interview.

Ignatius welcomed the government's decision to simplify the bureaucratic process of
recruiting foreign workers. However, he said the government should also push for
tighter selection in a bid to reduce unemployment.

Indonesia's open unemployment rate slightly dropped to 5.01 percent in February
2019 from 5.13 percent the previous year, according to Statistics Indonesia.
However, the highest unemployment rate was recorded by vocational school
graduates, even though the education system was meant to prepare students for
real employment upon graduation.

"We should make sure that every company looks at the labor market before they
decide to hire foreigners. Once they have undertaken such a process and still do not
find what they are looking for, they should be allowed to hire foreigners," Ignatius
added.

A McKinsey & Company report titled Automation and the Future of Work in
Indonesia found that 23 million jobs could be displaced by automation by 2030, but
27 million to 46 million new jobs could be created in the same period if Indonesians
learned new skills.

Page 8 of 74.