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EdTech in Indonesia: The Tip of The Iceberg

EdTech in Indonesia: The Tip of The Iceberg

Jokowi has a dream. In his 2019 inauguration speech, he spoke about Human Capital Development and Indonesia’s 2045 vision.

There are a couple of reasons why this is interesting. The first is because 2045 is when Indonesia turns one hundred, which in itself will be a landmark year. But 2045 is also the date to become “an advanced country with an annual income of Rp320 million per capita or a monthly income of Rp27 million per capital,” he said.

A lot of things have to happen for this dream to become a reality, but most observers would agree it’s heading in the right direction and it could actually happen if there’s an investment in Human Capital.

Developing Human Capital defines Human Capital as the “collective skills, knowledge, or other intangible assets of individuals that can be used to create economic value for the individuals, their employers, or their community.” That translates to education, but what exactly is that and what does it mean?

In 2016, Elon Musk said current educational systems were flawed as they basically focus on “downloading data and algorithms into your brain. It’s actually amazingly bad in conventional education because it’s more like a chore. The more you can gamify the process of learning, the better.

Does that mean we should make learning more fun? Or more relevant? Or both?

More than a year after schools across the country closed their doors and classes went online, maybe young Elon was prophetically right because education is definitely going through a paradigm shift with a lot of kids questioning the point of teaching “things” while ignoring the fundamental of “why” teach them in the first place. There’s also the question of learning social skills, which traditional schooling does and distance learning has yet to properly address.

Real-World Experiences

Maybe we need to find some kind of balance because there’s no doubt education is moving away from academic disciplines in dedicated bricks-and-mortar institutions into more practical and relevant real-world experiences. There are strong arguments to support the premise that COVID-19 has accelerated this trend.

This could be why Jokowi’s appointment of Gojek Founder, Nadiem Anwar Makarim, as Indonesia’s Education Minister is a significant step towards creating a more appropriate educational system for the 21st Century and one that’s better suited to dealing with such a diverse country as Indonesia.

Bloomberg suggests Makarim’s “experience in information and technology is also extremely useful in designing and adopting new digital systems… (to) contribute to developing an education system that generates high-quality and innovative research that tackles Indonesia’s most pressing issues.” And the Founder of GoJek knows all about successfully addressing pressing issues using digital solutions.

Public Private Partnerships

I was listening to a webinar last week on Investing in Indonesia’s Education by ASK Consulting and the Indonesia Education Forum. The big takeaway was a global investment in EdTech, or Educational Technology, has skyrocketed, but what’s interesting to look at is which sectors of education are getting the interest and, most importantly, the funding as it seems to be leaning more towards B2C consumer companies and corporate education, with a smaller percentage going to Kindergarten to Year-12 (K-12), very little to higher education and nothing to physical education.

This seems to underline the idea of education focusing on relevant skill sets to support Industry 4.0 rather than traditional academia, but how this becomes reality isn’t simply a question of wishing it to be so. In Indonesia’s case, this can only be done through Public Private Partnerships (PPP) and that’s where investment opportunities are enormous.

The Growth of EdTech

Ruangguru, Indonesia’s largest EdTech startup, which was founded in 2014, is a good case in point. According to Kr-Asia, they offer courses for school students but expanded into the professional market through a Skill Academy in September 2019 and managed to raise Rp150 million by the end of that year.

Ruangguru offers classes and courses on topics including entrepreneurship, communication, and investment strategy, among other skill lessons and has business owners and directors as mentors. As of December 2020, they have online courses for more than 100-subjects and more than 22 million users across the country, say Kr-Asia. That’s a big market and Ruangguru is not the only fish in the pond.

Other players in Indonesia’s EdTech market include Cakap, which “experienced a 3,000-percent increase in traffic during the first quarter of last year, compared to the same period in 2019, which was not only boosted by language lessons but also by new skill classes.”

Kr-Asia cites the World Bank as saying “EdTech platforms in Indonesia have seen a 200 percent growth in average in the number of active users and the number of app downloads in March 2020.” This is undoubtedly connected to COVID-19 and online schooling.

It’s clear from the ASK Consulting Investing in Indonesia Education webinar that the success of EdTech in Indonesia depends on the PPP model, where the government provides the infrastructure and the private sector runs the business under an agreed framework and on developing systems and meaningful incentives for teachers.

Channel News Asia says, “to realise Jokowi’s vision, his administration will spend around US$36 billion for education in 2020, according to a state budget proposal released in mid-August.”

The Start of a New Tomorrow

We’ve seen private-sector investors keen to tap into this potential but they are reluctant to do so as long as there are so many prohibitive and complex regulations around education. The good news is the government does seem to be addressing the issues and taking steps to de-regulate, so this could be a good time to ride the waves of change.

The EdTech trend and digital empowerment in Indonesia are only just beginning. Especially as a 2019 Pew Research Centre report on populations show that Indonesia has a median age of 30-years-old or younger and a quarter or more people are below the age of 15.

We think the positive impact these trends could have on local communities and the future of this young nation should be taken seriously if you’re interested in investing in Indonesia.

At Seven Stones Indonesia we believe in the power of this positive mindset. We believe in helping our clients, partners and communities create a better world by adapting to change and focusing on what matters most to them. We deliver solutions, peace-of-mind and we help businesses grow, which is why we support educational and digital initiatives as much as we can.

We see where the problems and roadblocks are but we’re also seeing opportunities; opportunities to focus on quality instead of quantity; opportunities to create and develop alternative energy and manage waste; opportunities to improve infrastructure and opportunities to help build stronger, more sustainable communities through improved education and health.

If you or your business shares our vision and you’re looking for innovative ideas and ways to have a long-term positive impact let us know. We’d love to help!

Send an email to [email protected]

Image by Agung Pandit Wiguna from Pexels.

Sources: Channel News Asia, The Jakarta Post, Jakarta Globe, Bloomberg, Kr-Asia, Investopedia, EdTech Hub, Pew Research Centre, ASK Consulting and the Indonesia Education Forum, Tempo

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