Productivity and Competitiveness

· 3 minutes read

The low national productivity is back in the spotlight. Increasing the productivity should become a priority in achieving higher and sustainable economic growth.

Although the government has been quite successful in maintaining the economic growth momentum and in improving socioeconomic indicators, such as reducing poverty and unemployment and improving the Human Development Index, the World Bank considers that its achievements during the last five years are not enough to realize higher, inclusive and sustainable economic growth (Kompas, 3/7/2019).

The low national productivity is not a new problem. It has been a scourge for a long time and has become one of the reasons why Indonesia’s growth is below its potential. Current growth is not enough to bring Indonesia out of the middle income trap and toward becoming a developed country by 2045.

Productivity is closely related to competitiveness. The low competitiveness and productivity are disincentives for investors and obstacles to the progress of industry. They have become the sources of various economic diseases that we face today.

One of the triggers for the low national productivity is the low productivity of the workforce. It is prerequisite to build superior, competitive and productive human resources.

In the IMD World Talent survey, the competitiveness of our workforce has continued to improve, but it is still below the need to cope with the global competition and is also below those of our competitors. Although a number of breakthroughs have been taken, such as allocating 20 percent of the state budget for education and promoting vocational education, the results have not been as expected.

In general, our economic profile hasn\'t changed much. According to Statistic Indonesia (BPS), of the 136.18 million workers as of February 2019, almost half are still elementary school graduates, while university graduates are only 13 percent. It is no wonder that the readiness of the workforce in facing the digital and Industry 4.0 era and shortage of tens of millions of experts will continue to haunt us in the next few years.

Unpreparedness also makes our country vulnerable to being invaded by foreign professional workers when the free market in the region is fully implemented. If no breakthrough is taken to improve the quality of human resources, an extensive deregulation and improvement of the investment climate will not be enough to spur industry and the economy.

Through Nawacita II economic program, which has listed human resource development as one of the priorities of the government, President Joko “Jokowi” Widodo is expected to be able to make changes, through various breakthroughs and policy corrections, to lay the foundation for long-term human resource development in the future.

Improving labor productivity can only be realized by creating good and high-quality jobs. The keys are through education, skill development, public policy support, improving the business climate and improving regulations related to employment. It can\'t be just the government itself.

There must be more cooperation with universities, industries and communities. More importantly, increasing national productivity is also not enough just to improve the quality of human resources. There must be a serious effort to foster a productive culture nationwide and to turn it into a national movement that involves all components, and is not only done through discussions.

Editor:

economic growth kompascetak nawacita ii