Indonesia is currently experiencing a “demographic dividend” phase, characterized by a surge in the young population. However, this younger generation, primarily Generation Z (those born between 1997 and 2012), is wrestling with significant employment obstacles.
Employment Challenges for Gen Z
By 2023, nearly 10 million individuals from this generation were neither employed nor receiving an education or vocational training, according to data from Statistics Indonesia. This figure, consisting primarily of women, highlights the persistent problems of youth unemployment and skill deficits.
Furthermore, these individuals must adapt to an increasingly competitive job market, exacerbated by the advent of Artificial Intelligence (AI). According to a report from the World Economic Forum, AI’s broader implementation in workplaces is projected to alter approximately 23% of all jobs.
Indonesia’s Population and Economic Prospects
Indonesia’s population, which is growing at an annual rate of about 1.11%, is expected to reach 284.4 million by 2025. During the “demographic dividend” decade from 2020 to 2030, Generation Z has become the largest demographic, comprising almost 28% of the total population, or roughly 75 million people.
Despite this surge, the demographic dividend period offers not only potential opportunities but also significant challenges. If not properly harnessed, it could hinder the country’s economic growth and overall wellbeing.
In early 2025, a hashtag translating to “Just Escape for Now” gained popularity among young Indonesians, symbolizing a collective urge to seek better opportunities overseas.
National Internship Program
To address these issues, the Indonesian government launched the National Internship program in 2025. The Ministry of Manpower reported that the program successfully achieved its target of enrolling 100,000 participants, primarily recent graduates, during its first year. The program is expected to continue in 2026 with an equivalent number of participants.
Media Wahyudi Askar, the Director of Public Policy at the Centre of Economic and Law Studies, believes that the National Internship Program could expedite the shift towards improved access to formal employment opportunities.
Questions & Answers
What is the “demographic dividend” period in Indonesia?
The “demographic dividend” period refers to the current decade (2020-2030) in Indonesia where Generation Z (those born between 1997 and 2012) has become the most significant population group.
What are the major employment challenges faced by Generation Z in Indonesia?
The primary issues include high rates of unemployment, a lack of necessary skills, and changes in the job market due to the implementation of Artificial Intelligence.
What is the objective of the National Internship program initiated by the Indonesian government?
The National Internship Program aims to address employment challenges faced by the younger generation by providing them with better access to formal employment. The program enrolled 100,000 participants in 2025, with a similar number expected to continue in 2026.
