“The potential is huge” – Indonesia’s TNE and outbound market

Published 28/09/2022

With a young population, a fast-growing economy and rapidly increasing higher education enrolment rates, Indonesia is bursting with promise.

In 2021, the UK named the Southeast Asian nation as one of five priority regions in its international education strategy, describing it as a country that has “significant potential for growth” and where Steve Smith, the UK’s international education champion, could “both open up opportunities and address barriers to that potential”.

Ahead of the UK’s trade mission to the country at the end of November, The PIE News delved into the opportunities within Indonesia’s international education sector.

Transnational education

The Indonesian government is keen to improve the quality of the country’s higher education and it sees global collaboration as a method to do this. It is encouraging international universities to set up in the country – but they must do so in a way that supports Indonesia’s development and benefits local institutions.

In 2018, the government set out guidelines for the establishment of international branch campuses. Institutions should offer programs in priority subject areas that are not already widely available in Indonesia, they must collaborate with a local partner, and they must operate as a non-profit. The focus is on institutions in the top 100 in global rankings.

Three years later, Australian university Monash became the first institution to set up a foreign-owned branch campus in Indonesia. Speaking at the inauguration ceremony, Indonesia’s education minister Nadiem Makarim said that the University will “play an important role in our effort to develop a more relevant and resilient education system, as well as to ensure students could thrive in an ever-changing workforce”.

In addition to branch campuses, foreign universities are also invited to develop partnerships with local institutions to establish a new university or deliver joint study programs. Some are already doing this. In 2020/21, 61 UK higher education providers had TNE students in Indonesia, according to HESA.

“The parents don’t want to send the child so early. They like the model of one plus two or two plus one”

“By having some sort of establishment here in the country, [universities] can actually get more market share” said Kevin Putra Wangsa, CEO at Indonesian edtech platform Universitas123. “Because for some students, the parents don’t want to send the child so early. They like the model of one plus two or two plus one.

“That is also an attractive model that sells pretty well in the country, because obviously there are still a lot of people who don’t go abroad, but actually they have the financial capability. They just don’t go abroad for many different reasons.”

A 2022 insight report by QAA into Indonesia emphasised the popularity of studying locally, noting, “Indonesian culture is family orientated and there is often a desire for students to study close to home. This is reflected in the number and type of higher education providers in Indonesia.”

Outbound destinations

Indonesia sent an estimated 53,604 students abroad in 2019, making it the third top sending country in the ASEAN region, after Vietnam and Malaysia. Although outbound numbers took a dip during the pandemic, agents believe that demand for international study is recovering well.

“There is influx [in] demand from Indonesian students as we are back to normality,” said Victor Emanuel, Indonesia country head at AECC Global, adding that students are keen to return to in-person learning.

Australia is the most popular destination among Indonesian students, in part thanks to its proximity to the archipelago – a flight from Jakarta to Sydney takes approximately seven hours.

Over 13,000 Indonesian students are studying in Australian higher education institutions, compared to the approximately 3,000 in the UK. But Emanuel believes that the UK is becoming more popular and that it ‘stole thunder’ from Australia during the country’s pandemic-induced border closures. Wangsa added that postgraduate courses in the UK are appealing as they only last one year, compared to courses in Canada and the US which typically take two years to complete.

“Korea is also becoming very popular nowadays”

Indonesian students are also increasingly looking to less traditional destinations, such as Ireland.

“They’ve been trying to penetrate with more activities in the market working closely with Education Ireland Enterprises to spread the presence in the region,” Emanuel said. “I would say quite promising for the near future.”

“Korea is also becoming very popular nowadays,” added Wangsa. “We can’t deny the influence of Korean drama or K-pop – that attracts a lot of Asian students wanting to go to Korea.”

What are students looking for?

Agents highlighted that post-study work options aren’t as important to Indonesian students as they are to other nationalities.

“Indonesia is not really a migration market,” said Wangsa. “Small groups of students intend to stay on and continue working overseas, but most of the students, the self-funded students especially, they will come back.”

According to Emanuel, some of the key factors that Indonesian students take into account when choosing a destination and institution are: rankings; work experience opportunities; hands-on learning; and the existing Indonesian student population.

“The potential is huge,” said Wangsa, a former ‘traditional’ agent who is now trying to recruit Indonesian students digitally via his company’s app. “We plan with this model, we can penetrate the whole of Indonesia without having to open up offices one by one in every different city.”

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