The Edutech Market in Indonesia: Opportunities and Challenges

Nothing could have prepared the Indonesian education system for the shock of the COVID-19 pandemic, despite the fact that it has overcome many obstacles over the years. Since the beginning of 2020, Indonesia has been battling to maintain its education system operating by replacing traditional in-person instruction with online courses, thanks to Edutech solutions. As a result of the government-imposed physical restrictions meant to curb the virus’s spread, there is an increased need for online education platforms.

 

Key Motivators and Obstacles for Indonesian Edutech Platforms

Software and hardware are used in education technology to enhance student and teacher learning. The increase in consumer spending is reflected in the rapid growth of Education technology users as Indonesian students become more dependent on educational technology applications to supplement their learning activities. The market for educational technology in Indonesia is expected to reach USD 112 million in 2019 and expand at a rate of 24.9% annually.

 

Catalysts Driving the Growth of the Edutech Sector in Indonesia

Inconsistent Quality of Education
Despite having a good teacher-to-student ratio, most of the teachers in Indonesia are not licensed. Additionally, as the labor market becomes more competitive, students turn to alternative sources for academic support. Students are more trustworthy on Edutech platforms now as a result of the combination of ineffective teachers, increasing pressure, and growing demand for extracurricular courses. According to a poll, students themselves made 70% of the transactions on one particular Edutech site.

Huge Number of Students
In Indonesia, more than 55 million children attend public and private schools, and the government’s 12-year policy of mandatory education will only see a growth in that number. Additionally, there has been a significant increase in spending in the education sector as a result of expanding middle-class consumption and rising disposable income. Consequently, the need for ancillary educational services like Edutech Solutions is driven by the fact that over 59% of the population passed grade 12 in 2019.

The Growing Number of Internet and Smartphone Users
Smartphones and speedy internet connections have made it simpler for kids to complete their homework and obtain on-the-go coaching lessons on a variety of subjects since technology has permeated every element of our way of life. Indonesia saw a 27 million (+16%) growth in internet users between 2020 and 2021. In addition, 89.2% of Indonesians are anticipated to own smartphones by 2025.

Urgent Need to Improve Competencies among Unskilled Workforce
With an anticipated 10 million qualified workers needed by 2030, the availability of personnel with the necessary skill sets and competencies is essential to enabling Indonesia’s digital economy growth. As a result, in 2020, the Indonesian government gave its unemployed citizens pre-employment cards that allowed them to select from a range of occupational skills to master. Additionally, the bulk of Indonesia’s workforce is made up of millennials, who are more likely to remain loyal to businesses that provide regular opportunities for training and professional growth. This is what drives demand for Edutech solutions.

 

Challenges Confronting the Edutech Industry in Indonesia

Differences in the Proficiency of Teachers
Although the teacher-to-student ratio is favorable in Indonesia, the quality of teachers is low because there aren’t many stringent requirements for becoming a teacher.
However, teachers who have advanced their digital skills are better able to encourage students to use a variety of Edutech solutions.

Options for Limited Payment
Due to the fact that 66% of Indonesians lack banking services and credit cards, customers, particularly students, have difficulty making purchases online using Edutech platforms.
Instead of using online payment methods or credit cards, working with telecommunications firms can allow students to swiftly access educational programs that have been included in prepaid cell plans.

Incorporating Government Initiatives
One of the major priorities of the Indonesian government is education, with up to USD 421.9 million set aside in 2019 to accelerate the adoption of digital skills and 20% of the national budget devoted to educational activities. If there are chances to provide content and programs that match government goals, users will be able to use government budgets to upskill themselves.

 

Indonesia’s education sector is flourishing as a result of the nation’s growing population and better internet access. As a result, the development of the Edutech industry attracts a large number of investors, both domestic and foreign.