ABSTRACT
The ASEAN Economic Community (AEC) has been established since 2015. One of its visions is to develop a single market and production base among the ASEAN member countries through its five pillars, one of which is freer flow of skilled labour, that is often referred to as university graduates. Because of its large population size, Indonesia is considered as a large market, yet with potential. However, the unemployment rate in Indonesia is 5.7% and the university graduate unemployment is 4.3% in 2014. In addition to that, even before the AEC effectuation, foreign workers in Indonesia have increased in number—from 59,577 in 2009 to 68,957 in 2013 – and mostly work as professionals, advisors, consultants, managers, directors, supervisors, technicians and commissioners in agriculture, industry, trades and service sectors. Are Indonesia’s university graduates ready to face the tighter competition in the labour market? Performing primary data collection, this study analyses the graduates’ quality in the five major state universities in Indonesia and their readiness to compete in the regional labour market. The study finds that there is a gap between what the universities produce and what the labour market expects. The findings could contribute to the provision of a policy recommendation to the government on how to meet the future challenges in the labour market.
