Population 245 million. 86% Muslim. World’s
third largest democracy.
Regularly
overshadowed by its elephantine regional neighbors China and India, the world’s
largest archipelago, Indonesia, is emerging with the quiet stealth and power of
a tiger. Together, the ASEAN-5 (Indonesia, Malaysia, Thailand, Vietnam and
Philippines), often referred to as the tiger economies, represent some of the
world’s best economic opportunities of the next decade.
Yet as
we see elsewhere in the emerging world, the endogenous talent pool is
inadequate for the requirements of many 21st century jobs, and the local
education system can’t pump out skilled graduates fast enough. To be fair,
they’re working on it, but the backlog is enormous and the forward orders are
daunting. So talent management is fast getting elevated to critical business
issue status.
If
you’re a multinational corporation riding on that country’s 6% per annum
average GDP growth and expanding your Indonesian operations, some of the local
idiosyncrasies you will encounter in this market include the following.
A
deeply religious culture
Most
multinational corporations originate from the western world. Much of the
western world subscribes to one of a variety of Christian faiths. Almost 9 out
of every 10 Indonesians you meet will be Muslim. Is that a problem? No. But you
will need to accommodate some of the different religious practices that come
with Islam. Like the formal requirement to pray five times per day, the general
abstinence from alcohol, and Ramadan, a month of fasting and religious
celebration. Indonesians are generally tolerant of other religions but find
atheism incomprehensible and uncomfortable.
A
strictly hierarchical structure
Like
many collectivist cultures, a very formal hierarchy prevails in Indonesia. You
get it with age, seniority and/or social status. Those at the top of the
hierarchy are known as Bapak (or Ibu if you’re female), and can be assured of
deference and obedience from everyone else. You don’t have to be Indonesian to
gain this status – if you’re the boss or most senior manager, you hold the
Bapak card. There is a price tag for this respect and unquestioning obedience:
you are expected to know what you are doing, make decisions and give direction,
and importantly, maintain a paternalistic vigilance over your flock that may
feel far more personal than professional to the average western manager.
An
infatuation with social and mobile technology
There’s
no Chinese firewall here. Indonesians love their technology and have not only
jumped on the social and mobile bandwagon, but are whipping the horses with
glee. Internet subscriptions grew 25-fold in the decade to 2011. There are 250
million mobile phones – yes that’s 105% penetration (many Indonesians carry 2
or 3 phones each). 76% of internet users are on Facebook, putting Indonesia in
third place behind only the U.S. and India in global Facebook user rankings.
And they love Twitter too – an impressive ranking of No.1 for penetration of
internet users tweeting vigorously.
Implications for talent management
In my
just released white paper Indonesia’s
talent management challenges and opportunities are explored in some detail. The
country and its people are keen and ambitious.
Growing pains abound: political and social reforms, infrastructure
challenges, environmental degradation and over-population. But Indonesia is
well placed to leverage its development and increase its global presence.
Behind
the reeds, this tiger is lurking.
Business & Investment Opportunities
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