Human Capital vs Working Capital

Let me begin with the fact from Labor Force Situation in Indonesia by Badan Pusat Statistik per February 2009, based on the total number of young people between the ages of 15-24 years old in Indonesia (each country has different point of view to define the meaning of youth), the number of labor force between those ages is 21,066,360 people. Then, based on this economically active number population, the 4,726,153 are unemployed. This number shows us that more than 51% of the unemployment in Indonesia consists of young people. According to the improvement and the use of technology in most companies today, there will be more declining occupations which are likely to happen in the future. So, the good news—we have a lot of human capital and will have it more in the future.

In some rural areas, the access to study is still difficult to be reached, once they can achieve the access of it, they should face the high cost of enrolling school, and once they finally enter the school, they cannot imply what are the things that have been learned after finishing the school period. The problem of unemployment is partly attributable to the fact that education systems often offer curricula that are not related to the world of work. Big portion of students admit that most of their times are wasted in “studying” something rather than “learning” something. Thus, what is the insight of great opportunity in having a lot of human capital which are available to be absorbed if it is not followed by the high number of well-prepared young people due to the fact that they are less educated about the world of work? So, the bad news—we still have less of working capital.