In Indonesia, young people aged 18-30 comprise nearly 28% of the total population of 272 million. For young Indonesian workers aged 15-24, the unemployment rate is now 20.5%, which is 6.8% higher than that of the country’s average of 13.7%.  This high number is in part the result of the COVID-19 pandemic, which had a detrimental impact on Indonesia’s workforce, and further worsened the already dire employment situation for Indonesia`s young workers. For every 100 youth of working age, 20 are unemployed because they do not have enough skills, or the right skills required by employers. Among those youth who are employed, the largest share works outside the formal sector, often involving unskilled labor with lower wages and severe working environments. 

Youth who experience the most inequality and discrimination, including young women, youth with disabilities and youth from low socio-economic status, face substantial barriers to inclusion in capacity-building and the labor market. Structural discrimination has made their employment disproportionally characterized by precarious and unsafe working conditions. Furthermore, due to their lack of skills and experience, they are often left with few work options and take whatever work they can find, including jobs in the informal, low-paid, unstable and dangerous/risky jobs that trap them in the cycle of poverty.  

Opportunities for young people to become entrepreneurs are limited by a general negative mindset and culture about entrepreneurship as a viable form of employment for young people, and the lack of business development supports. These negative perceptions are not only held by the youth themselves, but also by their parents, families, and communities, resulting in a lack of support for those who wish to pursue an entrepreneurial path. These perceptions stem from the lack of knowledge about how to generate business ideas, to acquire entrepreneurship and business skills, and access start-up capital. 

Female participation in the labor force remains low in Indonesia. In 2019, only 56% of women of working age participated in the workforce, compared to 84% of men. That same year only 40% of young women aged 15-24 participated in the workforce, compared to 56% of young men of the same age (ILO, 2019). The percentage of young women Not in Employment Education or Training (NEET) is 26%, compared to their male counterparts’ percentage of 15% (ILO, 2019). In addition, women entrepreneurs face more structural barriers because of discriminatory gender norms, high unpaid home care burdens, lower access to productive assets, limited opportunities to develop business and entrepreneurial skills, constraints on access to capital, lack of access to networks and mentors, and gender-biased policies.  

 Youth with disabilities are among the groups that experience the most inequality and discrimination. There is very limited support for them to access secondary education, especially Technical and Vocational Education and Training (TVET) programs, and these programs are typically not inclusive. They also face multiple barriers to accessing employment, such as limited access to skills development opportunities for the capabilities required by employers, such as digital skills, as well as lack of career counseling services. Through our programs for youth with disabilities funded by Accenture in Global Grant 5 (GG5) and Global Grant 7 (GG7), Save the Children acquired significant learning and experience about the complexities and barriers that youth with disabilities face when they want to join trainings or access internships and paid jobs. We found a general lack of awareness among mainstream schools and employers about the needs of youth with disabilities and the importance of inclusive programs and policies, as well as a lack of support provided to youth with disabilities by local governments. We also found that youth with disabilities lack confidence regarding their capacities and abilities, and that their parents and families are afraid of letting them join trainings or formal employment because of concerns about bullying and mistreatment. 

West Java and East Java provinces have Indonesia’s second- and fifth-highest full unemployment rate. In West Java, in 2020, 10% of the total workforce was unemployed, while in East Java the unemployment rate was 6%.  Nearly half of those unemployed were senior high school and vocational school graduates. The two main reasons for unemployment among secondary and vocational school graduates are: 1) the gap between the number of jobs offered, compared to the number of secondary and vocational graduates looking for work; and 2) the skills gap between youths’ skills and employers’ requirements.  

The COVID-19 pandemic emerged at a time of increasing environmental risks, such as more frequent and severe climate-related disasters, food scarcity, water shortages and waste issues, and it also worsened the employment market as companies tried to adapt to the impact of the pandemic.  Boosting economic growth while transitioning to a green economy, and the digitization of micro, small and medium enterprises (MSMEs) are priorities for the Indonesian government to decrease unemployment.  MSMEs make up 99% of Indonesian businesses and generate more than 60% of the national GDP. The MSMEs have the high potential to offer jobs for marginalized youth, as they use mainly local resources, and they have high potential for economic growth. If MSMEs can digitize, their products can be sold in both offline and online marketplaces, boosting economic growth and employment. Digitization for MSMEs became more urgent during the pandemic as micro and small businesses struggled to adapt to economic and consumer shifts. Projections from Indonesia’s Low Carbon Development Initiative estimate that transitioning to a green economy will help decrease climate change impacts, and also offer the possibility of creating 15.3 million new jobs by 2045.