Shifting Skill Demands and Workforce Competency Development Challenges: An Analysis of Indonesian Family Life Survey (IFLS) Data 2000-2014

Digital transformation and technological advancement have reshaped the labor market, shifting from traditional sectors to services and technology. The Future of Jobs Report 2025 (WEF) highlights growing demand for roles such as AI specialists and big data analysts, while traditional jobs decline. Using IFLS 2000 and 2014 data, this study finds that: the number of unemployed individuals doubled, with nearly 50% of those still employed experiencing sector shifts; workers who changed sectors earned lower wages than those who remained in the same sector; and training can improve skills and wages, including for those who experienced sector transitions. The study concludes that sector shifts occur in the labor force, but the root cause of lower welfare and unemployment is a lack of competencies and required skills. Recommendations include developing a training curriculum roadmap aligned with skill demands, providing incentives for employers to offer training, and optimizing the government's role in providing flexible and affordable training access through vocational schools and higher education.