Challenges and Opportunities to Internationalize the Indonesian Higher Education Sector

Abstract

The higher education (HE) system in Indonesia is complex and fragmented, with 4.5 thousand universities offering over 25 thousand majors. The system includes public and private universities, institutes, schools of higher learning, academies, community colleges, and polytechnics. Despite growth in institutions and enrolments, the country’s higher education institutions rank low across global rating indicators. The major weaknesses within the higher education sector include the absence of consistent academic quality standards, inconsistent certification, accreditation, supervision, and monitoring processes, an absence of postgraduate-trained staff, and limited research output in recognized international journals. Programs are not linked to workforce skill requirements and graduate unemployment and underemployment rates are high. The word “Internationalization” for Indonesian higher education practically means to “go international” in every aspect of higher education including its education quality and standards, staffing, research, and graduates. The Indonesian government has given priority to the internationalization of universities that includes the goal that universities improve their competitiveness and quality so that they effectively compete globally for staff, students, and research funding. To internationalize, Indonesian universities will have to improve quality across staffing, programs, teaching, and research.

1. Introduction

The services sector is being globalized through such processes as outsourcing and international consolidation. The services sector accounts for a growing share of output and jobs across the OECD [1]. At the same time, international trade and investment in the services sector have increased [1]. Global corporations dominate service industries such as accounting, the media, publishing, finance, communications, and logistics. As a service industry education is also undergoing a process of globalization. In the higher education sector, there are universities with global reputations (Harvard, MIT, Cambridge, Oxford) and multinational publishing houses that provide integrated courses to universities and students globally and dominate the publishing of academic journals. The process of globalization is supported by technological developments associated with the Fourth Industrial Revolution that “concerns the digital transformation in society and business - an interface between technologies in the physical, digital and biological disciplines….Emerging technology such as artificial intelligence, robotics, the Internet of Things, autonomous vehicles, 3-D printing, nanotechnology, biotechnology, materials science, energy storage, and quantum computing, represent just the tip of this technology iceberg” ([2], 2). Globalized universities can have a local presence, without a physical campus, via online courses. Enrolments in online learning programs are expanding exponentially, placing pressure on traditional university systems [3]. In the age of the Fourth Industrial Revolution, globalization is occurring without being accompanied by foreign direct investment and presence in the countries from which students are enrolled. In addition, technology is transforming teaching and learning processes and supporting sophisticated research programs via such processes as artificial intelligence, cloud data storage, big data analysis, biotechnology, and machine learning [2].

In this chapter, the discussion is on internationalization, a separate, but related process to globalization. The focus of internationalization is on developing an international component into these core functions—teaching, research, and engagement. Globalization refers to trade, investment, and integration of the sector across countries and has an industry focus. With respect to the higher education (HE), sector internationalization encompasses many dimensions and processes. These include the curriculum, students, staff, research, governance, and reputation. Within this chapter, the nature of internationalization in the context of the Indonesian HE system is mapped and the opportunities and challenges to internationalizing the sector are discussed. As with other emerging economies, there is a national goal to increase access to education and to develop human capability through increased participation in post-secondary education [4]. This is a global aspirational goal linked to improving living standards and the quality of life [5]. To pursue this process requires a HE sector that provides access to those seeking post-secondary education, relevant programs that are linked to national and personal goals, and quality education that ensures graduate employability and supports growth and productivity [6]. To this end, internationalization is a process in HE that supports the qualitative improvement in programs and contributes to broader national and personal development objectives.

For all countries, investment and quality higher education systems are important as they contribute to human capital development, the alleviation of poverty, the productivity of industry, innovation, and development, and core skill development [7]. For individuals and nations, the returns from investment in the HE sector are significant [7]. Investing in HE remains an important step toward achieving many development goals:

Economic research unequivocally illustrates high private and social rates of return for investments in tertiary education, including research. The benefits include higher employment and earnings, productivity growth and innovation, greater social stability, more effective public sector bureaucracies, increased civic engagement, and better health outcomes. The consequences of underinvestment in tertiary education include talent loss, limited access to applied research capacity for local problem solving, hindered economic growth due to low levels of skills in the workforce, low-quality teaching and learning at every level of education, and, perhaps most glaringly, expanded wealth inequality both within countries and among nations, with those investing proportionately more experiencing more innovation and attraction of investment. ([7], p. 2).

Making progress toward the UN sustainable development goals, especially reducing poverty, improving living standards, and improving equity requires a significant investment in HE [8]. For this reason, it is important for a country like Indonesia to not only invest in the HE sector but ensure that the sector is efficient and effective [9]. To this end, examining internationalization is an important part of supporting the qualitative development of the HE sector.

In this chapter the internationalization of the Indonesian HE sector is evaluated in terms of the progress toward internationalization, the barriers faced, and the programs and policies in place to support internationalization. To address these issues, the chapter draws on secondary sources through academic literature and from reports by national and international agencies. The chapter is organized as follows. First, an outline of the Indonesia HE sector is provided. Then, there follows an examination of the process of internationalization of the HE sector. Following is a discussion of the evidence on the standing and progress toward internationalization of the Indonesian HE sector. The challenges for realizing internationalization in Indonesia are outlined. This is followed by an assessment of current programs to support internationalization. Finally, the chapter reflects on the key processes that are required to support the internationalization of the Indonesian HE sector.

2. Background to Indonesia

Indonesia has over 18 thousand islands. The Indonesian economy, politics, population, and education system are concentrated in Java and Sumatra. Over 85 percent of Indonesia’s GDP is generated from these locations [10]. As in nearly all emerging economies, there is a national program toward improving living standards, increasing employment opportunities, and developing globally competitive industries. With sustained GDP growth, increased education participation, a shift away from agriculture, and migration to urban areas, the share of those in poverty has declined over the past two decades [11]. There has been an ongoing emigration of Indonesia workers to Asia and the Middle East working in hospitality, domestic work, construction, and plantations [10]. Indonesia has had to deal with natural disasters including earthquakes, tsunamis, fires, floods, and volcanic eruptions. The economy was hit hard by the Asian financial crisis (1997–1998), the global financial crisis (2008–2009), periodic fluctuations in world oil prices, and the COVID-19 pandemic [12].

Indonesia has the largest population and economy in SE Asia. Indonesia’s economy has moved from being the world’s 27th largest economy in 2000 to the 16th largest in 2018 [11]. There are many ethnic groups, the dominant ones being Javanese and Sundanese. The main religion of Indonesia is Islam, and this plays an important role in Indonesian culture and politics. The structure of the Indonesian economy shifted from dependence on agriculture in the 1950s and 1960s to industrialization and urbanization from the late [13]. Indonesia’s GDP composition by sector share is agriculture (0.14), industry (O.41), and services (0.45) [14]. The major exports of Indonesia were processed and unprocessed commodities including palm oil, coal briquettes, petroleum gas, crude petroleum, and rubber [15].

A feature of the economy is the large share of informal or unregulated employment, especially in agriculture. There are high rates of youth unemployment and underemployment throughout the economy, and the female labor force participation rate is well below that of males [15, 16]. Despite the ongoing structural change, per capita income growth is low, and poverty is widespread [17]. Productivity growth has been limited, reflecting low rates of investment, especially in skills, and labor-intensive production, especially in agriculture [15]. While the formal sector has expanded, the informal sector remains large and many jobs in the formal sector are short term and insecure [10, 18]. Contributing to low productivity growth are the limited and dated infrastructure and unreliable electricity supplies [13].

Despite the expansion in secondary and HE education and participation in Indonesia, there has been an ongoing skills gap and graduate employability problem. Pryono and Nankervis [19] reported that key skills gaps across occupations included senior managers and professionals, scientists, and engineers, and major skills shortages across several industry sectors that included agriculture, forestry, hunting and fishing, transport and storage, finance, insurance, real estate, and business services. Despite the record enrolments in HE, the skill shortages were persistent, especially in the professions [19].

While Indonesia reported GDP growth of 5 percent over the last decade, employment growth has been one percent or less on average [17]. In part, this reflects the large informal and unregulated employment sector that accounts for about three-quarters of the workforce. GDP growth does not translate into formal job growth. In addition, there have traditionally been high rates of youth unemployment and underemployment, and the female labor force participation rate is considerably below that of males [15, 16]. Despite GDP growth, per capita income is low, and poverty is widespread [17, 20]. Productivity growth has stalled because of limited investment in skills and training, labor-intensive production, and the large share of irregular employment in the formal sector that results in limited investment in training [15].

Post-COVID, there has been a strong recovery, though the COVID pandemic had a major negative impact on the economy. The IMF [21] review of the Indonesian economy noted that the economy was expected to recover with real GDP growth forecast to be over 5 percent for 2022 and 6 percent for 2022. Despite the predicted strong growth, the IMF [21] identified several risks to ongoing growth, and these included adverse global conditions (increasing inflation and interest rates) and risks from global climate change with Indonesia at risk given its dependence on hydrocarbons, the extensive de-afforestation occurring throughout the archipelago, its location in an active earthquake/volcanic zone, and the risk of severe storms/typhoons.

3. The Indonesian education system

The Indonesian education system is the fourth largest in the world with over 50 million students, 3 million teachers, and 300,000 schools [22]. Pre-school education in Indonesia is not compulsory. There are around 50,000 kindergartens in Indonesia, nearly all of which are privately owned. Children are required to attend 12 years of school. Students can choose among state-run, non-sectarian public schools, and religious schools. There are around 170,000 primary schools, 40,000 junior-secondary schools, and 26,000 high schools. About 84 percent of these schools are under the Ministry of Education and Culture and the remaining 16 percent are under the Ministry of Religious Affairs.

There are two types of high schools in Indonesia: SMA (Sekolah Menengah Atas) and SMK (Sekolah Menengah Kejuruan). SMA students are prepared to continue to higher education, while SMK, as a vocational school, prepares its students to work after finishing their schooling, without moving on to higher education. There are also around 200 international schools in Indonesia. International schools adopt an international curriculum such as IB (International Baccalaureate) or CIE (Cambridge International Examinations) that support English entry qualifications into university programs that are taught in English and offshore [23].

The participation rates in secondary education are high at around 98 percent, but the participation rate in tertiary education is 36 percent [24]. In 2021, around 3.21 million students were enrolled in state universities. State universities are under the purview of the Ministry of Research, Technology, and Higher Education of Indonesia. These universities exclude state universities with religious affiliations that fall under the Ministry of Religion’s responsibility [25]. In 2021, there were around three thousand private universities in Indonesia. Private universities in Indonesia operate on budgets that are almost entirely tuition-fee driven, and students get limited, if any, financial support from the government to attend such universities [26].

There has been a concerted push to increase investment and enrolments in the HE sector. The World Bank [4] commented that Indonesia:

“has drastically increased investment in the sector and instituted important reforms at all levels of education. This has led to rapid increases in access, especially for the poor and in secondary education. The number of higher education students has doubled in five years. Overall spending for higher education has tripled in real terms, to over 30 trillion rupiah. The plans for further expansion are aggressive. The Governments plans include tripling the number of students in technical programs and increasing the number of doctoral students fivefold by 2025. The new Higher Education Law 12/2012 establishes that each district should have its own community college. Indonesia has also been putting policies in place to continue expanding access to senior secondary and higher education.”

As set out by the government, the strategic objectives of the Indonesia HE sector include the following:

“(1) increased quality of higher education learning and student affairs; (2) increased quality of science and technology institutions and higher education; (3) increased relevance, quality and quantity of science and technology and higher education resources; (4) increased research and development relevance and productivity; and (5) Strengthening innovation capacity [27].”

As of 2021, there are 125 state universities in Indonesia. Entering state universities in Indonesia is arguably harder than private universities as the top Indonesian universities are dominated by state universities. There are three ways to qualify for Indonesian state universities: firstly, by invitation. Students, whose grades in the last five semesters of high school meet the university entrance criteria, would be nominated by their schools to receive an invitation to the universities of their choice. Students who do not receive an invitation to enter state universities could still qualify by either sitting for the nationwide university entrance exams or sitting for an independent entry selection examination offered at selected state universities [25].

The Indonesian education framework is complex and fragmented, and contains many internal contradictions. Within the HE system, there are public and private universities, institutes, schools of higher learning, academies, community colleges, and polytechnics. The key policy challenges for the sector include inconsistent academic quality standards; inconsistent certification, accreditation, supervision, and monitoring techniques; and academics who do not possess post-graduate qualifications and research experience [9, 28]. As with many other countries in the region ([19], 21) there are problems for graduates transitioning to jobs, with most graduates being without full-time employment from four to eight months after graduation, and with many of those in jobs that are unrelated to the professions in which they were educated [29].

4. Graduate work readiness challenges in Indonesia

The high rates of underemployment and problems in accessing the labor market is a persistent problem for Indonesian graduates [19] and points to a longer-term structural failure in the HE system in Indonesia. Reviews of graduates by international agencies found gaps in graduate attributes including critical thinking, communication and independent working competencies, leadership, team orientation, creativity, English-language fluency, and information technology skills [4]. Other work-ready deficiencies identified included personal integrity, intellectual capacity, teamwork, analysis, and problem-solving skills [44]. The OECD [5] identified weaknesses in literacy and numeracy, job flexibility, work sequencing, time management, and team working abilities. The literature review by Priyono and Nankervis [19] revealed that there is a growing mismatch between the skill and job demands of industry and the attributes and capabilities of new graduates. As a result graduate unemployment and underemployment exist alongside national skills shortages. In their review, Priyono and Nankervis [19] indicated that the graduate work skills gap was not confined to the problems of curriculum and education, but reflected an overall failure of integration and coordination between government ministries associated with education, employment, skills, and training; the weak communication processes across the key stakeholders, including industry, education, and national and provincial governments; and the need for greater flexibility, increased funding of training and education, and innovative pedagogies in educational institutions. The World Bank [4] identified the mismatch between program enrolments and the changing structure of the economy. The two largest programs were public administration and teaching, both linked to scholarship access; but the shares were out of line with the occupational composition of the economy.

The World Bank [4] commented further:

“A certain degree of difficulty in finding qualified workers may be a sign of a healthy economy. As new and more evolved technologies are used (broadly defined to include not only physical production but also service provision), one expects employers to have a hard time finding workers who are ready for the new technologies. However, it may also be a sign that the education sector is not providing graduates with the right skills. The level of unemployment faced by higher education graduates, which is stubbornly high until the age of 35, maybe a sign of the latter. As the system expands so rapidly, it is important to ensure that the sector is preparing graduates for the labor market.”

Addressing graduate work readiness challenges cannot be the sole responsibility of universities; however, they do have a responsibility to graduates and the broader community to support an effective and fast transition into employment for those occupations for which graduates were educated. Internationalization is one component of meeting this challenge since it embodies many of the necessary attributes that improve graduate employability. These attributes include having soft skills that include a world view, tolerance, multiculturalism, effective communication, and cross-cultural engagement [19].

5. International performance indicators linked to education

The need for an institution of higher education to attain the status of a world-class university is an important objective for many universities in Indonesia. The Indonesian government has emphasized the need for the internationalization of universities through the 2003–2010 Higher Education Long-Term Strategy (HELTS), which declared that universities in Indonesia were expected to significantly improve their competitiveness and quality so that they could compete globally [49]. Following the HELTS 2003–2010, the Directorate General of Higher Education outlined HELTS for the period from 2011 through 2020, which focuses on integrating internal and external quality assurance and developing a higher education institutions database [30]. The status of a world-class university will bring benefits and a prestigious impression to the university, but there will be many challenges that must be faced to attain world-class status recognition. It is noted that Indonesian universities need to improve quality and undertake reforms pertaining to matters such as funding, policy, institutional and academic quality, and access to get a better position at the regional and global levels [6].

There are a range of ranking systems to assess universities. These include Shanghai Jia Tong University Rankings, Times Higher Education Supplement (THES), Webometrics Ranking of World Universities, International Rankings Expert Group & The Berlin Principles, Global University City Index, World Education News & Reviews (WENR), Academic Ranking of World Universities, and QS World University Ranking. The purpose of the rankings system is to inform universities, governments, graduates, employers, and prospective students about the standing of a university internationally according to pre-set criteria [31]. The rankings system in general has a Western bias and is predominantly used to rank universities in advanced economies and are used to highlight reputational standing and support brand marketing [32]. The rankings can be gamed and there are critiques of the methodology and applications of the systems [33].

For Indonesia, nine universities are ranked as world-class universities according to QS World: Universitas Indonesia (UI), Institut Teknologi Bandung (ITB), Universitas Gajah Mada (UGM), Universitas Padjajaran, Institut Pertanian Bogor (IPB), Universitas Airlangga (UNAIR), Universitas Diponegoro (UNDIP), Institut Teknologi Sepuluh November (ITS), and Universitas Brawijaya (UB) [34]. Apart from the inherent biases of the world rankings system, they are based on individual universities and do not incorporate the total tertiary education system or the entire education system.

There are indicators of the internationalization of universities. The universities with the largest numbers and shares of international students are found in the USA. The Times Higher Education World University Rankings ranks universities by their globalization through a review of rankings for students and staff by internationalization, international co-authorship of publications, and international reputation metrics. In 2022, the highest ranked universities according to the internationalization criteria were the University of Hong Kong; ETH Zurich; Ecole Polytechnic Federale de Lausanne; and the University of Oxford [35]. Indonesian universities were not listed in these rankings.

The OECD [36] provides a benchmarking assessment of 15-year-old students proficiencies in reading, mathematics, and science. From the 2108 report, Indonesian students scored below the OECD average in reading, mathematics, and science. A smaller proportion than the average of Indonesian students performed at the highest levels of proficiency in at least one subject; at the same time a smaller proportion of students achieved a minimum level of proficiency in at least one subject [36]. Despite these results, the OECD noted that the results had remained constant over the last decade in which there had been a major expansion in school enrolments.

The UN and the World Bank provide system evaluation of education and economic performance. The Human Development Index (HDI) assesses a country’s development trajectory using measures of life expectancy, schooling, and GNI per capita, as compared to other countries. For Indonesia, the HDI value was 0.694, in 2017 and it was ranked 116 out of 189 countries. The HDI for Indonesia increased from 0.528 in 1990 to 0.694 in 2017. On all measures of human development, Indonesia improved. The key measures are life expectancy, mean years of schooling and expected years of schooling, and GNI per capita increase [8]. The HDI for Indonesia suggests from 1990 to 2017 that well-being has improved as life expectancy (better health), schooling (education and opportunity), and material well-being (GNI per capita) have improved. The education system has contributed to this improvement, but the education measure applied is schooling based.

The Human Capital Index [37] indicates the extent to which a child who reaches 18 years of age accesses human capital in terms of health and education. It is an indicator of the future productivity of the workforce. In 2018, Indonesia ranks 87 out of 157 countries and ranks low within Southeast Asia and low relative to its income. The HCI score was 0.53, indicating that children who reach 18 years of age only access 53 percent of potential human capital. This suggests a problem with the availability and quality of schooling. For Indonesia, life expectancy and health have improved, as has the HCI ex score. Between 2012 and 017, the HCI score for Indonesia only increased from 0.50 to 0.53 [37].

The Gender Equity Index (GEI) from the World Economic Forum [38] measures gender-based disparities across a range of criteria. The GEI examines national gender gaps for economic, political, education, and health criteria. Indonesia was 95th out of 136 countries in 2013 and its ranking declined from 68th in 2006 to 95th in 2013. The overall disparity for women was around two-thirds of that for men in terms of labor force participation, health, education, and empowerment. The four areas that constitute the index are economic participation and opportunity, health and survival, education attainment, and political empowerment. For the GEI, the challenges are found across all the criteria. For education, women have comparable participation rates to men in schooling, but their participation falls behind in post-secondary education [15]. There are structural barriers that females face in participating in HE and in transitioning into formal sector jobs, this is especially so in rural areas where there are infrastructure shortages and the demands of supporting families and rural enterprises [16].

Indonesian universities do not rank globally according to the different world ranking systems. While different criteria are used across the ranking systems, Indonesian universities, with a few exceptions, are not included in any of the global ranking systems. When reviewing the education system there are several challenges revealed in the systems evaluations outlined above. These include relatively low rates of participation in post-secondary education, the capabilities of students in core competencies, questions around the quality of the education system, and equity and opportunity in the system, especially for females in post-secondary education. For individual universities, the challenge is to improve the quality of staff and programs, improve access for females, and better match jobs with graduates [19]. Within this set of challenges, the internationalization of the HE sector has an important role to play in addressing these objectives.

6. What is the internationalization of higher education?

Internationalization differs from globalization, but they have linked processes. Internationalization of higher education is a process of integrating international/intercultural elements across all elements of a university’s operations including teaching, research, service functions, and community engagement [9]. Gao [39] suggests that there are six dimensions of internationalization. For each dimension, there are several indicators. The six dimensions with example indicators are research (number and share of international researchers); students (number and share of international students); staff (number and share with international credentials); curriculum (joint degree programs with international universities); governance (international presence on- and offshore); and engagement (international networks and partnerships).

Internationalization is a response to the impact and processes of globalization, where the HE sector responds to the globalization of the economy, the society, and the labor market through systematic programs that aim to incorporate internationalization into all the key university processes [9]. Internationalization can benefit universities by improving national and international recognition, developing strategic partnerships, expanding academic networks, generating knowledge, improving learning outcomes, increasing research output and quality, and leading to national and international funding opportunities. Internationalization can integrate higher education systems into a global framework, produce graduates with a global vision and multicultural skills, improve the international exchange of staff and students, and build global partnerships [9].

Internationalization not only contributes to enhanced global recognition and standing, but it also supports the core functions of universities. There are multiple manifestations of internationalization that include having staff with international qualifications, publishing in international peer-reviewed journals, having international research partnerships, developing international staff and student exchanges, developing teaching, and learning processes that include international and multicultural elements, recruiting international students and engaging with alumni who are internationally based. Internationalization can potentially permeate through all functions of a university.

The process of internationalization requires a national approach to supporting partnerships with international universities, attracting international students and staff, becoming integrated into regional university networks, establishing research and university hubs, supporting the upgrading of staff qualifications, and “internationalizing” the curriculum [28, 40]. Leadership and investment nationally can support a process that gradually transforms the HE sector toward internationalization.

The Directorate General of Higher Education for Indonesia has emphasized the need for university internationalization through the Long-Term Strategy of Higher Education in 2003–2010 that indicated that universities were expected to improve competitiveness and quality so that they can compete globally [9]. This, in turn, is supported by a national program to establish minimum standards across the sector that include standards for content, processes, staff, infrastructure, management, financing, and program assessment [41].

For Indonesia, internationalization of the university sector is in its infancy. The university rating systems reveal that Indonesian universities have comparatively low rates of publication, especially in peer-reviewed journals. There are few staff with international post-graduate qualifications and there are few international students studying in Indonesia. Indonesia had 53,604 students studying abroad according to UNESCO [23]. The top three destinations were Australia, Malaysia, and the USA. International student enrolments in Indonesia have risen steadily to 7700 students, representing less than one percent of tertiary students in 2018. The largest share of foreign tertiary students studying in Indonesia comes from Myanmar. To date, there is one foreign university operating in Indonesia, Monash University from Australia, which opened a campus in 2022 [42].

7. The challenges facing university internationalization in Indonesia

While Indonesia is a member of ASEAN, there is very limited engagement by Indonesian universities within the region. While many students from Indonesia study abroad, there are few international students within Indonesia. The literature identifies the following challenges for Indonesia that must be addressed if internationalization is to be developed across the HE sectors. There is a lack of coordination and integration across the HE sectors and between key stakeholders in the system. Challenges include improving coordination between the national and provincial government; and between HE institutions, government, and employers [19]. There has also been an absence of a national program to support internationalization, although internationalization is proclaimed as a goal of the HE sector. Although the government has recently announced policies to encourage overseas universities to establish campuses in Indonesia and encourage short-term appointments of academics from overseas universities, there has been limited progress toward realizing these objectives [40]. Institutional conditions, including history, have not supported internationalization. Dutch colonial occupation established a rudimentary education system linked to Colonial ambitions [43]. The current university system meets national and provincial objectives and all the conditions that support internationalization (staffing, students, curriculum, research, reputation) are lacking across the HE system. International campuses are absent, international students are absent, visiting international scholars are absent, and participation in international research projects is minimal. On curriculum and quality of staff and programs, Usoh [9] and Wicaksono and Friawan [44] identified factors impacting quality and the potential for internationalization. These conditions included less government spending on education as compared to countries in the region: the low rates of graduate post-graduate qualifications of Indonesian teaching and lecturing staff; low salaries across the sector; and poor governance of public educational institutions.

Compared to neighbors such as Malaysia, Indonesia has failed to internationalize the HE sector. Malaysia had a national plan supporting internationalization of the sector that included attracting overseas universities, developing international partnerships, establishing university corridor hubs such as the Kuala Lumpur Education City, attracting international staff and international students, and investing in joint industry/university research hubs and facilities [45]. As a result, there are over 100 thousand international students per year and there is an international university presence by universities from North America, Europe, Japan, and Australia/New Zealand [45].

Since 2009 Indonesia’s allocated fund for education is 20% of the state budget. However, Indonesian higher education has limited collaboration with private companies, which could invest in education and possibly contribute toward developing a professional and skilled workforce [46, 47, 48]. In terms of research, the Ministry of Research, Technology and Higher Education (now Ministry of Education, Culture, Research and Technology) admits that Indonesia has a shortage of active researchers and has the insufficient infrastructure to support science and technology developments and research. It is suggested that given its population size that Indonesia needs 200,000 researchers to support research and development, and research training, there are only 24,000 researchers [47, 49].

University internationalization is slowly emerging in Indonesia when compared to developed countries and with comparable countries in the region such as Malaysia, which have developed an internationalization process in staffing, students, research, and teaching over many decades. State regulations for establishing an International Office in universities were only initiated in 2007. Kyrychenko [47] identifies several barriers to internationalization that include an absence of institutional autonomy and extensive bureaucratic controls and underqualified staff. A further challenge to employability, research development, and internationalization is the lack of English competency across staff and students [18]. Indonesia has low levels of English proficiency as compared to neighboring ASEAN countries such as Malaysia, Singapore, and the Philippines. The application of English as a medium of instruction and research is one of the critical elements for the internationalization of higher education.

Surisno [40] suggested that the barriers to internationalization are systemic and permeate throughout the Indonesia HE system which included the absence of a national unified and extensive policy program to support internationalization, while the government has proclaimed the desire to establish world-class universities in Indonesia, the details and the processes for achieving this goal have not been articulated. At the level of individual universities, Surisno [40] suggested that entrenched and rigid institutional arrangements inhibit innovation, including internationalization, and that university leaders lack the skills or track record to manage innovative programs, including internationalization.

8. Developing a policy program to support internationalization

The Indonesian Ministry of Education Regulation no 26/2007 and Government Regulation number17/2010 have been issued to encourage international cooperation and partnership in the Indonesian higher education sector by establishing the International Office or Office of International Affairs across universities. The function of the international office is to boost all internationalization dimensions from curriculum through to research. To achieve this objective, the first requirement is that there should be a clear case for internationalization. It is not an end but should be recognized for the material and qualitative benefits that are generated for individuals, local communities, and the nation. There is evidence that internationalization supports human capital and social capital development, and in the case of Indonesia contributes to longer-term development goals. Usoh [9] suggested that an internationalization model should include a suite of programs within universities that include:

“1) human resources development: the quality improvement of the university’s human resources will lead to quality graduates and high employability; 2) research development and potential collaboration; 3) skill and labour force; 4) upgrading facilities and infrastructure; 5) training, benchmarking and upgrading staff qualifications; and 6) national and international accreditation improvement.”

An internationalization agenda requires that the key stakeholders contribute and cooperate toward the process. The key stakeholders are the central government; regional governments; universities; and industry. Central government must develop and fund an internationalization agenda. It is important for developing the international and national levels of the agenda. This requires objectives, programs, and engagement. At the central level, international universities can be invited and supported to establish regional campuses and partnerships, including international research in trade and investment agreements, international staff can be funded for short-term appointments, and local staff can be funded to attend international universities to receive post-graduate qualifications, and internationalization can be built into funding and quality assurance models governing universities. Surisno [40] argued that the central government should support the establishment of international branch campuses, and especially encourage “leading” international universities to have a presence in Indonesia.

For regional governments, they can coordinate universities to establish international study and research hubs and provide infrastructure for international staff and students. Cooperation across universities can provide opportunities and resources to share visitors, research, and student programs. Indonesia can raise its profile within the region by cooperating across regional institutions and other national higher education systems within ASEAN (Association of South East Asian Nations) and more fully engage with international agencies to improve standards and to accredit the quality of programs [28].

Individual universities can develop programs and the institutional, program, and personal levels to internationalize the curriculum, organize staff and student exchanges internationally, provide scholarships for staff to acquire international qualifications, and sponsor international scholars for short-term appointments [9]. While the capacity and financial capability of universities differs, individual universities can achieve some internationalization. This could be, for example, through programs of student and staff exchanges; sharing international visitors across campuses in the same city; upgrading the curriculum to include international references and topics; upgrading staff qualifications; and participating in international research and teaching programs.

Industry support is required to assist in developing the curriculum and in identifying those attributes that are required to support graduate employability [19], but beyond this industry, engagement is important in funding and developing joint research with universities and with international agencies and international universities. Industry should be actively engaged with teaching and learning processes, but also with research programs, especially where there are opportunities for international collaboration. In turn, the national government can support university hubs and research clusters such as those found in Malaysia to attract international universities, students, staff, and investors [45].

Technological developments are changing all aspects of university teaching and research. Libraries are digitalized and online, and courses can be taught anywhere at any time through online teaching. Curriculum and teaching can be outsourced. Technology has transformed the sector, and the challenge is effectively utilize the technology to support core HE functions. Given the ongoing globalization of the sector, the market for HE is changing. It is not confined to post-school entrants, it is not confined to degree programs, it is not confined to local students, and it is not confined to local face-to-face delivery [3]. The globalization of the sector opens both opportunities and challenges for universities. McKinsey [3] stated that:

“From 2011 to 2021, the number of learners reached by massive open online courses (MOOCs) increased from 300,000 to 220 million. Between 2012 and 2019, the number of hybrid and distance-only students4 at traditional universities increased by 36 percent, while the circumstances of the COVID-19 pandemic in 2020 rapidly accelerated that growth by an additional 92 percent”.

McKinsey and Co. [3] went on to comment on the growth in the number of new for-profit providers in the sector in North America that are funded by venture capital. Implicitly, the sector is about to undergo a major structural transformation. For Indonesian universities, the challenge is to adapt and develop the potential of the technologies and to meet the potential global competition from online providers. This will require government and industry support, additional investment in IT and training, and extensive and reliable IT networks.

9. Conclusion

Internationalization of Indonesian universities can address personal and national developmental objectives. There are many elements and dimensions to internationalization. To date, there has been limited internationalization of the Indonesian HE sector. There have been political objections to processes of internationalization, especially involving overseas universities establishing campuses in Indonesia. These may be seen as threats to Indonesian culture and traditions, and agents of cultural imperialism, especially if the institutions were former colonial powers in Asia—the UK, France, and the USA [40]. However, as with other forms of direct foreign investment, Indonesia can impose licensing conditions on foreign university investment and require that universities meet local accreditation and quality standards. Other objections to internationalization could be the costs, the necessity, and the barrier imposed by Bahassa not being an international language of research and learning. On the costs, it is possible for low-cost approaches to be taken to internationalization that are regional and institutional specific, and in accordance with local circumstances [9]. Improving the quality and access to tertiary education are important priorities, and internationalization can be part of these important national programs.

Technological change will globalize the HE sector and offer opportunities and challenges to the sector. Globalization and internationalization do not require traditional processes of direct investment and campus delivery of programs. MOOTs can transform the industry and undermine the local competitive advantage of Indonesian universities. The challenge for universities is sustaining competitive advantage and realizing broader non-commercial objectives such as research and community engagement. Through online delivery, an international program can be created without requiring offshore campuses.

Indonesia can learn from and benchmark off other countries in the region and internationally that have extended international programs and international presence. Malaysia is an example of a neighbor at a similar development stage, with similar natural resources, and similar cultural and language conditions that have internationalized its HE sector. Within the region, wealthier economies such as Singapore, Korea, Japan, and Taiwan have extensive international programs including exchanges, training, collaborative research, and international campuses. China has actively and successfully developed an internationalization agenda for the HE sector that has led to the recognition of several world-class universities [50]. As previously reported, universities in Hong Kong were assessed as being among the most internationalized across the globe [35]. There are many examples of countries at different stages of development, with different histories and cultures, that have been able to successfully achieve some degree of internationalization. Benchmarking can be applied throughout the different levels and stakeholders in the HE sector. Sutrisno [40] suggested that Indonesia can learn from its neighbors, benchmark internationalization programs against countries and universities in the region, and extensively engage and collaborate regionally and internationally.