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How Indonesia’s pre-employment card program is boosting the edtech sector

Analysts see only limited long-term benefits for the industry, as participants might just be seeking cash incentives.

Nayoko Wicaksono used to offer classes only at his training center in South Jakarta. The edtech startup Algorit.ma, that he co-founded, initially focused exclusively on offline training, as the data science modules were seen as not ideal for remote learning. But now it has shifted to an online program.

“Online is a new thing for us,” Wicaksono told KrASIA. “We’re adapting for this. We can’t see whether it will increase the business or not.”

So far, traffic seems to be growing. Algorit.ma has created some online modules and is collaborating with trainers in Singapore, where users can claim the course fees from the public SkillsFuture initiative. Looking at the high interest from the northern neighbor, Wicaksono thinks his startup can do likewise in Indonesia, where the government recently launched its own incentive scheme, called the pre-employment card.

Initially an election campaign promise of President Joko Widodo, the program has been adapted to support employees and small business owners affected by COVID-19. Participants receive discounts for skills training and a cash aid after completing the courses.

“We’d like to participate in the program,” Wicaksono said. “Definitely a lot of people will want to learn. However, they are prioritizing basic courses right now, like language tutorials and public speaking. Our modules haven’t appeared yet.”

Algorit.ma is one of hundreds of edtech startups and training institutions with high hopes of the program. The government counts on the technical expertise of eight digital partners, starting with the big e-commerce players Tokopedia and Bukalapak, as well as Skill Academy by Ruangguru, Pintaria, MauBelajarApa, Pijar Mahir, Sekolahmu, and Sisnaker, a platform launched by the Ministry of Manpower.

Cakap is already feeling the effects. The language learning app recently announced a partnership with Indonesia’s hotel and restaurant association PHRI, who already signed up 69,000 of its members to the program, with more to follow in the next phase.

Tomy Yunus, co-founder and CEO of Cakap, revealed that there is an increase of interest from students and employees since February when the government initiated its COVID-19 measures. Yunus didn’t disclose any revenue numbers, but he expects traffic to increase at least fourfold, thanks to the program.

Tomy Yunus, co-founder and CEO of Cakap. Photo courtesy of Cakap.

Pintaria, a learning and career portal launched by HarukaEdu, anticipates revenues from the pre-employment card to overtake those from regular modules.

“We hope for a positive contribution to our revenue,” said Gerald Arrif, chief partnership officer. “Besides the regular degrees and skills training, the most popular contents on our platform are now those that help people who got retrenched or are out of their jobs, such as ride-hailing drivers.”

Industry experts see the positive aspects, but also have some doubts. Aldi Adrian Hartanto, vice president of investment at MDI Ventures, said that the program could kick-start a new trend like the Udemy model—a commercial online learning platform connecting instructors with students—and expects more companies to join.

Only a short term lift?

“It will certainly help edtech startups to get more users and revenue in the short term, but the card holders might not be the right target for them, so the benefits in the long run will generally be limited,” Hartanto said.

Hartanto is skeptical about the impact overall, as the majority of applicants are in for the cash, not to upscale their skills.

This is the case for Siti Latifah, a 30-year-old motorcycle taxi driver, who is mainly looking for a compensation for her lost revenue, which has dropped 80% during the pandemic.

“I hope that I can disburse the money from the card,” Latifah said. She doesn’t think English tutorials will help her and her colleagues a lot. They rarely take foreign tourists in Jakarta.