Do Technological Developments Reduce Unemployment in Indonesia?

摘要

Such rapid technological development will affect the absorption of labor in the industry and have an impact on increasing unemployment. Indonesia is among those who have to think the most about the impact of the technological development because in the next 15 years the population could reach 280 million; and could grow again to 300 million. This study is aiming to explore the effect of technological development on unemployment rate in Indonesia. The investments are used as the control variables. Panel Least Square analysis is used to find the effect. According to the analysis; it is found that technological developments positively affect the unemployment in Indonesia. It means that in Indonesia; technological development creates technological unemployment. Generally; the labor force in Indonesia has not yet been ready to face the development. The result also show that only the people in Sumatra; Java; and Bali which the islands where the development of human resources can keep up the technological developments. The result is in line with many people's predictions that technological development can create more unemployment. In order to solve the problem; it is suggested for government to conduct training skill in the application of technology. By conducting new skills training in the application of technology; it is expected that the training is able to withstand the potential of labor forces who cannot be absorbed.