Jakarta, INTI - An expert from the National University of Singapore (NUS) Business School, Professor Johan Sulaeman, has urged the Indonesian government to prepare a strategy to address the rapid development of artificial intelligence (AI), which could significantly affect the labor market and potentially undermine the benefits of Indonesia’s demographic dividend.

Johan said the rise of AI should be addressed through employment policies, stronger education systems, and skills training to ensure that Indonesia’s large working-age population does not become a demographic burden due to limited employment opportunities.

He made the remarks during a media discussion at NUS Business School in Singapore on Wednesday, October 7, 2026.

“In my view, the government should neither be overly enthusiastic nor fearful about artificial intelligence. Instead, it needs to take the time to develop the right strategy for dealing with AI, particularly from the perspective of the workforce,” Johan said.

Indonesia’s Demographic Dividend at Risk as AI Reshapes Employment

Johan explained that Indonesia’s demographic dividend must be supported by the government’s ability to provide sufficient employment opportunities.

A large working-age population can generate economic benefits only when people have opportunities to work and contribute to productive activities. Conversely, a growing population without adequate employment could create a range of social and economic challenges.

AI is expected to create two major possibilities for the labor market: increasing worker productivity or replacing certain tasks and jobs previously performed by humans.

This has become a particular concern for young people entering the workforce, as they face greater uncertainty over the availability of jobs in the future.

Johan said AI development should focus on helping people enhance their capabilities and productivity rather than simply replacing human workers.

This approach is often referred to as pro-human AI, which emphasizes using artificial intelligence to augment human capabilities.

“However, the speed of AI development today suggests that reaching truly human-centered AI may be difficult because AI is advancing so rapidly that it could instead seek to replace us. That is the concern,” Johan said.

Johan, who also serves as Director of the Sustainable and Green Finance Institute (SGFIN) at NUS, noted that countries such as Indonesia and India face significant challenges because their workforces are not yet fully prepared for the pace of technological change.

Education and AI Training Crucial for the Next Generation

To address these challenges, Johan emphasized the importance of strengthening Indonesia’s education and skills-training systems.

Education should not only introduce students to AI technologies but also equip them with the ability to use these technologies effectively.

Future workers also need to understand the limitations of AI so they can determine when and how the technology should be appropriately applied in different areas of work.

Such preparation will be essential to improve the workforce’s ability to adapt as technological developments reshape industry requirements.

Meanwhile, Professor Sumit Agarwal, Low Tuck Kwong Distinguished Professor of Finance, Economics and Real Estate at NUS Business School, said the impact of AI on employment remains widely debated across countries.

According to Sumit, even the United States has yet to reach a consensus on the government’s role, the appropriate regulatory framework, and AI’s potential impact on job creation and displacement.

He noted that AI differs from earlier general-purpose technologies such as the internet and electricity.

“AI can develop on its own, and that is why we do not yet fully understand how dangerous AI could be in terms of replacing jobs,” Sumit said.

Sumit said universities need to prepare students with skills aligned with labor-market needs so they can remain competitive and maintain access to employment opportunities.

Beyond education, industries also need support in adopting AI to improve operational efficiency.

This would help ensure that the benefits of AI adoption can extend to workers, students, and businesses.

Regional AI Regulation Faces Challenges Across ASEAN

Discussing regional policy, Johan said establishing a common AI regulatory framework across Southeast Asia would face significant challenges.

Differences in economic development among ASEAN countries are one of the main obstacles to creating rules that can be applied uniformly across the region.

Policies designed for Singapore, he noted, may not necessarily be suitable for Indonesia, Laos, or Cambodia without adjustments to reflect their respective economic and development conditions.

“These differences in levels of development make it very difficult for us to reach an agreement,” Johan said.

He also expressed doubts about the prospects of ASEAN reaching a comprehensive agreement covering sustainability, human development, and AI technology development.

Johan said each country has different economic development priorities, meaning technology policies need to take national circumstances into account.

Nevertheless, he encouraged Southeast Asian countries to strengthen dialogue and exchange perspectives on AI’s impact on their economies and societies.

According to Johan, bilateral cooperation between two countries may be easier to establish than a single regulatory framework covering all ASEAN members.

Through greater dialogue and cooperation, countries in the region can better understand the challenges posed by AI while developing strategies suited to their individual development needs.

For Indonesia, strengthening employment policies, education, and skills development will be critical to ensuring that AI advances productivity without overlooking the need to create sufficient employment opportunities for its growing working-age population.

Conclusion 

Indonesia needs to prepare its workforce for the rapid development of AI through stronger education, skills training, and employment policies. By focusing on human-centered AI, the country can pursue technological progress while ensuring its demographic dividend remains an economic opportunity.

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