Forecasting vocational workforce readiness in Indonesia’s new capital: A system dynamics and foresight approach

Abstract

This study aims to forecast how the relocation of Indonesia’s new capital to East Kalimantan will impact regional economic development, labor market dynamics, and vocational education readiness. Employing an integrated system dynamics and foresight methodology, the study models the interdependencies among economic transformation, industrial shifts, and future workforce requirements. The analysis combines qualitative foresight data, gathered through in-depth interviews and focus group discussions with 66 key stakeholders (16 government and education policymakers, 30 leaders of large industries, and 20 SME representatives), with system modeling to simulate long-term trends and policy impacts. The simulation results indicate a significant structural transition from a resource-based economy to a service-oriented and low-carbon economic model, leading to a sharp projected increase in labor demand across green and digital-intensive sectors. These projections underscore the urgent need for a vocational education system that is more adaptive, technologically relevant, and environmentally aligned. However, anticipated challenges such as persistent skill mismatches, inadequate stakeholder engagement in policy design, and outdated curricula may hinder vocational institutions from effectively responding to emerging labor market demands. This study highlights the strategic importance of modernizing vocational education and establishing stronger collaborative frameworks among government, industry, and educational institutions. By forecasting workforce readiness under multiple development scenarios, the research provides actionable insights to support evidence-based policymaking and the creation of a resilient, future-oriented innovation ecosystem in East Kalimantan.