Licensing construction workforce: Indonesia's effort on improving the quality of national construction industry

Purpose – The paper aims to describe the challenges faced by a developing country (case of Indonesia) in the effort to improve the quality of national construction industry through “certification” requirement for professionals and skilled labors. It also aims to identify root problems and propose a recommendation for rethinking the “certification” systems. Indonesia's experiences can be regarded as lessons learned by other developing countries struggling to strengthen their construction industries. Design/methodology/approach – The study is based on an exploratory study including a focus group discussion with stakeholders representing the various professional associations, construction company associations (contractors and consultants), the Ministry of Manpower, and the Ministry of Public Works. An analysis based on the findings about implementation issues of “certification” requirement resulted in the identification of the root problems and the recommendation for restructuring the system. Findings – The paper provides empirical insights about how “certification” requirement for all professionals and skilled labors have been implemented in a developing country. Although the requirement seemed to be tactical, it resulted in a circumstance in which there are numerous types of highly specialized certificates/licenses. The mechanism in the administration of these licenses has been problematic because of institutional issues, i.e. the extensive authority of the Construction Services Development Board and the inadequate controls from the government. Research limitations/implications – The recommendations may lack details and practicality, while the recommendation for rethinking and restructuring requires changes of fundamental conceptions in all stakeholders. Practical implications – The paper includes recommendations for the development of Indonesia's construction industry. The recommendations include the distinction between voluntary and mandatory certificates, putting more authority back to the government in the administration of the mandatory certificates/licenses, and the establishment of an independent licensing board. Other developing countries can learn from Indonesia's experience. Originality/value – This paper fulfils an identified need to rethink the certification/licensing system.