The Promise of Blockchain in the New Paradigm for Skills Development

A close-up of a pair of hands tapping on a computer.
As blockchain makes inroads into the education sector, it is important to make use of such technology to build synergies with the labor market toward an inclusive future of work. Photo credit: ADB

With support from the Asian Development Bank (ADB), Indonesia launched a digital credentialing system that allows students to source credit-bearing online courses from the Indonesia Cyber Education (ICE) Institute, a marketplace for quality-assured higher education courses from participating local and international universities.

The ICE Institute system is enabled by blockchain technology, which helps build trust in the system of accredited and verified issuers of credentials. At the same time, this allows ICE Institute to offer transferrable online courses, which are linked to the registration and verification credit system in higher educational institutions, to the skills set database, and in the future, to the job market—paving the way for a fair and transparent recognition of skills and educational experiences of Indonesian students while enhancing their school-to-work transition.

Higher education in the digital era

The proliferation of massive open online courses (MOOCs) has spawned an open learning movement, empowering learners to access educational resources and acquire knowledge and skills anytime and anywhere. Spurred by the coronavirus disease (COVID-19) pandemic, the demand for educational technology solutions, including MOOCs, skyrocketed amid emergency closures of schools and universities. Soon after the Indonesian government enforced a nationwide lockdown, majority of the higher educational institutions in the country switched to the online modality. The digital momentum is expected to persist as learning institutions move to a hybrid model in the new normal. 

To capitalize on the gains brought by digitalization, an ADB paper stresses the importance of reshaping tertiary education systems to make sure that capabilities attained through digital learning are validated and recognized.  

The new learning landscape also offers an opportunity to better harness the advances in digital technologies to address the mismatch between the skills available and labor market needs. An ADB study finds that employers in key sectors in Indonesia report a scarcity of graduates with job-ready skills. 

By building formal structures for accreditation of online courses completed by students outside of their own universities, they may be inclined to participate in more upskilling opportunities online while enabling them to utilize their knowledge and expertise regardless of where the skill acquisition took place.

Flexibility to advance learner mobility

Indonesia’s Freedom Learning, Freedom Campus initiative seeks to reform its higher education sector in preparation for the Fourth Industrial Revolution (4IR) and facilitate flexible learning pathways for Indonesian students. ADB supported the Ministry of Education and Culture to create the necessary conditions in which digital technologies are leveraged for recognition of skills and qualifications within and between higher education institutions in Indonesia and abroad. In parallel with setting a national higher education policy to establish online learning’s receipt of credit for academic qualification, Indonesia formed ICE Institute as a platform for a consortium of university online course providers to allow students to earn credit through online courses, which will be stacked or aggregated with courses taken at their own university to form up to 40% of all courses toward their chosen degree program. 

Launched in July 2021, ICE Institute now has more than 1,500 online course offerings from 14 Indonesian national partner universities and edX international content partner universities, including the Massachusetts Institute of Technology. These online courses undergo ICE Institute’s quality curation process to assure the design of online learning experience, validity of content, and interoperability.

Connecting the worlds of education and employment

The Indonesian government recognizes the importance for institutions to connect and create a seamless network where they can exchange credentials, enhance the transparency of information, and accelerate student mobility. A digital credentialing system registered on blockchain allows secure records of educational attainment, accessible and distributed across many institutions. 

A paper by ADB outlines the benefits of credit transfers, among which are accessibility and affordability advantages to students. Learners can tap into quality educational resources from global experts and professors and reduce the unit cost of credit-bearing courses. For universities, online course credits can yield increases in enrollment without the need for expansion of physical facilities. 

As blockchain makes inroads into the education sector, it is important to make use of such technology to build synergies with the labor market toward an inclusive future of work. With employers looking for clear evidence of in-demand skills, digital credentials can allow them to find the right candidates and verify their records more easily, thereby streamlining the processes and costs of recruiting. For example, the ICE Institute system will be linked to the job market to map the skills of graduates in relation to the requirements of employers.

Given the renewed interest in digitalization and its integral role in the education sector, the need to transform credentialing methods has become all the more pressing. However, countries in Southeast Asia may face challenges in designing quality assurance mechanisms especially since this approach to credentialing is nascent. Still, it is important for countries to create an enabling environment for credit recognition of online courses as part of their recovery efforts because of its potential to bring opportunities to people who might otherwise be left behind by the disruptive changes of 4IR. 

In this new paradigm for skills development, digital credentialing can improve the flow of data between educators and employers while empowering job seekers to translate educational outcomes into economic opportunities, leading to a more coordinated and inclusive education-to-employment ecosystem. 

Deploying technology solutions like blockchain to foster Southeast Asia's recovery was among the topics discussed during #SEADS2022 held on 16–17 March. Watch recordings.