The rapid advancement of Artificial Intelligence (AI) has transformed workforce competency requirements and intensified the skills gap between educational outcomes and industry demands. This challenge requires human capital innovation to improve workforce readiness in the digital transformation era. This study aims to analyze the role of human capital innovation in addressing the workforce skills gap in Indonesia using a Systematic Literature Review (SLR). A total of 32 relevant scholarly articles on human capital, Artificial Intelligence, and workforce skills gaps in Indonesia were systematically reviewed. The data were analyzed through thematic synthesis to identify major challenges and competency development strategies. The findings indicate that the skills gap is primarily caused by the mismatch between educational curricula and industrial needs, limited AI literacy, and inadequate digital competencies among workers. The most frequently identified strategies include curriculum transformation, continuous upskilling and reskilling programs, strengthening AI literacy, and collaboration among government, higher education institutions, and industry. These findings suggest that adaptive human capital development supported by lifelong learning is essential for enhancing the competitiveness of Indonesia's workforce and ensuring successful adaptation to the rapid changes brought about by Artificial Intelligence.
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