[adning id=”12070″]

[adning id=”12070″]

For Southeast Asian employers, the Fourth Industrial Revolution is a chance to create jobs

Companies deploying Fourth Industrial Revolution technologies, and investing in reskilling and upskilling for digital occupations, are likely to recover faster from the impact of the pandemic.

The pace of technological advance has accelerated in the last decade, with new technologies such as robotics, artificial intelligence, additive manufacturing, materials engineering, and synthetic biology pervading economies and societies. The power of computing has grown exponentially with data becoming the new gold.

These disruptive technologies are leading a transition to the Fourth Industrial Revolution (4IR), a much-debated subject in recent years. The economic potential of 4IR has been widely extolled, and equally worries about extensive job losses from automation and artificial intelligence have been abundant. However, the pace of change is inexorable and it is evident that these technologies are completely transforming many sectors such as healthcare, transport, and agriculture, beyond the manufacturing sector.

These Fourth Industrial Revolution technologies will have major implications for education, training and skills development in countries in Asia and the Pacific, with the supply of skills needing to align with the demands of the new economy. This is particularly salient for developing countries in Southeast Asia, such as Cambodia, Indonesia, Philippines, and Viet Nam, which are likely to face work disruptions due to automation and robotization in manufacturing.

Our research, which looks at the impact of the Fourth Industrial Revolution on employment in Southeast Asia, shows that new technologies drive higher productivity, which is the foundation for better-paid jobs and economic growth. Our findings put forward an optimistic view on jobs.

While application of 4IR technologies will lead to job losses, our study argues that they could be offset by creation of new jobs from productivity increases and higher incomes. Productivity gains from new technology leads to reductions in the prices of goods and services, raising demand in the process.  The increase in demand ultimately leads to more jobs being created.

Based on employer surveys, we found large potential returns to businesses arising from productivity increases from 4IR technologies. Key insights from the four countries studied include the following:

In Cambodia, we examined the garment and tourism industries and found that 4IR technologies will eliminate jobs in both industries, but these would be offset by an increase in demand arising from higher productivity, potentially generating net job increases of 39% and 2%, respectively.

In Indonesia, we focused on the food and beverage (F&B) and automotive manufacturing industries. Our research found that 4IR technologies will eliminate jobs in F&B and automotive manufacturing industries, but these would be offset by creating more labor demand, generating net job increases of 41% and 30%, respectively.

The overall impact on jobs can be good, but there are no guarantees that displaced workers in the region will be able to move seamlessly
into new jobs without adequate skills.

The study examined the IT business process outsourcing sector and electronics manufacturing industries in the Philippines, and found that while 4IR technologies will eliminate around a quarter of jobs in both the industries, these would be more than offset by new jobs resulting from a net increase in labor demand in both sectors. Automation will disproportionately impact men in IT-BPO, and women in the electronics manufacturing industry.

In Viet Nam, the study examined the logistics and agro-processing industries and found that 4IR technologies will eliminate between a quarter and a third of jobs in these industries, but these would be more than offset by new labor demand, which could lead to positive job gains in both sectors.

The overall impact on jobs can be good, but there are no guarantees that displaced workers in the region will be able to move seamlessly into new jobs without adequate skills. In fact, employers in all industries surveyed stressed the importance of skills in the context of disruptive technologies. Together, they could need an additional 169 million people, which is 67.7% of the total labor force in the four countries, to be trained by 2030 to prepare for the transition to 4IR.

Our research revealed mismatches between training institutions and employers on the perceived readiness of graduates for the workplace. While 96% of training institutions surveyed in Indonesia believed their graduates were well prepared for work, only 33% of food and beverage manufacturing employers agreed. In Cambodia, almost 90% of surveyed employers reported that graduates were inadequately prepared for entry-level jobs.

We recommend upgrading training delivery through the application of 4IR curriculum and technology in classrooms and training facilities in close collaboration between industry and training providers to strengthen workforce readiness. The survey of training institutions revealed limited use of advanced technologies such as virtual and augmented reality and online platforms for training delivery.

New approaches are needed to strengthen inclusion and social protection for entry level workers, those at risk of job displacement, and those who need upskilling, with special attention to women. According to IT-BPO employers in the Philippines, manual and administrative jobs which are typically held by women are likely to see the largest losses, while females in Cambodia’s garments industry are more likely to be affected.

We also recommend strengthening on-the-job training and skills development for the jobs of tomorrow.  Training institutions will do well in developing industry-led technical and vocational education and training (TVET) programs with dedicated credentials for 4IR, and flexible and modular skills certification programs that recognize skills attainment outside of traditional education channels.

While the pandemic is accelerating digital transformation, the study finds that companies deploying Fourth Industrial Revolution technologies are likely to recover faster from the disruptions caused by the pandemic and be more resilient in the future. Investing in reskilling and upskilling for digital occupations may also facilitate speedier return to labor markets for displaced workers.

Share on facebook
Share on twitter
Share on linkedin
Share on email
Share on print

Leave a Comment

Your email address will not be published. Required fields are marked *