How Industry 4.0 might reshape jobs in ASEAN countries
All parts of today's modern lives are touched by one technological advent or the other. From the morning news search on mobile handsets to the late night binge sessions, technological advancements have found multitudes of commercial application; often reaching points where many in the developed parts of the world (owing to relatively higher dependence on many of such applications) have chosen to willingly ‘de-toxify’ themselves of such a dependence. Much has been written how increasing commercial application of technology and the advent of the usage of AI and machine learning might render many totally dependent on such devices in the coming years.
But that remains a problem for another time. Today we look at how a different side to the story of technological impact on day to day to lives—the part that speaks of its active impact in reshaping how businesses function today. And a key part of any such story is its impact on how job structures and qualifications change as a response.
When it comes to southeast Asian countries factors such as demographic change, increasing urbanization increase the projected impact that technological disruption from automation, digitization, and AI is bound to have on what jobs entail today. The impact would to a large extent define how these countries are able to create jobs and ensure that their companies are able to maintain current levels of productivity. Although such changes in the external environment are also bound to create opportunities for ASEAN members in the years ahead, the threats of facing its challenges ill-prepared could be disastrous. To ensure that the growth momentum that many of the member countries have been experiencing the Mckinsey report elaborates on three key areas that’ play a major role in coming times— something that regional policymakers and business heads will need to keep a close tab on—-these areas being: the role of digitization to increase productivity, changing nature of work and rules of engaging with labor force and infrastructure development keep pace with evolving business needs. To structurally plan for such issues is to leverage the opportunities such projections have in supporting and renewing the productivity growth. The report notes that “with the right vision, bold investment, and adaptive policies, ASEAN countries could continue to outperform, doubling total GDP to nearly $5 trillion.”
The impact of technology
Technological adoption today is one the most important factor that is actively reshaping jobs in many parts of the world. Given the nature of business and economy in the ASEAN region, many have speculated the region to one of the most affected places. Reports have projected various estimates on the final number of jobs that adoption of AI, digitization, and automation would impact. According to one such estimate, up to 28 million workers could be displaced in the region over the coming decade.
But the scale of this impact is also estimated to vary. While Indonesia might lose somewhere around 9 million to 17 million —the latter a Mckinsey estimation— by 2025, countries like Singapore who traditionally have had access to comparatively limited working population could see almost 21 percent of the labor force displaced.
As the impact of automation spills across both high and low skilled jobs, it's majorly low skilled jobs that are bound to get replaced by faster, more efficient machine-driven production. This trend is already being witnessed in many of the labor intensive markets in the world like India and China. Countries like Vietnam and Cambodia who still have a major portion of their workforce (especially women) working in what can be categorized as a’ low skill’ job, face the threat of many of them becoming obsolete.
Vietnam Deputy Prime Minister Vu Duc Dam said that this was a problem his country was already facing. “Many of these jobs will be replaced, especially those that are very popular in Vietnam, such as textile and footwear construction, electronics manufacturing, factories or even secretaries,” noting that these jobs often employed women. “We are having to retrain them to give them new skills or move them to other professions” he added.
Demographic and skilling problem
What complicates the future of jobs further in the region is demographic and skill mismatch that is prevalent in the region. Although the ASEAN region has for the past few decades witnessed substantially high growth rates, much of it, for countries like Singapore, has come on the back of a slowly aging population. A population that according to many has become a demographic time bomb.
Countries like Singapore are projected to reach a point where their percentage of senior citizens will hit 27 percent, while the population of adolescents will decrease to 10.8 percent - roughly where Japan is today. To put this into context, Japan over the years has reportedly been losing trillions of dollars in their GDP and millions of workers due to an ailing population. Countries like Singapore might reach the same point given its low fertility rate and an aging population. To maintain the country’s productivity levels, job structures and portfolios have to be modified and expanded to include to more workers, including ramping up the hiring of immigrant labor, while keeping up the with the pace of 'technological business transformations.'
But compared to Singapore, other countries like Vietnam, Philippines, and Indonesia boast a relatively young population, much of whom are part of the countries workforce. But in times where skill requirements seem to be changing quite fast, to remain employable, many require government intervention to ensure that they have access to reskilling initiatives.
ASEAN member states are poised to grow both in economic terms and in terms of their demographic diversity. While countries like Singapore and Malaysia today face internal labor shortages and often depends on migrant working populations filling in the required gap, other nation states like Cambodia and Vietnam have an increasing working population. To further facilitate the impact of a technological shift is the unequal distribution of skills and opportunities to make the best of Industry 4.0. Given its projected growth potential, how job structures and its access responds to such changes would be key to economic well being in the region.