Given the varying levels at which the Southeast Asian countries have grown offers an insight into how key certain government bodies and policies can help mitigate problems that arise in an economy marked with rapid change
Market coordination has been a vital aspect of how economies operate, grow, and are able to share the benefits of such growth in a uniform fashion. But with market structures getting more complicated, institutions and policies intended to facilitate such coordination are becoming more important. This is true not only when it comes to ensuring economic benefits are distributed, but also when it comes to enabling the corporation to find proper, regulated access to the various factors of production, chief among which today is accessing the right human talent.
Given the varying levels at which the Southeast Asian countries have grown offers an insight into how key certain government bodies and policies can help mitigate problems that arise in an economy marked with rapid change. Today the region is poised to grow at rates comparable to India and China.
This shift is partly to be driven by human labor as most of the countries in the region find themselves with large, albeit often untrained workforce. This too varies from country to country in the region as many have had their own journeys to economic and socio-political growth. But to weather and make most of the opportunities and threats that lie ahead the region has to have greater coordination and development of local talent.
Intra country initiatives
One of the most essential ways to ensure that the workforce of the region is prepared for the incoming technological shift in global economic hegemonies is to equip them with the necessary skills. This need has already been recognized by the various countries in the region and many have, in their own ways, attempted to tackle the problem. From Thailand to Singapore and the Philippines and Vietnam in the east, each nation has begun linking their education and skilling initiatives to the procurement of better-paying jobs in fields that enables respective countries.
Although such measures have been executed with varying degrees of success, there timing couldn’t be apter. Southeast Asian markets today stand on the precipice of technological impact. According to a recent UN estimate 137 million people (more than half these nations’ workforces) in Cambodia, Indonesia, Thailand, Vietnam, and the Philippines risk losing their jobs to automation over the next two decades. These jobs are estimated to be almost exclusively lower-skilled jobs in manufacturing, retail, and similar industries. Many experts fear if proper education and skilling programs are not provided in an efficient manner now, a significant portion of that estimated number might get pushed into more vulnerable and low paying jobs and as a result be prone to more workplace exploitation and abuses.
But it's not only the comparatively low skilled labor intensive countries that might face the brunt of incoming tech disruption. Countries like Singapore which today boast a higher percentage of skilled workers compared to other nations in the region is estimated to have a significant impact on the current employment levels due to AI, rapid digitization, and the onset of automation technologies. This overall skill-shortage in the region has meant that today startups, one of the most contemporary ways to leverage human talent and technology to create new age companies, have become scarce in the region. By creating better skilling programs within their countries, the attempts to bridge the gaps are truly the need of the hour.
The next step within the region to ensure its ability to reap the benefits of its growing working population —one that in the next couple of years is going to only be behind the likes of China and India— is to enable greater knowledge sharing between the countries in the region. Although many have marked differences in their histories, the different countries marked with their different cultures, socio-economic setup, and labor practices are all united in face of a changing nature of work. Technological shifts like automation, for example, is predicted to have a major labor displacing impact on the various countries in the region. Traditional arguments against such labor displacing tendency of automation in the region was that the labor wages would remain low enough that it was advantageous to maintain traditional workforce structures and as a result have low associated operational costs. This has since been proven wrong with the World Bank recently stating that the labor in developing countries faces a higher threat and vulnerability to automation due to a higher percentage of them involved in low skilled jobs. Thus automation is predicted to have a significant impact on the region. Out of the UN estimate mentioned earlier, Vietnam is predicted to face the major brunt with around 70 percent of its workers being under a ‘high risk’ category when it comes to automation.
To limit, and to an extent, offset such an impact of collaboration within the nation states in the region would yield in the easy flow of data, knowledge, talent, and access to markets which can greatly benefit the region to capitalize on its growing human resource base. If done prudently and cautiously, it can also help boost the local startup scene within these countries and accelerate the rate at which these economies are growing. It also helps balance the aspiration of countries with big labor markets but low skilled workforce like Vietnam and Cambodia with countries like Singapore who have traditionally depended upon developed markets for their products.
The intent of establishing the ASEAN regional block was to facilitate this exact cross sharing of knowledge and resources. And there have been many areas where this has indeed become a reality. From cybersecurity to fostering investments routes and technical know-how, the region has already begun creating better and more robust pathways to collaborate.
As factors that affect almost all the entire region, albeit, in varying degrees, none the less remain the same, a greater cohesion within south-east Asian countries would prove to be beneficial in face of changing global economic conditions.