Automation and Disruptive Technologies Will Soon Replace Lower-Skilled Jobs in ASEAN

July 11, 201610:13 am813 views

A new study by the ILO Bureau for Employers’ Activities examines how technology is affecting workplaces in five major sectors across the Association of South East Asian Nations (ASEAN) and the transformation that enterprises and workers can expect in the next decade.

The report on ASEAN in Transformation: How Technology is Changing Jobs and Enterprises found the potential for growth and employment presented by advanced technologies, such as additive manufacturing, robotics and the Internet of Things (IoT), are considerable.

The report provides critical data on how millions of jobs are going to be impacted in the run up to 2025. However it also points out the opportunities for industries, and specifically how the government, enterprises and educational institutions should collaborate to upgrade workers in ASEAN from being low-skilled to high-skilled.

More than 60 per cent of enterprises surveyed see these technologies as a positive for increasing sales, labour productivity and employment of highly skilled workers.

The research, based on two ASEAN-wide surveys of more than 4,000 enterprises and 2,700 students, and qualitative interviews with more than 330 stakeholders in ASEAN and beyond, examines how technology has an impact on workplaces in the sectors of automotive and auto parts; electrical and electronics; textiles, clothing and footwear; business process outsourcing; and retail.

According to the study, the robot age is already a reality among ASEAN manufacturers who have been incrementally introducing robotic automation to improve productivity, quality, consistency, and workplace safety.

Critically, widespread use of robots does not automatically lead to job replacement. Current trends reveal robots being deployed in a human-centric, collaborative way to raise the productivity of higher skilled workers, rather than replace them.

However, in labour-intensive sectors such as textiles, clothing and footwear, which provide more than 9 million jobs in ASEAN, the majority of whom are young women, the situation is different. Here, lower skilled jobs are particularly vulnerable to disruptive technologies, like additive manufacturing and automation.

This could reduce export growth as destination markets in Europe and the United States bring production back home. The subsequent social consequences could be particularly significant for some ASEAN economies such as Cambodia and Viet Nam.

The report warns that while mass scale job displacement is not imminent, the technology to replace mainly lower skilled jobs in ASEAN will increasingly be adopted as its cost declines and innovations become accessible to even small-sized enterprises.

The report estimates that about 56 per cent of all salaried employment in Cambodia, Indonesia, the Philippines, Thailand and Viet Nam, is at high risk of displacement due to technology in the next couple of decades.

Deborah France-Massin, Director for the ILO’s Bureau for Employers’ Activities said: “Countries that compete on low-wage labour need to reposition themselves. Price advantage is no longer enough. Policymakers need to create a more conducive environment that leads to greater human capitalinvestment, research and development, and high-value production.”

It is recommended that workforces be appropriately trained with sound core skills that allow them to adapt as well as strong technical skills to handle new technologies and work effectively alongside digitalized machines.

However, according to the research, while enterprises across the region are increasingly seeking workers with science, technology, engineering and mathematics (STEM) qualifications, young people -in particular young women – are not choosing to study STEM subjects. Only 17 per cent of female students surveyed indicated they were doing STEM courses.

The research underlines the challenge facing policymakers, enterprises, and workers in navigating the transformative changes in labour markets, particularly in developing systems for skills and training that can prepare the future workforce with the technical and core skills they need to cope with the coming changes.

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