Devadas Krishnadas is the managing director of Future-Moves, a strategic risk consultancy. The views expressed below are his own.
The Committee of Supply (COS) debate following the release of Budget 2014 is an opportune time to look at the future of work.
The progressive substitution of labour with automation has been the backbone of modernity, and as this process continues, we should be looking ahead to consider the challenges to the work force in the years ahead.
This commentary looks at considerations which should be occupying policy makers and union leaders as to what policy or individual action could be taken to better prepare our work force for future conditions.
The Future of Work
The future of work is going to be a continued narrative of technological substitution for labour. And what will continue to occur is that ever higher skill and knowledge categories of labour will be taken over by technology. Where automation was the mode of change in the past, artificial intelligence will be the characteristic of change to come.
Highly skilled occupations such as finance and professional services such as the law, accounting and medicine, which have historically been bulwarked against technological substitution, will find themselves finally facing the reality that other occupations long ago confronted. As a first instinct they will doubtless rely on the bargaining power of their professional bodies, in the same way unions for semi and minimum skilled labour have done before, to keep competition at bay.
Except competition will not be from other sources of labour but from the intelligence of advanced computing systems that are able to think, learn and apply. Instead they should be embracing technology, after appropriate testing and certification, to make their profession more efficient and higher value-add. Our Research, Innovation and Entreprise or RIE plans should place emphasis on giving Singapore a head start in these areas.
Workers will also need to recognise that while education and skills are of ever greater premium, the marginal return on education will continue to diminish for all except the most demanding, highest level and specialised. Thus the old axiom that being a graduate is the passport to the middle-class will soon be no more.
However, not having a degree will almost certainly ensure that one will be in the under-class. In other words, the education floor to earn a basic wage has and will continue to rise. Our education approach should ensure that quality of education is prioritised over the quantity of education. This is because as the supply of graduates becomes more abundant, the discriminate factor will be the capability of the graduate and not the simple fact of being a graduate.
Third, the government should continue to tighten labour supplying the minimum skilled segment. This would create the necessary pressure on firms to embrace productivity improvements.
Nevertheless, much of these labour categories – waitering, hospitality and caring services – are inherently labour intensive. A severely tightened supply of labour for this segment will help push up wages to or above a living wage. It will also incentivise more Singaporeans, whose educational levels are not high, to join such categories and to professionalise them with pride in service with the satisfaction of making a reasonable wage. Those who are good with their hands – chefs, plumbers, electricians and mechanics – will also find themselves in a “sweet spot” as it will take a long time before technology can substitute this segment of work. Our vocational training institutes should continue to receive considerable support to produce competent vocational labour.
Government policy towards education and skills training has to be formed at making it more practical for adults to learn. All workers, from professionals to the minimum skilled, will have to relearn several times in the course of a career.
In the case of many, their specialisations will be overtaken by technology in the course of their work lives and they will need to transition to other skilled areas. Unless adult learning is made available in a form and at a cost which makes it possible for those with financial and family obligations to undertake training in a timely fashion, they will not be ready when the reality hits. The consequences for such a lack of preparation will be structural unemployment or underemployment.
The work already being done by the Workforce Development Agency (WDA) on worker up-skilling,MOE with pre-market labour preparation and sector and firm level focused agencies such as EDB,SPRING and IE Singapore should be better integrated. This would give our upstream (MOE) and parallel stream (WDA) agencies early warning of what skills and knowledge sets will be in demand and which are waning and adjust their supply of education and training more nimbly.
Frictional unemployment may well be an occasional reality for many workers in the future even if we have good adult knowledge and skill provision in place for the labour force. Both workers and government need to accept that they have to think ahead to how to deal with such episodes with the longer term in view. Workers should embrace training and learning whilst they are employed and not wait to become outmoded by technology or out-priced by international wage competition. Government should consider the provision of short term unemployment insurance as an assistance measure to support workers through these tough episodes. Doing so is not about “rewarding laziness” but about limiting the social fall-out from unemployment.
Challenging as the future of work will be, government and workers still have considerable autonomy over the future. Such autonomy is conditional on two streams of action.
The first is about the things that they do – are we prepared to make investments with the future in view? Will workers be willing to train? Will workers make proactive career adjustments? Can workers be resilient?
The second is about things that they do not do – will workers seek to resist change? Will government wait for “evidence of change’ before making the necessary investments? Will workers become over-reliant on government protection? Will workers focus on being upset about change?
If the answer is ‘yes’ to the first set of questions and ‘no’ to the second set, we will find that our labour force will remain economically relevant for longer.
We will not have a choice of resisting technological change, it has a history of winning – but we do have choices about how we cope with it. And the earlier we start making the right ones the better.