The advent of industry 4.0 means that many old definitions of work are today under review. Digital technology has enabled instant connectivity and AI and robotics are cutting down operation costs across sectors. Sectors like BFSI, IT, and Financial services have already undergone significant changes in their business process, with each such step, technology playing a larger role. Labor-intensive sectors like Manufacturing have also gone through similar changes, all which today mean that jobs in such sectors look quite different than their predecessors. The tides of time and technology are actively reshaping how modern day businesses operate.
Such short term changes often in quick succession leads to markets shocks. As one industry ventures into tech-driven business transformation, more begin following. Soon labor markets begin witnessing mass unemployment as now the skills required by firms and companies aren’t what the working population is suited for and its this mismatch which leads shocks in the labor market. The fate of many, across sectors like IT and manufacturing, globally has been either layoff or urgent reskilling. Such times often test how effectively policymakers can deal with incoming market changes and prepare a workforce that is ready for the future. And larger the workforce, more complicated it is for policymakers to pass regulations to yield uniform results.
This is where the steps ASEAN takes to ensure that its workforce is capable of dealing with such skill shifts becomes imperative. The region boasts a healthy percentage of the working population and is reported to reach levels of India and China by 2030. Besides having a large working population, the region also has one of the most diverse composition in terms of skills. While countries like Singapore and Malaysia have been growing at significant rates, they often depend on foreign talent to fill in positions of skilled workers. On the other hand, countries like Vietnam and Cambodia, which have some of the fastest growing young working populations in the region, depends mainly on labor-intensive, comparatively lower-skilled jobs in manufacturing; jobs that have been noted to be among the first to get displaced by newer technological applications. Indonesia, the largest economy among the ASEAN states, meanwhile also deals with the threat of losing jobs.
The risk factor
And the idea of the magnitude of such a threat comes from the recent International Labour Organization (ILO) report that predicted that almost half of salaried workers – approximately 137 million in number are at risk. Countries like Cambodia, Indonesia, Vietnam, the Philippines, and Thailand were at risk of their jobs being substituted due to breakthroughs in technology and jobs becoming obsolete at a faster rate than at which they are created. Thus creating a workforce that is adaptive and can effectively deal with skillset changes should now become one of the top priority of such countries.
First of many changes that the region has to consider is the growing importance of STEM (science, technology, engineering, and mathematics) degrees as they enable the working population gets better jobs in an increasingly tech-driven world, while also enabling many to successfully innovate. Secondly it imperative to look at low skilled jobs and how reskilling programs can be accessible for the portion of the workforce engaged in such areas. This is also relevant for nations like Singapore and Malaysia which are witnessing a fall in manufacturing and rising services sector; a shift that requires more skilled professionals to be part of the workforce. This doesn’t necessarily mean skilling initiatives for entry-level professionals but also for those who have been in the profession for longer durations. Reskilling is slowly becoming a need that encompasses all working age groups.
Quality digital talent
This becomes more relevant in light of how ASEAN block is suffering a dearth of quality digital talent across the various member states. In addition to covering basic technical skills, education and skill development programs should be geared at developing abilities that enable employees to overcome the barriers that a changing economy brings about. In addition to pure technical skills studies show that new age new 'talent profile' must combine them with social and collaborative skills to meet the employment needs of the new economy and ensure inclusive growth. Such a focus on holistic development would also help to ensure employees' required flexibility needs and build the ability to keep learning and adapting to the changing nature of the economy.
In addition to building relevant skills, especially to find work in an increasingly digitalized world, many ASEAN states would also benefit from taking proactive steps in including more women into the economic fold. Studies have pointed to a growing divide between women of working age and their financial inclusion. By looking at the inclusion of women into the mainstream economic activity could add over $369 billion to its overall GDP in 2025. This a recent study by the McKinsey Global Institute report.
Improving women’s participation and economic empowerment, in addition to building skills geared to ensure employment in the future are important steps for the region to realize its economic potential and ensure its workforce is able to deal with incoming changes in the labor markets, both from the demand and supply side. To notice actual changes, the implementation of education on gender equality initiatives should begin at the grassroots level. Emphasis should be placed on the need for sincere respect, as opposed to contrived tolerance. Furthermore, progress in four areas – education, financial and digital inclusion, legal protection, and unpaid care work – could help accelerate progress in terms of economic development and regional prosperity.
As countries in the region continue to grow, the threat of an uncertain future should push policymakers to think of steps to prepare their workforce for such a future. It is important to note any growth within the region in coming times must be undergirded by a strong and stable labor market in order for it to be sustainable in the long term. Reformation of ASEAN’s labor forces should be a key step in its efforts to create jobs and realize its economic potential.