The Impact of Technology on Jobs in Asia (and beyond)
Posted By On May 11, 2018

The interplay between technological development and jobs has been a preoccupation of late for the world’s preeminent international bodies. The Asian Development Bank (ADB), four regional multilateral development institutions, including the ADB and the Inter-American Development Bank, and the Organization for Economic Cooperation and Development have all issued comprehensive reports on this issue in the past two months alone. This issue dominated the ADB’s 51st Annual Meeting in Manila last week.

What the reports tell us is that new technologies will irrevocably change employment affecting domestic and international labor markets, that there are positives and negatives associated with the relentless progress of technology, and that the balance could be tipped in favor of the positives assuming certain (rather extensive) actions are taken. For better or worse, nearly all of the actions recommended fall on the shoulders of government.

First, the negatives: these tend to focus on job losses and related socio-economic consequences. New technologies will lead to the elimination of some jobs and drive new inequalities. Technological change and automation will spur significant uncertainties for certain industries and and leave segments of the current workforce behind. This all is certain—and certainly a little bleak. A recent BBC article, cheerily titled “How Your Workplace is Killing You,” argues that rising work insecurity, coupled with the need to self-fund health care and work longer hours, is resulting in higher rates of stress and work-related deaths.

The good news is that this Fourth Industrial Revolution, powered by artificial intelligence, machine learning and robotics, offers numerous opportunities, too. New technology can promote efficiencies and lower operating costs that can improve productivity—which, in turn, can create new jobs and drive economic growth.  The ADB report highlights that automation in industry across Asia has so far replaced only parts of existing jobs, and not entire jobs. Automation has also eliminated few jobs since it has been concentrated in capital-intensive manufacturing. Asia has been further buoyed by a burgeoning middle class driving domestic demand, which is creating more jobs than are being lost as a result of new technologies. But how long will each of these phenomena last?

Asia’s small and medium-sized enterprises (SMEs) ought to benefit from these changes. And this is significant, since, by recent estimates, SMEs represent 98 percent of all enterprises in Asia-Pacific and employ two-thirds of the region’s workforce. These SMEs certainly face challenges in both affording and having the skills to take advantage of new technologies, but they have much to gain. New online platforms—as highlighted in a recent POPS blog—allow small businesses to trade with a vastly greater market. This trade is facilitated by access to an ever-growing array of data analytics, financial technology, and remote working and sourcing.

And so the bottom line is that jobs and industries will fall, but new jobs and new industries and markets will rise in their place. And so what is to be done to both ease and profit from this transition?

These reports argue that the burden falls on governments across a broad spectrum that includes: educational reform, including investing in skills for the jobs of tomorrow; job-matching and worker redeployment to address the shifting labor markets; social protection, broader health care coverage and unemployment support, to cushion initial job losses; worker welfare and revised labor market regulations in general; as well as tax reform to address possible rising inequalities. No small task then.

The OECD also recommends a bigger tent approach to “fostering social dialogue”, to involve not only government but employers and workers at large. The tone of this dialogue, should it occur, will likely be determined by the degree of success addressing the challenges outlined above.

 

Image credit: Jiuguang Wang



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