Asia must prepare today for tomorrow’s jobs

MANILA, Philippines — Technology optimists argue that progress creates many more jobs than it destroys. They say fears over job losses are as misplaced as Luddite worries in the 19th century over the loss of jobs like horse and buggy driver or loom weaver. More recently,  the introduction of ATMs  also supports this view since the machines haven’t replaced bank tellers but broadened their roles into customer relationship management.

Certainly, the skyscrapers in cities like Manila and Mumbai are filled with people doing new jobs that have moved them and many others from poverty into the middle class. The last two decades have seen a wave of new professional jobs created in developing Asia, from research analysts to programmers, environmental scientists and data engineers.

But in many cases, even well-paid, new jobs are under threat. Not from technology itself, though artificial intelligence and high-performance robots are a challenge. Rather, policies are lagging the changes happening in industry at large. For Asian countries to overcome the threat to their progress, policymakers need to work with the full range of stakeholders – from employers to educators to workers and unions – and focus on ensuring relevant education and labor regulation.

Take the example of the Philippines. In less than 15 years, the country has built a thriving business process outsourcing (BPO) sector that has created over a million well-paid clerical jobs. The sector now accounts for over six percent of annual gross domestic product.

But recently, employment growth has slowed because the sector now requires fewer of the customer service agents that the Philippines most often provides and far more specialized analysts, designers, and researchers. Estimates from the Information Technology and Business Process Association of the Philippines show that the share of low-skilled workers in BPO will decline from 47 percent in 2016 to 27 percent in 2022 while high-skill BPO jobs will increase from 15 percent to 46 percent.

Going forward, automation of basic BPO services, notably robotic process automation, will continue to transform the sector in ways we cannot even conceive of today. This means that the government, education institutions, and BPOs need to work together to train workers for the jobs of the future. 

One way to do this is to align education more closely with industry needs. Universities need to speak to employers to find out exactly which IT skills are needed and create courses targeted to their needs. But while it is imperative to increase quality and access to tertiary education in computer and IT-related fields, it is also crucial to create links between vocational and higher education so workers can learn new skills or upgrade their existing skills as employer demands shift. That would create a larger and better educated labor force with a more relevant and diverse skill set.

Other skills for the future are those that develop high cognitive and social abilities useful for roles in research, analysis, or management. We estimate that every year, employment in jobs that have an IT, cognitive, or social focus grows an average of 2.6 percentage points faster than overall employment.

Incorporating digital literacy into standard school curricula from an early age and ensuring that schools develop not only reading, writing, and numeracy skills, but also social and emotional skills is likely to be the most effective way of teaching and providing a foundation for future learning and re-learning.

Labor laws and protections also need a rethink. More than ever before, labor market regulations need to protect workers rather than jobs. In practical terms, this means that stiff regulatory barriers to employee layoffs or to certain types of contracts such as fixed term contracts – common in countries such as India and Indonesia – need to be reconsidered and  modern systems of social protection introduced.

Such systems would include minimum wages covering a large pool of workers, workfare programs, regulations on work hours and conditions, and new ways of promoting equal opportunity. Workers of the future may well work part-time, on-call, or in temporary placements, perhaps with multiple employers at the same time. Even full-time employees are likely to switch jobs frequently. 

Some forms of unemployment insurance – tailored to reflect the fiscal health of the government in question – would also help to protect people between jobs. This calls for healthcare, pension, and other benefits that are attached to the worker, rather than the firm, and can be carried from job to job.

Digital technologies using biometric information will make all that easier, and there are good models in place such as India’s Aadhaar system which now covers 1.2 billion people,  Indonesia’s e-KTP, Pakistan’s NADRA, and Malaysia’s MyKad.

There are many reasons to be bullish about the power of technology to create new and better jobs and the Asia and Pacific region is well-placed to benefit. But we cannot be complacent. Policymakers need to confront bottlenecks in their education and regulatory systems that could impede the rise of a middle class.

The future of work and the region’s prosperity depend on it.

(Yasuyuki Sawada is Chief Economist, Asian Development Bank)   Yasuyuki Sawada