Summary of the Special Panel “The Other: Automation, Innovation and the Future of Work in Asia”

On 4 September, the Konrad Adenauer Stiftung (KAS), under the Socio-economic Governance Program Asia (SOPAS), hosted a special panel during the 2020 AAS-in-Asia Conference. Entitled, “The Other: Automation, Innovation and the Future of Work in Asia”, the panel aimed to address salient issues and debates about the impact of automation and technological innovation on employment and labor practices in Asia. In particular, it sought to examine how technology transformed and will continue to affect economic and social structures in developing Asian countries, where governments, industries, civil society organizations and the workforce are still at grips with responding to the demands of the “Fourth Industrial Revolution” (Industry 4.0). To discuss these issues, KAS invited experts from leading multilateral institutions who have done grounded, extensive research on the topic: Dr Elisabetta Gentile from the Asian Development Bank (ADB), Dr Christian Viegelahn from the International Labor Organization (ILO) and Dr Daniel Schmücking from KAS Cambodia.

The chair, KAS Chief Representative to Japan Ms Rabea Bauer opened the panel with a brief description of KAS and the organization’s projects across the globe. According to her, aside from security and foreign policy issues, KAS is also concerned about socio-economic subjects, which makes technology and labor issues significant to their work. Ms Bauer then laid the background of the panel theme, highlighting the global anxiety and fear of technological unemployment which came along with the increasing ability of machines to perform cognitive tasks. Developing countries, in particular, are vulnerable to the future of work trends where machines are replacing human labor and changing economic structures and social dynamics.

Dr Elisabetta Gentile began the discussion with her presentation entitled, “How Technology Affects Jobs”. She cautioned against the commonplace understanding that technology is displacing jobs. She pointed historically that while new technologies had initially disrupted every stage of industrial revolutions it also increased human activity and eventually complimented human workforce. According to Dr Gentile, what induces the present technological unemployment anxiety is the idea that “this time is different” where algorithms, not physical technology like machines, threaten to replace jobs. Despite these fears, her research with ADB indicates several reasons to be optimistic: 1) new technologies automate some tasks of a job, where human jobs do not disappear but are transformed; 2) technical feasibility does not guarantee economic feasibility since it will take a very long time and huge costs for machines to work like humans; 3) specific to developing Asia, the rising income and consumer demands would compensate for the decreasing need for human technology; and 4) history demonstrates that new technology creates new occupation and industries.

Furthermore, Dr Gentile points out the importance of understanding that machines tend to replace routine and manual occupation. Machines are still most present in sectors which have been reliant on robotics and machine technology (e.g automotive industry), while nonroutine, cognitive occupations maintain the need for human labor. In Asia, despite technology with global value chain posing employment risks due to the erosion of competitive advantage of low-cost human labor, Asian countries such as Philippines, India and Malaysia also show how technology enabled the creation of new nonroutine jobs and titles. Despite these promises, Dr Gentile reminded the audience of the difficulties attached to predicting technological innovation, and of the governments and businesses’ pivotal role in providing skills-training to match new jobs.

Following Dr Gentile’s comprehensive analysis, Dr Christian Viegelahn discussed his research with ILO in his presentation, “Preparing for the Future of Work: National Policy Responses in ASEAN +6”. The research aimed to examine the policies that ASEAN +6 countries are implementing and creating to prepare their labor markets for technological, climate and labor changes. This is important because various forces are changing the work practices such as the demand for “green jobs”, loss of working hours due to the coronavirus pandemic and demographic changes. His research on expectations and trends on labor in the region showed that the youth are optimistic about the prospect of technology creating more jobs, and that media reports indicate optimism and high expectations with the Industry 4.0. In addition, government policies tend to emphasize on high-skilled human resource, as governments invest on skills development for tech upgrading, vocational training, sector-specific skills roadmaps, lifelong learning and attracting highly-skilled talents.

Two particularly salient issues emerging from the research are ageing, where there is an emphasis on keeping the elderly employed longer, and the environment, where skills development on the renewable energy sector and assistance to climate-change affected jobs are stressed. Amidst these efforts, only a few countries mention the adverse effects of technological disruption. There is also a tendency towards an unrealistic expectation in terms of policy feasibility and oversimplification of re-skilling plans. To address these challenges, Dr Viegalahn, in line with ILO’s commitments, recommends governments and businesses to work with other stakeholders, such as workers and civil society, to push for a human-centric agenda that integrates those who are left behind in the policy process.

Focusing on a single case study, Dr Daniel Schmücking derived his analysis of the impact of digitalization how the governments and policy makers help shape global industry and labor trends from Cambodia’s garment industry. According to Dr Schmücking, while there is much debate about the impact of Industry 4.0 the global economy, the fact is that it is inevitable, and that developing countries with huge manufacturing industries need to be prepared. Such preparation is especially crucial because of increased competition for medium-skill workers, and the risk of automation of low-skilled jobs. Cambodia’s garment sector, in particular, is an important case in point because automation could lead to the loss of approximately 4 million jobs, and the country also lacks skilled workers for the tasks automation requires. Although jobs in the garment industry are likely to remain on-demand, he suggests that policy makers should create a working ecosystem that responds to increasing automation and digitalization, especially because of the positive spillover effects it could have on other industries.

Dr Schmücking discussed four scenarios that could aid policy development: 1) status quo that maintains the garment industry as a low-salary sector but with limited contribution to the Cambodian economy; 2) marginalized garment sector, which could lose Cambodia’s competitiveness as the production caravan moves elsewhere; 3) transition period, where low wage and high investment in automation are maintained to address the need to train for skills to catch-up; and, 4) fully-automated garment sector, which invests on both automation and skills. In the last scenario, opportunities for cross-sectoral growth is likely, with unqualified workers losing their jobs and qualified ones getting higher income. To reach the best scenario, the government needs to invest in education, research, infrastructure development especially on renewable energy to make Cambodia’s garment sector more competitive. It is also important to invest of local designs and expand the markets beyond Cambodia’s clientele, US and the EU.

After the presentation, Ms Bauer opened the floor for an online Q and A. Among the questions raised were: how to address countries like Myanmar with poor education outcomes that are facing the huge need to catch up in the technological change, how to offset the widening income gap between manual workers and non-routine laborers, and whether current infrastructures are enough to respond to the future of work trends. In addressing these questions, Dr Gentile pointed out that training people takes time, and that it is also important to create a decent working environment that protects and allows workers to make a living. Accordingly, while technology is posing some fears and threats, she encourages the use of technology to improve the labor situation, that is, the problem can also part of the solution. Aside from focusing on good working conditions, Dr Viegelahn drew attention to the need for policy makers to recognize that despite the huge emphasis on training, a huge population is far from these developments and discussions. Dr Schmücking, concurring with the previous responses, added that it is essential for policymakers to be realistic about the expectations and responses to digitalization because it takes a long way and hard effort for these expectations to materialize.

To wrap up the discussion, Ms Bauer thanked the discussants for their insightful presentations, and the audience for their participation. She ended with a summary of the panel’s takeaways. Aside from education and skills training, there is a need to encourage a dialogue among stakeholders which have been largely missing at present. Reflecting and acting on the importance of multilateral institutions are also pertinent, especially in thinking outside the nation-centric model. Ultimately, it is important to recognize that ASEAN will and can play a role in digitalization, automation and other aspects of the future of work trends.

Dr Carmina Untalan
IAFOR Research Centre, Osaka School of International Public Policy, Osaka University, Japan

Posted by Inkar