My Say: The apt use of technology is to create new jobs and not just automate existing ones

This article first appeared in Forum, The Edge Malaysia Weekly, on August 24, 2020 - August 30, 2020.
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The world is experiencing an unprecedented acceleration in technological advancement and implementation, leading to profound shifts in the workforce. Innovations are penetrating every sector of the economy, making human-performed work increasingly redundant.

The 21st century’s digital revolution has unleashed a new wave of artificially intelligent processes and advanced machines, further automating complex tasks and jeopardising skilled workers in positions once considered difficult to automate. Thus, it is only natural that opponents of digital disruption voice grim apprehension towards such advancements by highlighting massive displacement of jobs and the increased unemployment of low-skilled labour.

However, a proper grasp of the situation requires a sector-specific breakdown on technological change and its impact — as not all sectors will be affected equally — in different geographies and in different ways. For Asean, most of its enterprises are perceived as followers of technology adoption rather than innovators. Asean member states tend to lag in their responses to tech adoption even though the costs of such technologies are rapidly falling and their application is becoming more commonplace in more advanced nations.

The extensive study done by the International Labour Organization (ILO) has determined five important sectors that Asean has dominated in international trade and we discuss the technology applications that can have the most impact on productivity and consequently, jobs displacement. In doing so, we also assess new opportunities that evolve from new technology adoption and the skill sets that are required in these new roles.

These assessments will provide policymakers with a deeper understanding of the characteristics and shifts in the workforce skills of the future. If we can identify the disruptive technologies relevant to each sector, we can also generate demand for other skills and present new paradigms for operations of enterprises within the Asean region. This would be extremely important to prepare nations for the “future of work”.

Automotive industry

As consumer demand for technologically capable cars with less environmentally harmful effects rises, governments across Asean will be compelled to implement policies incentivising R&D activities and purchasing of electric vehicles (EV), hybrid electric vehicles (HEV) and plug-in electric vehicles (PHEV). The pressure to innovate and bring to market technologically advanced vehicles will be substantive. However, in the near term, we expect these technologies to be integrated into the higher-end car market segment first, followed by an encroachment into the mass consumer market.

One key driver for robotic and automation deployment is the common practice of including “cost down” agreements, in which suppliers enter a contractual agreement to either reduce the overall price of an auto part or increase productivity without increasing the resources expended. To meet these agreements, automation has become an attractive and likely alternative, especially within countries with rising labour costs.

Low-skilled workers will find themselves displaced in favour of automation and auto-workers today face high automation risk. Also, manufacturers will increasingly seek higher skilled talent with R&D competencies, ranging from analytical experts to autonomous driving engineers and sustainability integration experts.

Business process outsourcing (BPO)

BPO services are increasingly being replaced by robotic process automation (RPA), which is not only able to perform tasks quickly but can also learn from experience and improve its execution after each operation. It can also work around the clock, is less error-prone and presents a solution to high worker turnover problems, which are characteristic of the sector.

The digital transformation and the rise of new technologies applied to customer service — such as cloud services, analytics, voice recognition, omnichannel capabilities, digital services, smart interactive voice response (IVR), virtual agents and robo-advisory — are requiring companies to make larger investments in order to offer the best customer experience to consumers, as well as having new professional skills and greater abilities to administer them.

To be able to offer this improved customer experience in the digital era, companies are turning to BPO service providers that combine consulting, specific competencies in their vertical, understanding of the client’s digital maturity stage and implementing appropriate capabilities through omnichannel platforms. The wider use of analytics and cognitive technologies from the data of their consumers will improve their service quality and intuitive user experience.

BPO services are also being advanced towards knowledge process outsourcing (KPO). KPO services are of higher value than BPO services, and they include fraud analytics, data integration, project digitisation, R&D outsourcing, mergers and acquisitions valuation, and medical image analysis.

Thus, the future jobs in BPO-KPO services will require multidisciplinary expertise (or a team of experts from different disciplines) and a good grasp of how automation and data analytics will transform their capabilities.

Electrical and electronics (E&E) industry

Robotic automation in this sector is “human centric”, occurring in the form of collaborative robots, or “cobots”, able to perform repetitive, high precision and difficult tasks. This technology — also seen in the automotive sector — aids workers rather than replaces them. Currently, people exceed the capabilities of robots in overall assembly, perception, flexibility, dexterity and adaptation to new duties, which means human workers are (for now) more cost-effective.

However, this is changing due to the adoption of 3D printing, for instance, possibly rendering lower-skilled packaging and assembling jobs unnecessary. Separately, the Internet of Things offers an important growth opportunity for Asean’s E&E players. The IoT’s ability to connect disparate operations, synchronise machines and generate insightful data presents exciting possibilities for enterprises to improve their efficiency in almost every sector.

Because Asean’s E&E sector and subsectors possess a formidable and established nexus of producers and suppliers, the world’s high demand for IoT devices and components presents a significant growth opportunity.

Garment, clothing and footwear (GCF) industry

Of all the sectors covered, the GCF sector seems to be the most vulnerable to the extensive technological displacement of workers. A number of technologies stand to disrupt this sector: 3D printing, body scanning technology, computer-aided design (CAD), wearable technology, nanotechnology, environmentally friendly manufacturing techniques and, lastly, robotic automation.

Combined, body scanning sensors and CAD can not only provide the perfect fit to the consumer but also permit extremely fast delivery, which is further accelerated through 3D printing. Because 3D printing does not require as much human input, it enables production to move closer to the markets in which products are sold.

There are early indications that the production footwear factories in Asean have started to dwindle, as are low-skilled labour in tailoring being replaced by “sew-bots” in garment factories.

Also, advancements in nanoparticle research have introduced nanoparticle-infused clothes that are waterproof, stain-proof, UV protecting and/or odourless.

In addition, larger GCF brands are implementing more environmentally friendly manufacturing techniques to reduce the amount of water consumed, chemicals used and material waste produced.

Retail

Mobile and e-commerce platforms have the potential to massively displace Asean’s more conventional bricks-and-mortar retail establishments. The current Covid-19 lockdowns present conditions that will further accelerate their rise.

Additionally, products can increasingly be sold online more cheaply, especially because rent and overhead expenses are rising, consumers are becoming more tech-savvy and internet infrastructure is improving. Cloud technologies, big data analytics and the IoT promise to improve enterprise operations by optimising inventory management, product tracking and shopping intelligence.

For enterprises seeking to intensify their e-commerce and mobile shopping presence, we expect them to increasingly recruit individual talents with strong digital marketing and social media skills. Furthermore, an increase in the use of cloud technologies, big data analytics and the IoT will intensify hiring demands for technically capable workers in areas such as data analysis, programming and supply chain management.

Across all five sectors, technologies — both current and forthcoming — can increase productivity and make some vocations redundant but, importantly, have the potential to create new roles. The real question lies in whether Asean governments, their agencies and their industry players can extract the benefits of technology and envision new jobs and optimise existing ones by marrying digital advantages.

The adoption of technology to improve productivity, reduce costs and gain competitive advantage should not be at the expense of displacing existing workers and increasing unemployment. Instead, think tanks or special committees in collaboration with futurists and visionary entrepreneurs can study areas where new jobs can be created, instead of replacing existing ones.

The ability to first envision and subsequently create new employment will enable nations to imagine the reality of the “future of work”. From there, the skills required for those new jobs can be taught and future workers can be prepared for them. It is my hope that this short article will serve as an important contribution to national dialogues on these issues and help facilitate important policy choices.


Hazik Mohamed is managing director of Stellar Consulting Group and centre director of Entrepreneurship and Innovation at Putra Business School

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