Countries in Southeast Asia should consider developing industry transformation maps in key sectors to enable the transition to the fourth industrial revolution (4IR) with adequate investment in skills development for new and repositioned jobs, according to a new study by the Asian Development Bank (ADB).
The finding is one of six key recommendations emerging from ADB’s study Reaping Benefits of Industry 4.0 Through Skills Development in High-Growth Industries in Southeast Asia, covering Cambodia, Indonesia, the Philippines, and Viet Nam.
“The future of jobs is at the heart of development in Asia and the Pacific,” said Director General of ADB’s Sustainable Development and Climate Change Department Woochong Um. “While jobs have been lost to automation in recent years, new jobs will emerge as new and disruptive technologies are adopted. Now is the time to invest in skills development that will help displaced workers acquire the abilities necessary to move into new jobs and help job-seekers access quality jobs for greater prosperity.”
The study assesses two industries in each country deemed important for growth, employment, and 4IR. Based on employer surveys, the study reports large potential returns to businesses arising from productivity increases from 4IR technologies.
By 2030, there is likely to be a positive net impact in all industries analyzed with more jobs created than displaced. Although a third of agro-processing jobs in Viet Nam may be displaced, for example, substantial net job creation of 34% is possible. There could also be net increases of 39% for garments in Cambodia, 14% for food and beverage manufacturing in Indonesia, and 11% for IT-business process outsourcing (BPO) in the Philippines.
“The findings of the study point towards a clear path for the future in Southeast Asia,” said ADB Director General for Southeast Asia Ramesh Subramaniam. “While the region may face challenges in moving the displaced workers into new jobs due to inadequate skills, we are confident that countries will design appropriate policies and invest in workforce skills particularly to accelerate the post-pandemic recovery. We must do everything possible to ensure that no one is left behind.”
Employers in all industries surveyed stressed the importance of skills in the context of disruptive technologies. Together, they could need an additional 169 million people trained by 2030 to prepare for the transition to 4IR.
The study recommends strengthening on-the-job training and skills development for the jobs of tomorrow. It calls for developing industry-led technical and vocational education and training programs with dedicated credentials for 4IR, and flexible and modular skills certification programs that recognize skills attainment outside of traditional education channels.
The study revealed mismatches between training institutions and employers on the perceived readiness of graduates for the workplace. While 96% of training institutions surveyed in Indonesia believed their graduates were well-prepared for work, only 33% of food and beverage manufacturing employers agreed. In Cambodia, almost 90% of surveyed employers reported that graduates were inadequately prepared for entry-level jobs.
The study recommends upgrading training delivery through the application of 4IR curriculum and technology in classrooms and training facilities in close collaboration between industry and training providers to strengthen workforce readiness. The survey of training institutions revealed limited use of advanced technologies such as virtual and augmented reality and online platforms for training delivery.
The study calls for new approaches to strengthen inclusion and social protection for entry-level workers, those at risk of job displacement, and those who need upskilling. According to IT-BPO employers in the Philippines, manual and administrative jobs which are typically held by women are likely to see the largest losses, while females in Cambodia’s garments industry are more likely to be affected.
To ensure the welfare of workers, the study calls for a strong focus on reskilling and upskilling programs, and incentives schemes for employers to retrain workers. The Career-Up Josei-Kin program in Japan, which subsidizes employers to train individuals not on regular contracts is identified as a good example.
While the coronavirus disease pandemic is accelerating digital transformation, the study finds that companies deploying 4IR technologies are likely to recover faster from the disruptions caused by the pandemic and be more resilient in the future.
‘Industry 4.0’ tech for post-COVID world, is driving inequality
Developing countries must embrace ground-breaking technologies that have been a critical tool in tackling the COVID-19 pandemic, or else face even greater inequalities than before, UN economic development experts at UNCTAD said on Thursday.
“Very few countries create the technologies that drive this revolution – most of them are created in China and the US – but all countries will be affected by it”, said UNCTAD’s Shamika Sirimanne, head of Division on Technology and Logistics. “Almost none of the developing countries we studied is prepared for the consequences.”
The appeal, which is highlighted in a new UNCTAD report, relates to all things digital and connective, so-called “Industry 4.0” or “frontier technologies”, that include artificial intelligence, big data, blockchain, 5G, 3D printing, robotics, drones, nanotechnology and solar energy.
Gene editing, another fast-evolving sector, has demonstrated its worth in the last year, with the accelerated development of new coronavirus vaccines.
In developing countries, digital tools can be used to monitor ground water contamination, deliver medical supplies to remote communities via drones, or track diseases using big data, said UNCTAD’s Sirimanne.
But “most of these examples remain at pilot level, without ever being scaled-up to reach those most in need: the poor. To be successful, technology deployment must fulfil the five As: availability, affordability, awareness, accessibility, and the ability for effective use.”
Income gap widening
With an estimated market value of $350 billion today, the array of emerging digital solutions for life after COVID is likely to be worth over $3 trillion by 2025 – hence the need for developing countries to invest in training and infrastructure to be part of it, Sirimanne maintained.
“Most Industry 4.0 technologies that are being deployed in developed countries save labour in routine tasks affecting mid-level skill jobs. They reward digital skills and capital”, she said, pointing to the significant increase in the market value of the world’s leading digital platforms during the pandemic.
“The largest gains have been made by Amazon, Apple and Tencent,” Sirimanne continued. “This is not surprising given that a very small number of very large firms provided most of the digital solutions that we have used to cope with various lockdowns and travel restrictions.”
Expressing optimism about the potential for developing countries to be carried along with the new wave of digitalisation rather than be swamped by it, the UNCTAD economist downplayed concerns that increasing workforce automation risked putting people in poorer countries out of a job.
This is because “not all tasks in a job are automated, and, most importantly, that new products, tasks, professions, and economic activities are created throughout the economy”, Sirimanne said.
“The low wages …for skills in developing countries plus the demographic trends will not create economic incentives to replace labour in manufacturing – not yet.”
According to UNCTAD, over the past two decades, the expansion in high and low-wage jobs – a phenomenon known as “job polarization” – has led to only a single-digit reduction in medium-skilled jobs in developed and developing countries (of four and six per cent respectively).
“So, it is expected that low and lower-middle income developing countries will be less exposed to potential negative effects of AI and robots on job polarization”, Sirimanne explained.
Nonetheless, the UN trade and development body cautioned that there appeared to be little sign of galloping inequality slowing down in the new digital age, pointing to data indicating that the income gap between developed and developing countries is $40,749 in real terms today, up from $17,000 in 1970.
Greater Innovation Critical to Driving Sustained Economic Recovery in East Asia
Innovation is critical to productivity growth and economic progress in developing East Asia in a rapidly changing world, according to a new World Bank report launched today.
Countries in developing East Asia have an impressive record of sustained growth and poverty reduction. But slowing productivity growth, uncertainties in global trade, and technological advances are increasing the need to transition to new and better modes of production to sustain economic performance.
To support policy makers in meeting this challenge, The Innovation Imperative for Developing East Asia examines the state of innovation in the region, analyzes the key constraints firms face in innovating, and lays out an agenda for action to spur innovation-led growth.
“A large body of evidence links innovation to higher productivity,” said Victoria Kwakwa, World Bank Vice President for East Asia and Pacific. “The COVID-19 pandemic, climate change, along with the fast-evolving global environment, have raised urgency for governments in the region to promote greater innovation through better policies.”
While developing East Asia is home to several high-profile innovators, data presented in the report show that most countries in the region (except China) innovate less than would be expected given their per capita income levels. Most firms operate far from the technological frontier. And the region is falling behind the advanced economies in the breadth and intensity of new technology use.
“Aside from some noteworthy examples, the vast majority of firms in developing East Asia are currently not innovating,” said Xavier Cirera, a lead author of the report. “A broad-based model of innovation is thus needed – that supports a large mass of firms in adopting new technologies, while also enabling more-sophisticated firms to undertake projects at the cutting edge.”
The report identifies several factors that impede innovation in the region, including inadequate information on new technologies, uncertainty about returns to innovation projects, weak firm capabilities, insufficient staff skills, and limited financing options. Moreover, countries’ innovation policies and institutions are often not aligned with firms’ capabilities and needs.
To spur innovation, the report argues that countries need to reorient policy to promote diffusion of existing technologies, not just invention; support innovation in the services sectors, not just manufacturing; and strengthen firms’ innovation capabilities. Taking this broader view of innovation policy will be critical to enabling productivity gains among a broader swath of firms in the region.
“It is important for governments in the region to support innovation in services, given their rising importance in these economies – not only for better service quality but increasingly as key inputs for manufacturing,” said Andrew Mason, also a lead author of the report.
Countries also need to strengthen key complementary factors for innovation, including workers’ skills and instruments to finance innovation projects. Building stronger links between national research institutions and firms will also be critical to fostering innovation-led growth in the region.
Sea transport is primary route for counterfeiters
More than half of the total value of counterfeit goods seized around the world are shipped by sea, according to a new OECD-EUIPO report.
Misuse of Containerized Maritime Shipping In the Global Trade of Counterfeits says that seaborne transport accounts for more than 80% of the volume of merchandise traded between countries, and more than 70% of the total value of trade.
Containerships carried 56% of the total value of seized counterfeits in 2016. The People’s Republic of China was the largest provenance economy for container shipments, making up 79% of the total value of maritime containers containing fakes and seized worldwide. India, Malaysia, Mexico, Singapore, Thailand, Turkey and the United Arab Emirates are also among the top provenance economies for counterfeit and pirated goods traded worldwide.
Between 2014 and 2016, 82% of the seized value of counterfeit perfumes and cosmetics by customs authorities worldwide, 81% of the value of fake footwear and 73% of the value of customs seizures of fake foodstuff and toys and games concerned sea shipments. Additional analysis showed that over half of containers transported in 2016 by ships from economies known to be major sources of counterfeits entered the European Union through Germany, the Netherlands and the United Kingdom. There are also some EU countries, such as Bulgaria, Croatia, Greece and Romania, with relatively low volumes of containers trade in general, but with a high level of imports from counterfeiting-intense economies.
To combat illicit trade, a number of risk-assessment and targeting methods have been adapted for containerised shipping, in particular to enforce against illicit trade in narcotics and hazardous and prohibited goods. But the analysis reveals that the illicit trade in counterfeits has not been a high priority for enforcement, as shipments of counterfeits are commonly perceived as “commercial trade infractions” rather than criminal activity. Consequently, existing enforcement efforts may not be adequately tailored to respond to this risk, according to the report. Tailored and flexible governance solutions are required to strengthen risk-assessment and targeting methods against counterfeits.
As well as infringing trademarks and copyright, counterfeit and pirated goods entail health and safety risks, product malfunctions and loss of income for companies and governments. Earlier OECD-EUIPO work has shown that imports of counterfeit and pirated goods amounted to up to USD 509 billion in 2016, or around 3.3% of global trade.
US intelligence report leaves Saudi Arabia with no good geopolitical choices
The Biden administration’s publication of a US intelligence report that holds Saudi Crown Prince Mohammed bin Salman responsible for the...
Russia-EU break possible but unwanted
Pressures in relations between Russia and the West have recently become so strained that Foreign Minister Sergey Lavrov warned of...
What does the Kashmiri want?
A group of envoys visited the illegally-occupied Jammu and Kashmir State ostensibly `to take first-hand account of the situation in...
Palestinian elections raise hopes for two-State solution
The holding of free and fair elections in the Occupied Palestinian Territory will help “clear the path” for restoring a...
UN Security Council demands COVID-19 vaccine ceasefires
The UN Security Council on Friday unanimously passed a resolution calling on all Member States to support a “sustained humanitarian...
Pakistan Day Celebrations: Civilian Participation
Pakistan got independence on 14 August 1947 by hectic political struggle from the platform of All India Muslim League (AIML)...
Transition 2021: How Biden is likely to approach the Middle East
In terms of foreign policy, the new President of the United States, Joe Biden,is likely to face numerous challenges, especially...
South Asia3 days ago
Pakistan PM visited Sri Lanka to further strengthen the existing friendship to new heights
Defense3 days ago
Possibility of an alliance in Sino-Russian Relations
Europe3 days ago
Council of Europe fights for your Right to Know, too
Defense3 days ago
SCO: Potential and Challenges to Regional Integration
Human Rights2 days ago
Belarus human rights situation deteriorating further
Americas2 days ago
U.S. Climate Policy Could Break the Ice with Russia
Economy2 days ago
Kickstarting the U.S. Economy: A Rebound or Further Inequity?
Economy2 days ago
Brighter Future Waits Ahead