Automation to increase jobs but more training needed — ADB

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In the Business Process Outsourcing industry, it might require a lot of upfront investment such that it may not be feasible in such a short time frame. -- Joseph Zveglich, Jr., Director for ADB’s Macroeconomics Research Division. -- AFP

THE ASIAN Development Bank (ADB) has allayed concerns over fears of job losses as a result of the so-called “fourth industrial revolution,” but added that economies need to offer specialized training to meet the demand for higher-skilled jobs.

The ADB said that new technologies only automate routine tasks that form part of certain jobs, such as soldering components onto a circuit board repeatedly on an assembly line or counting cash in banks.

“While task automation may displace some types of jobs, in other cases it restructures the job such that machines handle only the routine tasks,” the ADB said in its flagship report Asian Development Outlook 2018 themed: How Technology Affects Jobs.

It added that rising demand for higher-skilled jobs may even offset possible job displacement driven by automation.

“Improved productivity and lower prices often spur higher demand. Increased demand may even expand the number of jobs in factories that automate part of their production process,” it said.

“Moreover, the productivity benefits of new technology in one industry lower production costs in downstream industries through input-output channels, contributing to increased demand and employment across industries. An increase in demand and production in one industry heightens demand for upstream industries as well,” it added.

Some firms may not even opt to drastically shift to fully automate processes with new technology as the costs may not yield enough profits in return.

“In the Business Process Outsourcing (BPO) industry, it might require a lot of upfront investment such that it may not be feasible in such a short time frame,” said Joseph Zveglich, Jr., director for ADB’s Macroeconomics Research Division.

The ADB defines the fourth industrial revolution as the use of “smart applications that integrate virtual and physical production systems,” such as artificial intelligence, quantum computers, biotechnology, blockchain technology, three-dimensional printing, and new generation robotics.

Nevertheless, the regional lender said that workers should take advantage of the growing demand for higher-skilled jobs, as those in clerical or process-driven tasks may see stagnant wage growth.

ADB said that about 47% of BPO workers in the Philippines in 2016 worked at process-driven tasks requiring little abstract thinking.

“With the advent of new technologies, such jobs are likely to decline as a share of all BPO jobs. There will be new opportunities driven by greater demand for more complex BPO services, which can expand along with technologies. But they will require more specialized training.”

“Workers employed as medical transcriptionists, for example, may lose their jobs to increasingly sophisticated software able to recognize voice, text, and image signals. Transitioning these workers into nonroutine cognitive jobs in the BPO industry will require retraining and skills development,” it added.

The ADB expects the share of low-skilled jobs in BPOs to decline to 27% by 2022 from 47% in 2016, while medium-skilled jobs — those that involve complicated tasks that require experience and abstract thinking — are expected to expand to 46% from 38%, with those considered high-skilled growing to 27% from 15%.

“If Asia’s workers are not given the skills in demand — particularly to fill jobs intensive in nonroutine and cognitive tasks — they may be left behind. Incomes for the few with the required skills will rise, exacerbating inequality,” ADB said.

It also called on the government to integrate specialized skills needed to work with new technologies in universities and institutions specializing in technical and vocational education and training.

“And they will have to cater not only to the rising number of graduates from secondary education, but also to adults seeking to upgrade their skills or retrain,” the lender said. — Elijah Joseph C. Tubayan