THE International Labor Organization (ILO) said employers need to update their business models to adapt to growing technological innovation, with the Association of Southeast Asian Nations (ASEAN) identified as a potential hot spot for adopting more automated processes.

In its Changing Business and Opportunities for Employer and Business Organizations study, the ILO said both establishments and Employer and Business Membership Organizations (EBMOs) have to adjust to rapid changes driven by technological innovation or digitization/automation.

“Technology is the most impactful of the global trends shaping the workplace and business globally. According to our survey, 56% of the 500 respondents named technological innovation as the global trend with the greatest overall impact on the way businesses need to be conducted,” ILO said.

ILO said the main impact of technological innovation at the strategic level for businesses is facilitating access to new markets, according to 76% of respondents. Some 56% of respondents see advances in technology as avenues for the creation of new products and services.

In operational terms, ILO said: “With advances in collaborative and networking tools, the physical location of the workplace is less important… With advances in collaborative and networking tools, the physical location of the workplace is less important.”

Within ASEAN, ILO said economies are more likely to turn to automation because of the high labor content of the manufacturing and service industries. Artificial intelligence and 3D printing might lead to diminishing demand for some low-skilled jobs but ILO said: “(I)ncreased demand for advanced materials and robotics that are not seen as labour-replacing, but labour enhancing, will create jobs.”

Citing a 2017 Harvard Business Review study, ILO listed ASEAN countries where the potential for automation is the highest: Thailand (54.6%), Indonesia (51.8%), Malaysia (51.4%), Philippines (47.9%), and Singapore (44.2%).

ILO recommends that employers and businesses evaluate the need to incorporate technology in their businesses especially since manual labor might be the better option for now.

“Employers and businesses must consider the costs of developing and deploying hardware and software, the supply and demand from providers and customers, and current labour costs: cheap manual labour is still perceived to be readily available around the world and may remain the more economical option,” the study said.

EBMOs should also participate in expanding their workers’ technical skills since “increased investment in human resources will complement investment in automation and technology.”

ILO said EBMOs need to play an active role in assisting their members by establishing policies that specifically cater to each member instead of adapting strategies that are uniform for all. Tailored policies will be beneficial especially to members who are operating under new business models in which there is yet a clear regulatory framework. — Gillian M. Cortez