AU­TO­MA­TION

Our fu­ture de­pends on in­di­vid­ual com­pe­ten­cies and the abil­ity to self-learn

New Straits Times - - Opinion - The writer is deputy chief ex­ec­u­tive of the In­sti­tute of Strate­gic and In­ter­na­tional Stud­ies (ISIS) Malaysia

MANY, if not most, work­ers in the world be­lieve that glob­al­i­sa­tion and free trade hurt jobs and re­duce in­comes. It has not helped that great fig­ures of author­ity, even in­tel­lec­tual gi­ants, hold these views, some as a mat­ter of ide­ol­ogy and oth­ers as a mat­ter of per­ceived fact.

The sim­ple logic seems in­escapable: more im­ports mean fewer op­por­tu­ni­ties for work for lo­cals. It is also dead wrong. The one thing that has re­placed far more work­ers, con­tribut­ing to the phe­nom­ena of job­less growth, is tech­nol­ogy.

It has been es­ti­mated by Ball State Univer­sity re­searchers, for ex­am­ple, that 85 per cent of the jobs lost in the United States be­tween 2000 and 2010 was due to adop­tion and ad­vances in au­to­ma­tion.

The ar­gu­ment that most Amer­i­can jobs have been ex­ported, not least to Mex­ico and China, through off­shoring and out­sourc­ing flies in the face of the hard ev­i­dence.

Closer to home, an In­ter­na­tional Labour Or­gan­i­sa­tion study last year found that more than half — 56 per cent to be ex­act — of the labour forces of five Asean coun­tries have a high risk of be­ing displaced over the next 20 years.

The coun­tries were In­done­sia, the Philip­pines, Viet­nam, Thai­land and Cam­bo­dia, which to­gether ac­count for 80 per cent of the re­gion’s work­force or 137 mil­lion peo­ple.

Tex­tiles, cloth­ing and footwear are es­pe­cially sus­cep­ti­ble, with pos­si­ble losses of be­tween 60 and 90 per cent of in­dus­try job losses. In Cam­bo­dia, for ex­am­ple, up to half a mil­lion sewing ma­chine oper­a­tors may lose their jobs. Es­ti­mates for the au­to­mo­tive and auto parts in­dus­try are 60 to 70 per cent.

Nor are in­dus­tries sus­cep­ti­ble to job losses con­fined to man­u­fac­tur­ing. They in­clude ho­tels and restau­rants, whole­sale and re­tail trade, and con­struc­tion.

For Thai­land, one mil­lion shop sales as­sis­tants face be­ing re­placed by au­to­ma­tion, while in In­done­sia, 1.7 mil­lion of­fice clerks are vul­ner­a­ble.

Not sur­pris­ingly, less ed­u­cated work­ers and em­ploy­ees earn­ing lower wages face higher au­to­ma­tion risk. Women are also more likely to be displaced.

About the only ar­eas that are at low risk of labour re­place­ment are ed­u­ca­tion and train­ing, health ser­vices and so­cial work.

The threats emerg­ing from au­to­ma­tion and ro­bot­ics, es­pe­cially the highly in­tel­li­gent va­ri­ety that is tak­ing their place on fac­tory, of­fice and depart­men­tal floors, are not highly no­tice­able.

We know that the coun­tries that em­ploy the most robots are South Korea (437 per 10,000 work­ers), Ja­pan (323), Ger­many (282) and the US (152).

China is ex­pected to have the most num­ber of robots in op­er­a­tion by this year. Its “Made in China 2025” ini­tia­tive to up­grade its in­dus­try to 4.0 stan­dards means that it will not let up any time soon.

What should Asean economies and Malaysia do, or not do, in the face of these trends?

First, launch­ing tirades against glob­al­i­sa­tion and free trade is mis­placed. Rais­ing pro­tec­tion­ism lev­els is go­ing to be un­der­mined by hugely fall­ing unit costs.

All that will be ac­com­plished by pre­vent­ing in­te­gra­tion is to add to trans­ac­tion costs, open more av­enues for rent-seek­ing and add to marginal­i­sa­tion risks as other economies move ahead.

Sec­ond, it is point­less to try and hold back the on­set of tech­nol­ogy, much as the Lud­dites did in 19th-cen­tury Bri­tain when they set about de­stroy­ing tex­tileweav­ing ma­chin­ery to pre­serve their jobs.

The only an­swer to tech­nol­ogy is to em­brace it by adopt­ing, adapt­ing and, hope­fully, cre­at­ing it. Adap­ta­tion and lo­cal­i­sa­tion are im­por­tant to avoid go­ing into head-to-head com­pe­ti­tion with global man­u­fac­tur­ers.

Third, the only real se­cu­rity to meet­ing the chal­lenges of au­to­ma­tion is to prep not only our ed­u­ca­tion sys­tems but also our value and be­lief sys­tems and our think­ing sys­tems.

Our fu­ture hinges on in­di­vid­ual com­pe­ten­cies and ca­pa­bil­i­ties. Of this, the great­est will un­doubt­edly be the abil­ity to self­learn.

More than half of the skills that will be needed in the com­ing years are not taught to­day and may not even be taught by ed­u­ca­tional in­sti­tu­tions. It will have to be self-learned.

Pre­par­ing our value and be­lief sys­tems will help us move for­ward.

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