NURTURING POOL OF TALENT
The region should leverage its growth potential and the labour force skills to achieve its goal of becoming a highly competitive region, writes PHIDEL VINELES
ASEAN is projected to become the fourth largest economy in the world by 2030. The region’s gross domestic product is predicted to be around US$4.7 trillion (RM18.3 trillion) by 2020, double its current size. This is supported by the region’s key economic achievements. For example, its average annual real growth rate is 5.3 per cent and total trade increased by US$700 billion between 2007 and 2015.
However, greater efforts should be made to harness the full potential of Asean’s labour force.
The region has the third largest population in the world with more than half under the age of 30. Despite its vibrant demographics, a shortage of industry ready skilled workers poses a great challenge to realise Asean’s economic vision.
The challenges on the skills front vary widely among Asean countries. It is important, therefore, to determine the workforce characteristics of each country to respond to industry’s demands of job-specific skills.
According to a joint study by J.P. Morgan and Singapore Management University , the five core members of Asean — Singapore, Malaysia, Thailand, Indonesia, and the Philippines — are confronted by a shortage of industry-ready skilled workers. This challenge should be the region’s main concern, especially because of Asean Economic Community’s vision of fostering robust productivity growth through human resource development.
The study also said that Asean5 represented one of the most promising growth regions in the world, which meant equipping their labour force with job-specific skills was necessary to increase the region’s competitive edge in higher-technology and knowledge-intensive industries.
Singapore is a high-income economy, but presently faces a tight labour market because it relies heavily on foreign labour. Nevertheless, the country has a largely skilled and educated workforce to pursue an innovation-driven growth strategy. It is impressive to know that business leaders, training institutions and labour unions all participate in Industry Skills and Training Councils to determine industryspecific demands.
However, a study by the International Labour Organisation said Singapore was facing the challenge of strengthening the role of innovation in its educational and training institutions, especially in keeping up with the latest technology for the workforce.
Meanwhile, Malaysia and Thailand are moving towards technologyand knowledge-intensive industries to break out of the middle-income trap.
The study noted that both countries faced similar challenge of equipping their workforce with the necessary engineering and science skills. There is also a need to broaden the appeal of technical education to students.
Indonesia and the Philippines, on the other hand, have a young and growing workforce but faces a challenge of equipping them with the basic knowledge and skills required by key industries. Because of this, high youth unemployment rate is persistent in both countries. There is also an exodus of workers from both countries that can potentially reduce their supply of skilled workers.
More attention should also be given to other Asean countries. Brunei acknowledges that its future requires moving away from an oil-based economy to a knowledge-based economy, according to ILO’s study. However, the country faces the challenge of equipping its workforce with skills in innovation and research and development.
Meanwhile, the CLMV countries (Cambodia, Laos, Myanmar, Vietnam) need to have a more coherent technical and vocational education and training system for industrial development.
Both the public and private sectors have key roles to play in strengthening the skills of Asean’s labour force. The public sector should coordinate with the industry to help companies meet their skills’ demands.
This role should be in the form of being a facilitator that will help private companies to meet their needs. Government facilitation should be in the form of providing incentives to companies which provide training schemes for their employees.
The study recommended that governments work with the private sector and educational institutions to develop a comprehensive roadmap for skills development. The roadmap should provide a projection of supply and demand for skills needed in key industries of each Asean member state.
Another way to step up the skills of the labour force is through upgrading the skills of the SME workforce. These enterprises are undeniably important in the Asean economy because they provide between 60 and 97 per cent of total employment in the region. This can be done by encouraging multinational companies and corporations to provide training schemes for the workforce, especially since some of these enterprises supply component parts to international manufacturers.
Emphasising the importance of TVET education must be also prioritised in all Asean member states. According to the study, educational curriculum should increase the emphasis on TVET and STEM education (science, technology, engineering, mathematics) to help the youth acquire industry-specific technical skills. It should also address the problem of youth unemployment in the region due to skills mismatch.
It is stated in the AEC Blueprint (2016-2025) that Asean’s longterm competitiveness rests on the labour productivity of member states. Hence, Asean should invest in human capital development to prepare the region’s labour force to meet industryspecific skills’ demands. Doing this is critical for Asean to become innovative and competitive, which will allow member states to respond to the trends that continually reshape the demand for skills.
As Asean approaches its 51st anniversary this year, greater efforts should be made to improve the region’s labour productivity. Skills development must be prioritised to realise Asean’s economic vision of productivity driven growth.
According to a joint study by J.P. Morgan and Singapore Management University , the five core members of Asean —
Singapore, Malaysia,
Thailand, Indonesia, and the Philippines — are confronted by a shortage of industry-ready skilled workers.
The writer is a senior analyst with the Centre for Multilateralism Studies (CMS) at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore