This week I moderated a panel on the subject, at the Horasis Asia Meeting which took place in Binh Duong Province and I thought I would share some of the key points from the discussion.
The Impact of technology and globalization on Asian labour markets has emerged as an important policy issue as millions of jobs may be lost in the coming years. It will be challenging but possible to absorb these workers given greater investment in as yet unknown industries.
According to one of my panelists Mckinsey estimates that 400 million jobs will be lost because of the impact of technology whereas 500 million new jobs will be created.
For many developing nations, globalization has led to an improvement in standards of living through improved roads and transportation, improved health care, and improved education due to the global expansion of corporations. This is particularly true for Vietnam where FDI has seen massive growth in manufacturing and utilization of low-cost labour. Today FDI companies account for close to 70% of total exports.
One of Vietnam’s lingering challenges which I have previously commented on is the slow growth in labour productivity. New technologies drive higher productivity, the foundation for better-paid jobs and economic growth. While new technologies displace jobs, they also unleash countervailing forces that generate more jobs. As some workers may be left behind, governments in developing Asia should respond to this challenge by ensuring that workers are protected from the downside of new technologies and prepared to harness the new opportunities they provide. This will require coordinated action on skills development, labor regulation, social protection, and income redistribution.
New jobs will appear, but they may require skills that such workers do not possess. Further, as firms and industries adjust to new ways of producing and distributing goods and services, the resulting disruptions along existing supply chains may cause unemployment.[1]
The conclusion was that as in the case of Industry 1.0 (mass production and steam), Industry 2.0 (mass production driven by electricity) and Industry 3.0 (Computers and Customisation) Industry 4.0 is not likely to lead to an overall reduction in jobs but it will require governments in developing Asia to respond to this challenge by ensuring that workers are protected from the downside of new technologies and prepared to harness the new opportunities they provide.
Kenneth M Atkinson
Founder & Senior Board Adviser
Grant Thornton Vietnam
[1] Asian Development Bank Outlook 2018:How technology affects jobs.
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