Skillset expansion is needed to ready ASEAN for industry 4.0

Improving skills by way of education only is not enough, according to experts

The member countries of the Association of Southeast Asian Nations (ASEAN) Economic Community (AEC) need to expand the remit of skillsets identified in their blueprint to ensure greater labour mobility during the fourth industrial revolution, according to a leading economist in the region.

While much of the work towards this needs to be done at a national level, there is still a crucial role for regional HR experts to play, Anne Fink, an economist at the Philippines-based Asian Development Bank, told People Management.

Strengthening relationships among professional bodies and creating partnerships with education institutions could “help increase the pool of labour that knows about opportunities”, said Fink.

Currently, the 10-country bloc has agreed mutual recognition arrangements (MRAs) designed to harmonise educational qualifications in seven sectors across the ASEAN region: architecture; accountancy; medical; dentistry; tourism; nursing and engineering. But these efforts to raise capability need to expand to incorporate new, emerging skills used by “problem solvers, creative thinkers and ICT professionals of all levels and grades” as industry 4.0 sweeps into these professions, Fink said.

Her comments followed an ADB report published this month, ASEAN 4.0: What does the fourth industrial revolution mean for regional economic integration?, in which the bank urged the AEC to expand the scope of skills identified for harmonisation. Such skills needed will “centre not only on technical capabilities but also on creativity and innovative problem-solving”, the report said.

However, even if ASEAN responds by upgrading its MRAs, that alone will not solve the problem. Existing commitments on harmonising and streamlining employment visas are important, but programmes that help workers overcome language and cultural barriers to movement also need to be prioritised for effective labour mobility, according to the report.

Unlike previous industrial revolutions, where new technologies saw more jobs being created and new industries growing, the “outlook is less positive” with industry 4.0. Quoting the International Labour Organisation (ILO), the ADB estimated that 56 per cent of jobs in five ASEAN countries (Cambodia, Indonesia, Vietnam, Thailand and the Philippines) are at high risk of automation in the next few decades.

But what makes matters worse is that while jobs are being lost to automation, the workforce in ASEAN is still forecast to grow by 11,000 new workers every day for the next 15-17 years. As a result, in the short term at least, “it is likely that unemployment will increase,” it said, adding this would lead to a higher number of economic migrants within the ASEAN region. Retraining and skills development may cushion the impact of automation, but it will not prevent deep disruption.

ADB experts acknowledged efforts at a national level to improve skills by way of education, but noted it was simply not enough. There is “an important regional dimension” to it, the report said, urging member countries to improve online education that will give students access to learning opportunities beyond their borders. Equally, the expansion of existing credit-transfer systems between ASEAN universities would help build cross-border personal and professional networks which will be crucial for the worker of tomorrow, it noted.

More effective labour mobility can have a significant impact on the region’s economies, the World Bank said in its October 2017 report, Migrating to Opportunity: Overcoming Barriers to Labour Mobility in Southeast Asia. Increased mobility would “improve workers’ welfare – by 14 per cent if only targeting high-skilled workers, and by 29 per cent if including all workers,” said the report.

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