What is the future of work for ASEAN: POST COVID 19?
By Dr Kogila Balakrishnan University of Warwick
WARWICK, UK – Covid-19 has exposed the digital gap within the ASEAN countries and made workers vulnerable. Hence, what can ASEAN countries do to enhance digitization and ensure the future of their burgeoning young workforce?
ASEAN workforce and the digital gap
ASEAN with approximately 650 million people, is one of the most vibrant and diverse economic caucus in the world. In 2019, ASEAN recorded a GDP growth of 4.5% with a moderate unemployment rate of 3.8%; a steady inward FDI totalling $USD 154.7 billion, distributed between services forming ~65% and manufacturing 35%.
Most ASEAN countries have transitioned from the agricultural sector to manufacturing, leading to greater automation.
The ASEAN work force has one of the highest youth population ratios of around 60%. The diversity of the high skilled workforce varies hugely across these countries.
Singapore is at the top of the league followed by countries like Malaysia, Thailand, Brunei and Philippines.
Since the 1990s, Indonesia and Vietnam have been rapidly industrialising especially in technology based skills in line with their rapid focus on automation and now digitization.
Besides a few initiatives in place, most ASEAN platforms actively seek to address the need to move up the industrial and technological value chain, while at the same time develop a skilled work force that is able to embrace new technologies in services and manufacturing.
Capacity Development and Innovation
The ASEAN community embraces a strong culture of learning and investment in capacity development. The ASEAN governments promote a strong state-led policy that provides scholarships to capable students to undertake Masters and PhD in-country and abroad especially in STEM education.
Unfortunately, industry led training and investment into R&D are less rigorous; but there are attractive government incentives for commercial sectors to increase investment in skills development and innovation.
In a recent UK ASEAN Business Council (UKABC) webinar session, it was mentioned that there is a need for the work force to have an innovative and entrepreneurial mindset. It was highlighted that organisations are looking for digital-based values and skills in areas including data analytics, and cyber security. The ASEAN Digital integrated framework Action Plan (2019-2025), and the Guideline to skilled labour in response to digitization were set up for this purpose.
Governments across ASEAN countries are boosting the uptake of technologies across all firms and individuals, ensuring people have the skills to make the best use of them, and putting in place the right infrastructure, macroeconomic and regulatory conditions to enable their economies to adapt to and benefit from the new digital reality. The new norm may require a rapid transformation in changing most work to be done digitally.
However, is the ASEAN workforce geared up for these challenges and is the upskilling within a short duration of time sufficient to meet the demand?
Challenges to Digitization
ASEAN countries were already seeing signs of economic turbulence, due to internal political crisis, but also weaker production and trade protectionism, global economic threats and geopolitical risks.
These phenomena are now predicted to be further aggravated by COVID 19 sending many ASEAN countries into negative growth, massive unemployment and increased poverty. COVID was instrumental in exposing the digital gap and how much needs to be done to upskill the ASEAN workforce.
First, only a fraction of the population, mainly the knowledge workers with access to high speed internet were able to fully work. Second, learning a new skill is hard if it is technical and requires critical and analytical thinking. As digital usage increases, there will be other issues: such as regulations, ethical code of conduct in digital environment, access and handling of data.
In 2016, the World Bank reported that there is a gap between SMEs and large firms in their use of the Internet, with a larger share of major companies operating websites, selling online and accessing broadband technologies than small firms. Further, ASEAN countries may be more susceptible to job losses, due to an over dependency on services rather than manufacturing.
What can ASEAN countries do to ensure the future of their workforce? It is important to ensure the future of the ASEAN workforce, as it is predicted that the ratio of ASEAN youth being in employment is 6.5 times less than in Europe.
First, ASEAN countries should continue to have diverse economies. This is essential as embracing economic complexity provides a wider portfolio of products and services for countries during difficult times.
Second, ASEAN countries have to continue to invest in digital infrastructure, advanced manufacturing technologies, and in alternative energy sources.
It is also important to invest in cyber security capabilities for digital security and privacy, to protect the digital business environment. Education and training offerings must become flexible.
On-the-job training, apprenticeships and opportunities with multinationals should be increased for ASEAN youth to obtain broader exposure to international best practises.
ASEAN countries should put more effort into co-creation of dynamic industrial and technological clusters; such as MIT and Cambridge.
Where industry, government, research organisations and academia support each other, creating a hub for a continuous learning environment, but also the means of solving hard industrial problems and delivering innovation.
These are an aspiration that requires commitment and investments from different stakeholders. The increasing internal political challenges and external security and economic threats facing ASEAN countries may further derail these efforts
Nevertheless, if the ASEAN region wants to have a highly skilled workforce, and to be at the forefront of technology, it is vital for the ASEAN nations to continue to invest in education, training and capacity development.
Dr Kogila Balakrishnan is the Director for Client and Business Development (East Asia) at WMG, University of Warwick. She is a policy advisor and was the former Under Secretary at the Ministry of Defence Malaysia.