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ADB study: government action needed to ensure Asia’s workforce benefit from new technologies

ADB study: government action needed to ensure Asia’s workforce benefit from new technologies

The
Asian Development Bank (ADB) issued
its latest report yesterday on the impact of technological advances on labour
markets in Asia.

New
research on how technology affects jobs, the subject of the special theme
chapter in the ADB’s flagship economic publication, Asian Development Outlook (ADO) 2018 report,
points out that while some of the region’s jobs will be eliminated through
automation, countervailing forces will more than compensate against job
losses. 

The report
found that technological advances have transformed the two billion workers
Asian labour market, helping create 30 million jobs annually in industry and
services over the last 25 years, drive increases in productivity and wages, and
reduce poverty.

Mr Yasuyuki
Sawada, Chief Economist at ADB, said the latest research shows that, on the
whole, countries in Asia will fare well as new technology is introduced into
the workplace, improving productivity, lowering production costs, and raising
demand.

At
the same time, Mr Sawada also highlighted the important role of policymakers in
ensuring that everyone can benefit from new technologies.

“To
ensure that everyone can benefit from new technologies, policymakers will need
to pursue education reforms that promote lifelong learning, maintain labour
market flexibility, strengthen social protection systems, and reduce income
inequality,” Mr Sawada added.

Job displacement VS job creation

The
report acknowledges that advances in areas such as robotics and artificial
intelligence (AI) pose challenges for workers. Jobs that require repetitive,
routine tasks and workers who do not have the education or training to move
easily to other occupations, may face slow growth in wages.

It
was also found that jobs that are intensive in cognitive tasks, social interactions,
and the use of ICT—jobs that tend to be held by the better educated and better
paid—expanded 2.6% points faster than total employment annually over the last
10 years. Moreover, average real wages for these jobs increased faster than for
routine or manual jobs. This would potentially exacerbate income inequality in
the region.

However,
ADB research shows that even in the face of advances in robotics and AI, there
are compelling reasons to be optimistic about the region’s job prospects. It is
because: (1) new technologies often automate only some tasks of a job, not the
whole, (2) job automation goes ahead only where it is both technically and
economically feasible, and (3) rising domestic demand offsets job displacement
driven by automation and contributes to the creation of new professions.

ADB’s
analysis of employment changes in 12 economies in developing Asia from 2005 to
2015 strongly supports the idea that rising domestic demand more than
compensates for job losses associated with technological advances.

Furthermore,
analysis of a broad array of data shows that many new job titles have arisen in
ICT, and new types of jobs will arise in healthcare and education, as well as
in finance, insurance, and real estate.

The role of policymakers

As
the report highlights, policymakers will have to be proactive if the benefits
of new technologies are to be shared widely across workers and society.

Governments
will need to respond to the risk of workers being left behind by ensuring that
they are protected from the downside of new technologies and able to take
advantage of new opportunities. This will require coordinated action on skills
development, labour regulation, social protection, and income redistribution.

New
technologies can help deliver solutions in many of these areas. Adaptive
learning technology, an educational method that uses computer algorithms
designed to adjust to individual students, has enhanced learning outcomes in
schools; governments should use and promote their adoption.

Similarly,
technological advances in biometric identification can improve how social
protection programs function by reducing costs, overcoming implementation
challenges in sophisticated unemployment benefit systems, and enabling the
tracking of job-placement services.

At the same time, governments also need to
ensure that the development of new technologies take place in ways that benefit
people and protect their rights and privacy, by, for example, protecting
personal data.

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