Millions of ASEAN jobs vulnerable to automation, says International Labour Organization

Author: PM editorial | Date: 3 Aug 2016

HR and accounting among the sectors at risk as business process outsourcing gets overtaken by technology

Disruptive technology will put millions of jobs at risk of automation over the next 20 years, a new report from the International Labour Organization predicts.
 
ASEAN in transformation: How technology is changing jobs and enterprises, suggests that business process outsourcing (BPO), which currently provides employment around one million people in the Philippines alone, is one of five industries set to see big changes because of automation. Electronics, automotive and auto parts, textiles and retail face similar disruption.
 
BPO involves contracting out specific business processes to third-party providers. Typically, HR and accounting tasks feature heavily among the type of work that is outsourced.
 
“ASEAN’s BPO activities predominantly take place in the Philippines,” said the ILO. “It was an industry born out of technological advancement that is now on the cusp of major changes due to technology. Cloud computing, software automation and knowledge process outsourcing are three technologies impacting this sector.”
 
The Philippines aside, the ASEAN countries most at risk – with a large proportion of lower-skilled labour among the workforce – are Cambodia, Indonesia, Thailand and Vietnam.
 
Popular discourse has traditionally suggested that manufacturing and production industries face the greatest disruption from new technology, as evidenced by robotic arms assembling cars on a production line. But the ILO sees the IT-based office job as equally vulnerable.
 
“Proponents advocate that technology enables people to be freed up from monotonous, routine tasks to perform value added work that is more innovative, improves workplace productivity, and enhances product quality,” said the report. “On the other hand, critics voice grave concern regarding the possible massive displacement of jobs. However, such generalisations do little justice to this topic. The reality is much more complex.”
 
While cloud computing likely means a growth in BPO for the Philippines, software robots or robotic process automation (RPA) could be a threat to longer term threat, claims the ILO. Software robots are not only able to perform tasks quickly, but can also learn from experience and improve their execution after each operation. They can work around the clock, are less error prone, and present a solution to problems related to high turnover of workers which characterise the sector.
 
Malaysian prime minister Najib Razak recently said he would like his country to reduce its dependence on foreign labour and boost productivity by embracing new technology.
 
However, the labour-intensive textile industry provides more than nine million jobs across the ASEAN, mostly for women, and is at the mercy of highly competitive multinational brands and retailers who will look for the most cost-efficient way to produce their goods.