How Asia Will Be Impacted By An Automated Workforce

The International Labour Organization recently released a study outlining that more than half the workforce in five Southeast Asian countries are at high risk of losing their jobs to automation in the next two decades. In hard numbers that equates to around 137 million workers across Cambodia, Indonesia, the Philippines, Thailand and Vietnam.

In Hong Kong, the theory is that since reliance on the manufacturing of the 1980’s is now replaced by a thriving service sector, the impact on the workforce will be less given that the pace of automation in service industries is slower than in manufacturing. A McKinsey analysis puts 25 per cent of job activity at Hong Kong being at risk from automation in the mid-term, compared to the 51 per cent which has been predicted for China as a whole.

Elon Musk, the founder of SpaceX and Tesla has perhaps been the best known figure to speak out publicly to offer his opinion on automation, or more specifically Artificial Intelligence in the form of robots. He has called the pursuit of advances in AI, “summoning the demon”. This is at one end of the extreme where he fears that AI could advance out of the control of human beings. However, there is definitely an ongoing debate about consequences of automation on labour and economic markets.

Automation optimists believe that new forms of technology will lead to higher labour productivity within the workforce. Others predict that gains from productivity growth will only go to a small group, those who own the data, algorithms, and intellectual rights which will be driving this automation. The majority of working people will see their wages fall and jobs lost, according to the pessimists, leading to an oversupply of labour and decreased consumption overall.

Regardless of which prediction will come true, one certainty is that a large proportion of human activities will be replaced. So should we sit back and be overwhelmed, or should we look for the silver lining amid automation meltdown?

Four areas of opportunity stand-out whereby companies and their employees might actually benefit from the rise of automation and robots.

Better Customer Experience

With increased automation, one fear is that businesses will not need the same amount of manpower as they do currently. However, this ignores the fact that even in an automated environment, there will still always be a competitive landscape. Automated McDonalds will still compete with automated Burger King. Perhaps the area of differentiation is how they will use humans to enhance customer experience. You can already see this trend at Starbucks where an attendant walks down the queue taking order on a payment processing device which then gets relayed to the baristas and cashier.

Increased Quality Of Life

One of the limitations of human beings is that we are, afterall, human. This means that we get tired, emotional and constantly change our levels of concentration and productivity. We cannot ultimately sustain an optimal level of performance over long periods of time. The improvement in the the quality of individual mental and physical health once certain monotonous tasks are delegated to robots could be dramatic.

Enhanced Customer Experience

With increased automation, one fear is that businesses will not need the same amount of manpower as they do currently. However, this ignores the fact that even in an automated environment, there will still always be a competitive landscape. Automated Starbucks will still compete with automated Pacific Coffee. Perhaps the area of differentiation is how they will use humans to enhance customer experience. You can already see this trend at Starbucks where an attendant walks down the queue taking order on a payment processing device which then gets relayed to the baristas and cashier.

Job Creation Through Robots

Every technological revolution was anticipated nervously with regard to the potential for huge unemployment across the workforce. However, what actually materialized was a creation of employment opportunities in areas that had previously not been thought of. Often, these were skilled labour jobs that supported the newly automated areas and were higher paying. This is a good thing. A rise of the robots scenario may also force governments to trim bloated public sectors, up-skill their populations and put them back to work in the new look employment market.

Whilst each Asian economy tracks it’s individual economic evolution, it will be crucial for those in power to understand the impact of automation on the labour markets.

Whilst opportunities exist to make workforces more productive, only by exploring the specific impact on each sector of the economy, can those opportunities truly be realised, and the prophet of automation armageddon avoided.

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