Millions in South East Asia to lose jobs to automation

Posted on 17 Jul 2016 by Michael Cruickshank

A new report by the International Labour Organisation (ILO) has predicted massive job losses in South East Asia due to increasingly automated manufacturing.

The study, which looks at trends for the coming two decades, shows that more than half of all manufacturing jobs in some countries in the region are at risk.

All up, 56% of the workforce in Cambodia, Vietnam, Thailand and the Philippines is at high risk of losing their jobs due to automation, a figure that represents 137 million people.

“Countries that compete on low-wage labour need to reposition themselves. Price advantage is no longer enough,” said Deborah France-Massin, Director for the ILO’s Bureau for Employers’ Activities.

“Policymakers need to create a more conducive environment that leads to greater human capital investment, research and development, and high-value production.”

Within these countries the most at-risk sector was clothing, footwear and textiles manufacturing.

The manufacturing of these items was considered low-skill, and likely to be re-shored back to western counties as robotic manufacturing develops. Such a trend could already be beginning, as evidenced by Adidas re-establishing manufacturing in Germany with heavy use of automation.

Of the currently 9 million people who are employed in this sector in South East Asia, a significant majority are low-income women, particularly at risk from displacement.

Another sector at risk from automation is automobile and automotive parts manufacturing. This sector currently employs 800,000 people in the ASEAN region, and, according to the ILO report, 60% of positions in Indonesia, and up to 73% in Thailand are at high risk in the coming two decades.

Education as a solution

The report states that in order to avoid these projected job losses, countries in the region need to invest in education and increasing worker skills.

Particularly, the ILO recommends workers – especially women – seek qualifications and degrees in the fields of science, technology, engineering and mathematics (STEM).

As well, the report states that widespread use of robots does not automatically lead to job replacement, and instead there is a trend towards humans working collaboratively with robotic systems.