The changing nature of work

The World Bank recently reported its latest study on East Asia and the Pacific entitled “A Resurgent East Asia: Navigating a Changing World” and is available from the World Bank East Asia and Pacific Regional Report website.

Technological advances and the advent of artificial intelligence are both opportunities and threats to employment

Many insights can be derived from this study whose findings and policy recommendations support several of the Employers Confederation of the Philippines advocacies.

The report covers East Asia, which includes the Philippines, and cites the “East Asian Miracle” that has transformed the region over the past many decades from low- to middle- and for some even high-income economies, using a development model that promotes “outward oriented and labor-intensive growth, development of human capital and sound economic governance” strategies. While these have lifted many in the region to middle-income status, much work still needs to be undertaken and challenges overcome in the midst of a complex and ever-changing global economic environment to achieve high-income status. Specifically, “slowing growth in global trade and shifts in its patterns, rapid technological change and evolving economic circumstances within countries all present tests to sustaining productivity growth, fostering inclusion and enhancing state effectiveness.”

These factors pose considerable challenges for us as far as its impact on the nature of work is concerned and, concomitantly, on our ability to reskill our workforce to enhance our overall competitiveness. The slowing growth in global trade in manufactured goods and the shift in favor of services and technological change would require demands for new and advanced sets of skills. With the prevalence of low-skilled labor in many of our labor-intensive, export-oriented industries, attaining inclusive growth for those who are unable to adapt and reskill themselves to the new demands are left out. Another obstacle is the availability of the necessary infrastructure in digital technologies and platforms to make them accessible to many.

Technological advances and the advent of artificial intelligence are both opportunities and threats to employment. While technology has become a major enabler of globalization, the evolution and nature of technological advancement can reduce offshoring business, particularly for those firms whose investment decisions are driven by capturing the differences in the cost of labor resources.

As the use of new technology and automation becomes widespread resulting in rapid fall in cost and higher productivity, many jobs may be eliminated. Such is the case in the automobile industry with the application of robotics on the shop floor. Another is the reshoring of production or the reverse of offshoring, thus reducing further the demand for low-skilled, routine, physical and manual work in regions like East Asia where the cost of labor has been a deciding factor for many locators. However, technology and automation also create new jobs requiring new and advanced skills, such as digital and technological skills and new business models.

The changing nature of work disrupted by technological change requires reskilling, continuous capability building and investments in technology-based infrastructure. On the social aspect, safety nets for displaced workers unable to make the transition must be instituted to address the risk to inclusion.

Government, employers, workers, labor unions and academia need to work together to make this transformation successful. Critically important for capability building is the collaboration with skills training institutions and academe for more industry-focused curricula development. Tripartism, one of ECOP’s advocacies, must be strengthened to reform our labor laws and regulatory environment, which are mainly based on an antiquated and inflexible labor code. As the nature of work evolves to cater to a rapidly changing environment largely driven by technological advancement, organizations need to adapt to be more flexible and responsive to the demands arising from a new set of working relationships and arrangements across all sectors of the economy that are vastly different from what we have now.