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Singapore workers worst hit by impact of AI in ASEAN

About a fifth of Singapore’s workforce will be displaced by technology adoption by 2028, the worst hit among workers in Southeast Asia

Nearly 21% of full-time workers in Singapore could lose their jobs from greater adoption of technologies including artificial intelligence (AI) and robotics over the next decade, more so than other Southeast Asian nations, a new study has found.

Conducted by Cisco and Oxford Economics, the study – which analysed 433 occupations across 21 industries in six ASEAN countries – noted that Singapore’s higher job displacement rate is not a case of “technology catch-up”, but rather a result of having an “exceptional” environment for innovation and digital transformation.

Singapore’s small geographical area and modern, upgradeable infrastructure also means that businesses can readily take advantage of new innovations as they become available, it added.

Vietnam and Thailand are next in line, with 14% and 12% of jobs displaced by technology, respectively.

“The drivers here are different to Singapore, in that many more Vietnamese and Thai workers are projected to be displaced from much-less productive, more monotonous jobs. Both economies see agriculture workers displaced in large numbers – mostly unskilled labourers in Vietnam, and skilled agricultural workers in Thailand,” it said.

Although there were more workers displaced in Indonesia, Malaysia and the Philippines in absolute numbers than in Singapore, the impact of technology adoption is smaller as a share of the workforce in the three countries.

In Indonesia, for example, Cisco’s team of experts assembled from technology, consulting, government and other sectors to develop the study noted that the slower pace of technological change was likely dampened by institutional and political constraints to automation, as well as the abundance of cheap labour.

Read more about AI in ASEAN

In Malaysia, concern over labour market protection was evident. In the Philippines, the experts said a large, low-skilled rural population was seen as a likely break on technological progress, since a cheaper supply of labour would make the widespread adoption of technology uneconomical.

Although the study concluded that 6.6 million jobs across ASEAN will be displaced by technology, more jobs will be created with higher spending power, thanks to lower prices arising from lower production costs driven by the use of technology.

This so-called “income effect” will create demand for more jobs across the ASEAN economy, including wholesale and retail, manufacturing and agriculture, with a combined gain of over 15 million jobs.

But to take on these new jobs, workers will need a set of skills which are currently lacking in ASEAN.

“Our analysis reveals that 41 % of that 6.6 million cohort are ‘acutely lacking’ the IT skills that new jobs will be demanding. Almost 30% lack the ‘interactive skills’ that will be demanded by future vacancies – such as negotiation, persuasion and customer service skills.

“Just over 25% also lack ‘foundational skills’ – such as active learning, reading, and writing skills that are required to a much greater extent in ASEAN’s future labour market,” the study noted.

Working together

In its report, Cisco called for governments, businesses, educational institutions, technology suppliers and workers’ groups to work together to provide workers with the necessary tools and skills to mitigate the negative impact of technological change.

Governments across the ASEAN region are already doing so, starting with Singapore which recently launched new initiatives to broaden access to AI skills.

In neighbouring Malaysia, the government has also started to introduce computational thinking skills in school curriculums, as well as nurture its existing pool of skilled workers through certification programmes.

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