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Major APAC economies to lose 63 million jobs to automation

Workers in India, China, South Korea, Australia and Japan are more at risk of losing their jobs to automation, despite the creation of new jobs in the green economy and ICT industry

Workers in the five largest economies in Asia-Pacific (APAC), India, China, South Korea, Australia and Japan, are more at risk of losing their jobs to physical robot automation than their counterparts in Europe and North America, a Forrester study has found.

By 2040, 63 million jobs in the region are expected to be lost to automation, with more than 247 million jobs expected to be in jeopardy across industries that are more susceptible to automation, such as construction and agriculture.

The job losses will be offset by the green economy as more countries commit to carbon neutrality in the coming years, according to Forrester’s Future of jobs forecast, 2020 to 2040 report. India, China, South Korea, Australia and Japan will create 28.5 million new jobs in renewable energy, green buildings, smart cities and smart infrastructure, and professional services by 2040.

But even with the creation of new jobs in the green economy and information and communications technology (ICT) industry, 13.7 million jobs in the region will be lost to automation across wholesale, retail, transport, accommodation and leisure sectors.

Each country faces different challenges. In Australia, the country’s high gross domestic product per worker incentivises firms to automate jobs to improve productivity and reduce labour costs. As a result, it will see 11% of jobs lost to automation by 2040. Jobs across consulting, scientific and technical services, which are harder to automate, will see the fastest growth, especially in the ICT industry.

In China, the working population is expected to decline by 11% by 2040, with 7% of jobs expected to be lost to automation. Job growth in the ICT industry will help offset automation job losses, with 3.8 million additional new jobs created by 2040.

India, the other Asian giant, will add 160 million new workers over the next 20 years, bringing its working population to 1.1 billion by 2040. Although 69% of India’s jobs are under threat from automation, the country’s main priority will be job creation to accommodate new workers entering the workforce.

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As for Japan, which has been grappling with an ageing workforce and low birth rates for a while now, the working population will contract by 19% between 2020 and 2040, before declining by almost one-third by 2050. In South Korea, which is also ageing and depends on construction and agriculture that are susceptible to automation, the number of workers will decline by 23% over the next two decades.

“To prepare for the changes brought on by automation, the five largest economies in APAC will have to radically rethink their workforce strategies,” said Michael O’Grady, principal forecast analyst at Forrester.

“While each economy faces its own challenges, common focus areas such as hiring more female workers can help offset working population declines. In addition, investing in STEM [science, technology, engineering and mathematics] education, technology workforce training and protecting the rights of freelance workers will become of utmost importance.”

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