Automation dividends show plenty of returns for the required transition

Updated: Aug 25, 2021




Supplementing automation across entire economies in Southeast Asia will be a difficult and painful transition, but could hold enormous returns on investment once complete. That was one of the key findings of a recent Deloitte report, which noted that the ASEAN region stood to gain disproportionately from the process of automation in industry, even more than other regions around the world.


Although critics argue that automation will result in job losses, the consultancy firm argues that automation will create more jobs, and higher value jobs, than the process will cause to be redundant. Disruption is a natural stage in the economic growth cycle and as such automation should not be feared or avoided, the authors advised.


The report stated that being proactive and preparing for change can mean that individuals, industries, and nations can share the benefits automation offers. This will create new job opportunities and in turn, will change the nature and requirements for the workforce and workplace.


For example, in Singapore, artificial intelligence specialists were among the fastest-growing job categories, according to LinkedIn, between 2008 and 2017. The report collated data from multiple sources and analysed the impact of the upcoming automation wave on different industry sectors across markets. Construction topped the charts as the industry most likely to be hit by the automation wave, since it has the highest proportion of routine, manual tasks that are ripe for innovation.


The agriculture sector is also likely to face the automation wave strain. In contrast, industries like health, education, and financial services had a comparatively lower impact score.


The report also revealed a high-level summary of the level of preparedness for the automation wave for a few Southeast Asian countries. Singapore has the least amount of risk in the agriculture, logistics, and construction sectors. It ranks second for preparedness and is the least at risk from automation. In addition, it scores highly on the proportion of the population covered by social protection measures.


In comparison, Vietnam ranks seventh for risk of automation and eighth for preparedness. Its government research and development expenditure equated to 9% of GDP, which was low in contrast to its neighbouring countries. At the same time, its workforce has the highest labour underutilization rate out of all countries in the region.


Indonesia ranked third for risk of automation and seventh for preparedness. It scored the second-lowest for the number of firms offering formal training and the third lowest for the amount of research and development expenditure as a proportion of GDP. The low skill level of the labour force in Indonesia increases the disadvantage encountered by workers displaced by automation.


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