Technology & Jobs: A New Podcast from ADB
Article | 2 May 2018
- What will an automated Asia look like for countries and workers? Find out on ADB's new Technology and Jobs podcast
- As technology extends into Asian workplaces, our anxieties are accelerating together with technology itself. Technology and Jobs podcast
- Globalization is the force behind Asia’s economic rise, but technology is upending our understanding of development. Technology and Jobs podcast
- Preparing the workforce of tomorrow is the best way for Asian countries to confront accelerating technological change. Technology and Jobs podcast
ADB’s Technology and Jobs podcast is a four-episode series focused on the impact of technological change on labor markets – from an Asian perspective. We look at how the workplace is being transformed by technology and what that means for the workers of today as well as those who are going to be doing the jobs of the future.
Join host Erik Churchill and leading ADB economists and experts as they explore different aspects of the ongoing debate about how countries can address rapidly advancing technological change, how economies can implement productivity-enhancing technologies while protecting workers, and the way that policymakers and workers can respond to the automated revolution in the workplace.
The issues explored in the podcast are based on research from ADB’s report, How Technology Affects Jobs, which can be found in Asian Development Outlook, published in April 2018.
Episodes are available on the Soundcloud player below.
Episode 1: The Future of Work
Erik Churchill: Welcome to episode 1 of the Technology and Jobs podcast from the Asian Development Bank. I’m Erik Churchill. In this series, we’re looking at the transformative changes underway in Asia’s workplaces, and how this will challenge workers and policymakers alike. This program is coming to you from Manila, the bustling, hyperactive capital of the Philippines. Metro Manila is home to over 15 million people and is one of the most densely populated cities in the world. I’ve come to the Ortigas neighborhood – an area that’s filled with skyscrapers, hotels, and shopping malls. In fact right now I’m standing in Mega Mall – one of the biggest shopping centers in the world – a mecca to consumerism and bling. This endlessly busy place embodies the transformation not just the Philippines, but all of Asia is undergoing. Economies across the region continue to expand at breakneck speed, the leaders in global growth. This has brought amazing new opportunities for Asia’s 2 billion strong workforce. But while there’s palpable energy that has accompanied this growth, there’s also uncertainty – particularly among many young people - about the future of work and whether the opportunities their parents have enjoyed will be passed down to future generations.
Guest Camille: My name is Camille, I’m 25 years old. I am a Bachelor of Science in electronics engineering, I’m a networks engineer as well. I think 10 years from now most things will be automated. Technology is evolving and we can’t really avoid it.
Erik Churchill: She is not alone, at a time and in a place where technology is changing the workplace in a multitude of ways. In this series of podcasts, I’ll be joined by experts who will bring their unique insights on how technology will affect the future of work. With me throughout the series will be economists Sameer Khatiwada and Elisabetta Gentile from ADB’s economic research department. We’ll be exploring the role of robots, automation, globalization, and education – all from an Asian perspective. Elisabetta, are we in the midst of a technological revolution?
Elisabetta Gentile: Absolutely, yes, and what makes this a revolution is not the technologies themselves, because these are technologies that have been around for a really long time. If you think of industrial robots, wireless connectivity, or digital platforms, well, we have had them for some time. But what makes this moment special is that we are getting these technologies to interact with each other in a way that we haven't before. We are creating systems in which the robotic arms communicate with each other. They generate data that is fed to the human component in the system. The human component uses this data to make decisions that will boost productivity even more. So, this is really an unprecedented moment in history.
Erik Churchill:But what does that mean for workers?
Elisabetta Gentile: Well, what it means for workers, potentially, both good news and bad news. Good news because these momentous technological advances always create new jobs, and this is something that we have seen over and over in history, but it's also bad news because these jobs are different from the jobs that have been misplaced and they require workers to learn some new tricks to be able to participate in the new economy.
Erik Churchill:So, Sameer, it sounds like Elisabetta's pretty optimistic, but with a few caveats. What do you say?
Sameer Khatiwada: I raise the question, is this time different, when you asked, are we in the middle of a technological revolution. I have to say yes and no. I'm leaning more towards no because - and I'll give you a few reasons why I say that. So first I'm going to raise the question, is this time different? That's one way of understanding whether we are in the middle of a revolution or not. You know what, to be honest with you. I'm not so sure if this time is any different than before. Let me give you a couple of examples. Electricity, second industrial revolution. When electricity came it transformed the way we organize ourselves, the way we produce goods and services. It transformed everything. It raised productivity, it raised earnings. When computers came about, third industrial revolution, yes, it also changed everything. There was that anxiety over this - these new types of technologies, but they didn't lead to any kind of massive dislocation. They led to dislocations, but they were of a temporary nature. In the long run, we created more jobs, we created more prosperity and the world improved. In the context of Asia, I would like to point out that Asia has gotten significantly richer since the '60s and the '50s, after the Second World War. You look at it across the region, the region has done really well. There are two reasons why the region has done really well. One is we have been able to raise productivity within different industries, so agricultural productivity also went up. Productivity in manufacturing also went up because of technology, because of electricity, because of new machines, industrial robots. But also, we managed to move people out of agriculture into industry and services. This region did really well because of technology. Looking ahead, this is going to continue, but I don't really think that what we are seeing, looking ahead, is any different.
Erik Churchill:I just want to push back on something you said. You talked about the second and third industrial revolutions not causing massive displacement, and I can see that. From an economic point of view, there definitely hasn't been some great age of technological unemployment, but cities like Birmingham, England, or Detroit, Michigan might argue that, actually, some of this dislocation has been pretty severe and long lasting.
Elisabetta Gentile: Well, it's true. There are winners and losers from these changes and this is something that cannot be overlooked. The issue here is, do we sacrifice the wellbeing of the society collectively for the wellbeing of smaller groups? When total output, when total income increases in society. It is true that we have to find ways to address those who are left behind, those who are somehow excluded from these new opportunities, but this does not make a successful argument, in my view, for halting this process.
Sameer Khatiwada: I would have to agree with that. Look, in this study, that we do find that people at the lower-skill spectrum, doing relatively high shares of routine tasks in their jobs, are people that are being affected more so. But then there are jobs that are being created in your non-routine, cognitive types of jobs. This is actually good news for workers across the region. But you brought up Birmingham, England, and then Detroit, those regions, they used to be manufacturing hubs. They are no longer that. But there were jobs that were created in those countries in services, in high-value services, and maybe those workers should have been somehow helped in transitioning to those new types of jobs. Maybe that's where the failure of government policy was. But in our region, we're still looking at a growing manufacturing sector, growing industries. So, I see that we will still be creating jobs in these industries.
Erik Churchill:One thing that's not clear is, what is the scale of this? What are we talking about in terms of the kinds of technologies that are changing the workplace and what are we talking about in terms of what this means for 60% of the world's workers?
Elisabetta Gentile:It is important, first of all, to remember that when we talk about Asia we are talking about perhaps the most diverse regions in the world in terms of stage of economic development. So, on the one hand, you have countries like Japan, which has been, for decades, one of the most industrialised countries in the world. But then you have also some of the poorest countries in the world, where advancing technology, increasing productivity still means connecting villages to the electrical grid. So obviously there is quite a big - large scope. In both situations there are - there is a large scope for productivity increases and for a boost in employment, but in a very different way.
Sameer Khatiwada: Just to add to that, in Nepal, it recently made news that now electricity is available to all the people living in Nepal. That was the headline. As I was working on this study, I'm from Nepal, so I was reminded that, okay, the second industrial revolution has finally arrived in Nepal and here we are talking about the fourth one. So that shows the diversity of the region, so a country like that is not quite there yet. But when you talk about the scale, you can pick a few sectors in different countries, like you pick garment in Bangladesh, you could pick BPOs in the Philippines, to get an understanding of what we mean by how new technology could be changing the labor landscape in the region. Take the BPOs, for example. BPOs…
Erik Churchill:Right, okay, so what is this?
Sameer Khatiwada: It's business process outsourcing, which is basically - when you call Dell customer service or American Express customer service, it arrives in the Philippines. The Philippines has done really well in this type of business services. Here, the fear is, because of AI, that a lot of these call center jobs could be automated. The technology has improved significantly. But it's about a million workers in this sector directly employed, but this has huge economic consequences for the country. If something were to happen to this sector, the Philippines would feel it.
Erik Churchill:What do you mean when you say that AI, artificial intelligence, is changing these jobs?
Sameer Khatiwada:So basically, it is where when you make a phone call, your American Express card, you make a phone call, it arrives in the Philippines. So, the technology has improved so much that it can answer your questions without you ever talking to a person. There are all these steps and they have improved because of this technology, which is, basically, it uses artificial intelligence and it uses what we call machine learning. It uses a combination of new technologies to provide a good service - customer service experience.
Erik Churchill:So how long has this industry been around?
Sameer Khatiwada:It's a little over a decade.
Erik Churchill:Okay, so it's a decade old and yet we're already talking about these jobs being replaced? That sounds like breakneck advances that are going to kill jobs.
Elisabetta Gentile:If I may add something to this conversation, I think business process outsourcing is a great example of, what I like to remind people when I discuss this topic, is the fact that, as consumers, we are learning to differentiate the products that we are offered and we are learning to attach a price premium to something that matters to us. I'm sure all of you have experienced service delivery automation when you are talking to a computer who is not understanding maybe your accent. I am sure that if there is a credit card company out there who will promote, “you will always talk to people when you call us,” people will actually be willing to pay a little bit more of an annual fee, credit card fee, just to make that happen. This human interaction is something that people are willing to attach a price to.
Sameer Khatiwada:I would have to disagree with that. You know why? Because, actually, when I spoke to the BPO executives in the Philippines, something amazing that came out of those conversations is that one of them pointed out, actually, there's a generational difference what people prefer when it comes to customer service. They pointed out that people who are [part of the] younger generations - I guess we're now going into the not-so-young generation anymore. But there, the preference is not to talk to anybody. You could automate away everything because people like texting. They don't want to talk, apparently. The older generation wants to talk to a customer service representative. This is happening. This impacts the BPO sector.
Erik Churchill:Okay, but at the heart of all of this, I think what we're talking about is productivity. Advances that are making things faster, easier, more efficient, but I don't think that non-economists have a good understanding of what we talk about when we're talking about productivity improvements. A lot of times, when people talk about improved productivity I hear that my job might be at risk. Walk me through this, Sameer.
Sameer Khatiwada:Basically, in your simplest terms, productivity, basically, is your outputs over inputs. Output could be income, whatever it could be, number of shoes you produced. Then the input could be number of workers that went into producing those number of shoes. You figure out some combination of that. So new machines allow us to produce more goods in services with the same number of workers. That's what it means to raise productivity with new machines. When you talk about productivity, as you introduce machines into a factory floor, you are going to let go of people. Every single innovation that mankind has come up with is to make us more productive, to save us time to do something else. That's the whole point of it. Otherwise we wouldn't be doing it. We shouldn't be surprised that all of a sudden we have produced machines that are getting more and more complicated and they can do complex tasks. Well, that's called progress. That's called human progress.
Erik Churchill:But it sounds like that the most productive industries are the industries where, as a worker, I might need to have the most concern about.
Elisabetta Gentile:Well, that's true. Again, we tend to focus only on one aspect of productivity, which is precisely what Sameer was talking about, if, with better technology, the same number of workers can expand output. We tend to neglect the second part of this, and the second part of this is that, with more output, we sell more. By selling more, we make more money and the people who make more money can then demand more goods and more services. This expansion of production in turn, is what stimulates more demand and it creates more jobs. This is precisely the dynamic that we are observing in Asia. Asia is not like North America or Europe, at a point where you've got saturated consumer markets. How many iPhones do you need? How many cars do you need? So obviously, we have to be careful not to apply to Asia the same logic that we apply to saturated consumer markets.
Erik Churchill:But at the same time, you do admit that there are some workers who will be at risk here in Asia. Who are we talking about? You mentioned earlier, Sameer, these routine workers. Walk me through that.
Sameer Khatiwada:Actually, the proper way of framing that would be workers who do repetitive tasks. A machinist or somebody who works in an electronics factory soldering a circuit board, a relatively repetitive task. Repetitive tasks can be programmed into computers and people who are doing those tasks are in danger of losing their jobs. But of course, even if you have a high share of repetitive tasks in your day-to-day job, it doesn't necessarily mean that we are going to automate those away. Why? Well, because maybe technology might not be there, first. Second, it's too expensive. Think about the example of a hairdresser. You could spend so much money that you could come up with a machine that gives you a perfect haircut, but does it make sense? Well, I don't think it does. You might as well go to a hairdresser and get a nice haircut and you get it the way you want it. So it's important to keep this framework in mind when we're talking about how technology is going to change the labor market.
Elisabetta Gentile:I'm glad that you're mentioning the hairdresser because, again, I really want to insist on this point that I was making before that the machine that does your haircut is not the same thing, especially for us ladies, then going to the salon and the whole social - being pampered, maybe getting your fix of trashy magazines in the process. I am sorry, but there is no technology that can replicate that experience. This is why I'm feeling positive that the discerning consumer who wants something that attaches a certain value to this kind of experience will still be - will still demanding - be demanding that.
Erik Churchill: Not to belabor this, but I think what you - the difference between somebody who's giving haircuts to the military and a woman's stylist, we have different levels of productivity. We have a machine that can give you a buzz cut if you want, but somebody who wants to add value needs to add a lot more services to that because I think one of the things that you alluded to earlier was this - part of the revolution in Asia is getting workers from agriculture into industry or into services. That's an important part of our story.
Elisabetta Gentile: Absolutely. If we want workers to be able to change their role over their career – so now that I'm a machinist, suddenly there is a robot that can do what I do, so I need to shift - well, we need to equip our workers from a very early age with the skills that they will require to transform themselves. This is perhaps the caveat, the fact that technology can provide amazing opportunities, but we have to equip our people, our workers, with the ability, with the skills to seize these opportunities. This is where the - I think where the challenge lies.
Erik Churchill: Elisabetta that’s an important point, but one thing that I'd like to get your final thoughts on are, how do we, as an institution, as a government, as a leader in an Asian country, how do we respond to this?
Elisabetta Gentile: I think there are two aspects to this. The first aspect is really the infrastructure aspect. We need to build schools, safe schools, with the correct equipment, with the correct IT. On this, ADB has been doing a lot. But there is a second aspect on which there is a lot of room for improvement. Creating a different system, a system where the private sector and the policymakers, so the employers and those who create training and education systems, can have an open communication line.
Erik Churchill: So just as the technology is talking to each other, it's these institutions that need to talk to each other?
Elisabetta Gentile: Absolutely. Right now, we have education and training systems that find it very difficult to change, to evolve, to adapt.
Erik Churchill: Sameer, I'll give you the last word.
Sameer Khatiwada: Well, just to add to that, the government's role is quite important in all of this. In our study, we point out that the government's response has to focus on reskilling workers, providing training, providing social protection, because there will be displacement. We talk about, also, regulation being favorable so that businesses can adopt new technologies. So that's your response. Then the use of technology. The government actually uses technology to deliver public services. Take the example of health. This is a great scope for using new technology, also education as well. Use is also very important. Finally, support for technology. That gets back to ADB’s help as well, where you are increasing the broadband access, you're putting in infrastructure. These three things, the response, use, and support are key for government to focus their policies on, these three aspects, going forward.
Erik Churchill: Thank you very much, Elisabetta and Sameer. I think that you have convinced me that this technological change is not something that I need to completely freak out about. But it sounds like we need to be prepared, and I think that over the next couple of episodes we can discuss how we need to think about this a little bit further in terms of the skills that we need, in terms of how government can respond and digging a little bit deeper into what is actually happening in this increasingly globalized world. Thank you. Additional special thanks today to my co-producer Andrew Perrin, to our senior researcher Pima Arizala. Our studio technician is Brian Manuel. Richard Miron is our executive producer. Thank you for listening. If you enjoyed this podcast, please rate, like, or comment on your favorite podcast app. More information on the issues discussed today are available online at ADB.org. And please, join our conversation at #FutureofWork.
Episode 2: The Age of the Machines
Erik Churchill: Welcome to the Technology and Jobs podcast from the Asian Development Bank. I’m Erik Churchill. In this series we’re looking at how the workplace is being transformed by technology and what that means for the workers of today as well as those who are going to be doing the jobs of the future. As many of the wildest ideas about technology become reality, and extend deeper into our lives and workplaces, our anxieties seem to be accelerating together with the technology itself. Asia is at the forefront of adopting these new technologies, in particular in the more developed countries in the region, with the People’s Republic of China leading the way. From 2013 – 2016 the number of robots the People’s Republic of China purchased increased by over 100%, accounting for 30% of global sales. We’re seeing that industries like car manufacturing and electronics are almost entirely dependent on machines to get the job done. In addition, automation is beginning to make inroads into other sectors and countries which have traditionally depended upon intensive labor resources – such as the textile industry in Bangladesh and even so-called white collar jobs like doctors and office workers. Today we’re going to look at how widespread the effects of technology in the workplace really are, and which industries will benefit most from labor saving technology? and where will this have the biggest impact in Asia? Which type of workers will benefit and which miss out? I’m joined by Elisabetta Gentile and Sameer Khatiwada from ADB’s research department to help answer these questions. Elisabetta, how concerned should we be? Are robots going to take our jobs?
Elisabetta Gentile: I would say yes and bring it on. Over history, the data that we have, shows that every time there has been a major technological innovation, it has allowed us to work less, to have a better work/life balance and to also focus on more interesting tasks in our everyday lives. So, I would say robots and automation - machines, in general, have been able to take away perhaps what are the most repetitive - the most also dangerous, I would say - tasks, associated with our jobs, to allow us to focus on the more interactive parts of our job.
Erik Churchill: Sameer, you look doubtful.
Sameer Khatiwada: I don't think a robot is going to take away your job. Sitting in Asia, I would say that I'm not yet worried about robots coming to take our jobs. If you look back in history, technological unemployment, where basically, technology making people unemployed. One of our luminaries in the discipline warned us about this - John Maynard Keynes said, you know what, 70 years down the road, people will be working 15 hours a week, because a lot of the things we do will be done by machines. Look at us now. We're working 40 hours a week - maybe even more. Nothing really has changed. So in that sense, it hasn’t really transformed our lives as we thought maybe it would.
Erik Churchill: Elisabetta.
Elisabetta Gentile: Well, there is one element that I would like [to add] - there may be a little bit of a provocation here. We have been used for many decades to think that the only path to development is through manufacturing. That a country, to make - to successfully move up and become middle income or high income, it has to go from an agrarian agricultural-oriented society to manufacturing, but are we really sure about that? Are we sure that a country like Nepal cannot find a way to develop through services, for example? This is really a provocation that I wanted to put out there, because it is undeniable that the most automation is in manufacturing right now. So I am a bit concerned that we are sending this message to developing economies that the only possible path to development that they have is by making stuff. It might not necessarily be the case.
Sameer Khatiwada: Just to support on that, actually, business process outsourcing is an example as well in the Philippines, and similarly in India, the same thing with outsourcing jobs. I like the fact that Elisabetta raised this point that traditionally when we think of development, you go from agriculture, manufacturing to services, and the model was that. You take people out of agriculture, into manufacturing. Maybe that may not be available to a lot of our countries - fair point. The thing is, to make the transition out of low pay agriculture into services - it goes back to what you were saying earlier, is that we need to prepare the workforce for it. Take the example of outsourcing industry in the Philippines. The people who enter that industry, they speak English very well. They tend to be at least college graduates. The call center it's less so than in the others, but still, they're relatively better educated, they speak English, so they're actually competitive in the global services market, if you want to call it that, but you have to prepare your workforce for that - to take advantage of the service sector jobs.
Erik Churchill: Okay, I think I understand. I want to shift track a little bit, because I think one of the things that you've alluded to - both when you're talking about the BPO industry in the Philippines or in manufacturing is this - the way in which we work together with technology. This isn't all or nothing. It's not that a robot replaces my job one-for-one. It's that I need to know how to work - if I'm working in a call center, I need to work with technology. If I'm working in a factory, I need to work with technology. Do I have that right?
Sameer Khatiwada: Yeah. I think so. I mean Elisabetta can correct me, but the thing is basically the complementarity between labor and technology is very important. It's actually crucial. What happens going forward in terms of employment, in terms of total employed, in terms of wages.
Erik Churchill: Where is this happening, Elisabetta?
Elisabetta Gentile: We are seeing indications of this happening, for example, in the People's Republic of China, where the government has introduced in its education plan, the transformation of 600 universities into what we call polytechnics. This is one example. What is very interesting right now is that a lot of entrepreneurs are developing programs that target individuals without formal education, without formal training. Through a process that we call the gamification of learning, they are discovering their individual skill profiles. Is this person a leader? Is this person a thinker? Is this person a builder? These are things that can potentially revolutionize the labor markets, because people who have been traditionally excluded from certain opportunities, because they didn't have any formal education or training, they can now actually get an access - get a way in, to participate in this vocationally-oriented training.
Erik Churchill: Shifting tracks here, one of the things that you've alluded to is that workers are going to have to work alongside technology in different kinds of ways. Elisabetta, you have some examples of that from your research, right?
Elisabetta Gentile: Absolutely. We have visited a knitting factory in the outskirts of Dhaka, Bangladesh. What we found there was incredibly eye-opening, because we tend to have this idea that if a technology is economically viable, automatically factory owners will fire everybody - it's been a pleasure to meet you all, but now we've got machines, so go on now. The reality in the field is much more complicated. This knitting factory that we visited has three different levels of automation. The first level is pretty much a manual knitting machine, where the ratio is one worker to one machine, and it takes a lot of physical strength to operate this machine. Needless to say, the workers on these floors are completely male. Then you have a second layer of automation - a second level in this factory, where you have semi-automated machines. On this floor, you already see more female workers. It's prevalently actually female worker. We have a ratio of one worker to two or three machines. In the same factory, you have a fully-automated floor. So of course, we were asking the owner, what is the rationale of having not two, but three different levels of automation under the same roof? Well, he told us, one of the most important reasons for this is that I am a risk-averse individual. When I receive orders and I need to deliver on those orders, absolutely nothing can go wrong. So by having the computerized machine, he protects himself from striking workers. By having manually operated knitting machines, he protects himself from power outages or from malfunctioning machines. So I think this is an incredibly good example of the fact that the reality in the field is much more complicated. The availability and viability itself of a specific technology doesn’t automatically translate in mass layoffs of workers.
Erik Churchill: Elisabetta is arguing that technology has made so many advancements that are making work better for us. The quality of our work is better. I think that's probably true for a lot of people, but it seems like there are a lot of people who are still doing pretty tough work.
Sameer Khatiwada: When we talk about technology and how it enhances our productivity, I mean, it's one of those classic questions in our discipline, that sometimes when you see technology everywhere, but you don't see it in actual statistics on productivity. Because there's usually a lag that it shows up in how productive we have become.
Erik Churchill: Okay, I'm going to stop you there, because shouldn't we see this in wages? Shouldn’t we see this in our quality of life? I mean, okay, maybe the government statistics don't show the productivity, but I should be able to feel it in my pay check, right? Isn't that your argument?
Sameer Khatiwada: The thing is if your question is, has our quality of life improved because of technology? That’s a yes. For sure it has improved. If you were to ask, has the - our life at work improved because of technology? I would say our productivity has gone up because of technology, but whether or not we have a better work life, I don’t know.
Elisabetta Gentile: Erik, I would like to really address the very good point that you are making about workers in agriculture, for example, in very poor countries. Again, the mistake that we tend to make when we think about technology is that we tend to think of very sophisticated, cutting edge things, but the reality is that even the most basic technologies can make a world of difference in agriculture. The use of fertilizers. Fertilizers themselves are technology. They embody a lot of research and development. This can make a huge difference. Let's not forget that right now you have a penetration of mobile phones and smart phones, even in the most remote areas, and just by getting a text message telling you what is the going price now for your crop, or that a veterinarian will be passing through the area on this date and this time. These are small improvements that can make a world of difference.
Sameer Khatiwada: Just to add to that, actually, in Asia we also see that besides agriculture in low paid, low skilled work, in informal sector, because the informal sector is quite important for this region. If we look at just Southeast Asia: Indonesia, Philippines - here actually we're talking about 70 per cent of total employment being in the informal sector, which is not registered. They're outside of your formal employment relationships. Even in that sector, actually, technology has played a key role in raising productivity and earnings. Take an example of GO-JEKs from Indonesia. There actually these drivers who are basically - this profession emerged because of the traffic problem in a big city like Jakarta. Now this has evolved into providing services across a range of things that people demand. So basically, what has happened is that the GO-JEK drivers have been able to not just drive people around, but also provide other kinds of services, raising their earnings. This is because of digital technology, because they have smart phones, they have apps, and they somehow have managed to raise their earnings because of this. This is key, because technology has really helped these guys to have a better standard of living.
Erik Churchill: Okay, I want to shift a little bit, because I think one of the stories that you hear - when you follow this in the media, is you talk about occupations that seemed absolutely “unautomatable.” You hear about paralegals. You hear about accountants. Things like that Should we be afraid for these jobs?
Elisabetta Gentile: I think you couldn’t have found a better example, and this tells you, the paralegal profession is one of the reasons why I am still not completely pessimistic about this, because sometimes the machine learning algorithm that goes through all the legal documents can miss things that a human mind will pick up. For example, verdict that a judge might have offered, in a sector and in a context that is completely different from the current law suit that the paralegal is preparing for, might be relevant somehow. There are still some connections that only a human mind can make. It's true - this algorithm can take a lot of the grunt work out of the paralegal profession, and this perhaps can result in somewhat less employment, but this will allow more work to be done, more data to be processed, and so this will expand the firm.
Erik Churchill: Sameer, please.
Sameer Khatiwada: No, I just wanted to counter that a bit. In my conversations with the BPO executives, one thing that came up that I thought was interesting was that - BPOs, in terms of back office operations - they do invoicing. One of the executives told me that when you look at the accuracy of a human - a person doing the invoicing versus a computer doing the invoicing, after about a month of a person being hired, they're about the same - the accuracy level is about the same as completely automated systems. But, since it's such a boring job, that after a month apparently the worker loses focus. So apparently, he tells me, you know what? Actually, as it turns out over the course of a year, it makes sense to switch to a completely automated system, because you're more accurate.
Elisabetta Gentile: You see, Sameer, there is a big difference between the paralegal work and the invoicing work that you're talking about, precisely in its routine nature. Because invoicing is quite the routine cognitive task, but the paralegal work has some nuances in terms of how you research a case history and what kind of cases you're interested in. I'm telling you, I'm not denying that this is going to require fewer people but I'm telling you that the human component still matters.
Erik Churchill: Okay, so, final question, Sameer. Do humans have a future?
Sameer Khatiwada: Yes - a resounding yes, because the thing is, at the end of the day, it goes back to what we were saying at the very beginning, the complementarity between labor and technology is our future. That's where we are heading. Whether or not we are prepared it is a different story, but that's where we are heading. One - when we talk about technology, something that we haven't mentioned yet is that when you walk into a hospital these days, there's a lot of machines. Everywhere there's a lot of machines. You would think that some - that many of those people working there would have been displaced because now the diagnostics are all automated. It's not happening. Somebody is there to man those machines, to actually know how to use those machines and make sense of it. All I want to say is that not all improvements displace labor - not at all. They actually augment the value of labor that we put in. So I - the future for human being is a resounding yes - except, we need to prepare for it, and that's something that's important.
Elisabetta Gentile: Paradoxically, I would like to add that machines are going to give us an opportunity to be more human. How many of you have complained at least once in your life that your studies or your career has taken away your creativity? Has taken away from you something that you liked to do when you were younger and because of your studies, because of your focus, you have completely lost that. I think machines can give us an amazing opportunity to go back to being what makes us unique as human being, to express our creativity in many ways.
Erik Churchill: Well, that's a really optimistic note to end on. My takeaway from this is that a robot is not going to immediately take my job - and maybe if it does, it'll just take the bad parts. Thank you very much for joining us today. My name is Erik Churchill. In the next episode we’re going to be looking at how technology could affect globalization which has been the motor behind Asia’s extraordinary economic growth. But for now thanks to Sameer Khatiwada and Elisabetta Gentile from the Economic Research Department of ADB. Additional special thanks today to my co-producer Andrew Perrin, to our senior researcher Pima Arizala. Our studio technician is Brian Manuel. Richard Miron is our executive producer. Thank you for listening. If you enjoyed this podcast, please rate, like or comment on your favorite podcast app. More information on the issues discussed today are available online at ADB.org. And please, join our conversation at #FutureofWork.
Episode 3: How Automation Affects Globalization
Erik Churchill: Welcome to The Technology and Jobs podcast from the Asian Development Bank. I’m from Erik Churchill. In this series we’re taking a look at how the way we work is being changed by technology and what that means us, for our workplace, and for Asia. Globalization has opened up the world to us as individuals and our region to new markets, it also poses a threat to established industries and ways of doing business. The supply chains that have supported globalization’s rise in Asia could come under strain from new technologies that make might for example make it easier to manufacture products closer to home in industrialized countries. So how could technology affect Asia’s vaunted position in the global supply chain? What kind of a challenge does it pose to specific industries and countries? Here to discuss these and other issues are our resident experts Sameer Khatiwada and Elisabetta Gentile of ADB’s economic research department. I’m also joined today by economic advisor Abdul Abiad, who will bring his global perspectives on what is going on. Welcome to the podcast. Abdul, let's start off. What is this process we call globalization?
Abdul Abiad: Globalization is really about trade among countries and you have goods and services produced in one country and sold elsewhere. The big change over the last two or three decades is that the production processes that support the goods and services that we trade have become fragmented.
Erik Churchill: Give me an example.
Abdul Abiad: Take something we all carry with us all the time, a cellular phone or an iPhone. The beginning of that production process starts with R&D in California where the iPhones are designed. Then materials for the iPhone are sourced from all sorts of places, heavy metals from Congo, other rare minerals from Mongolia. Other parts including memory chips from Thailand or hard drives from Korea, are all brought together and assembled, typically in China, and then these are shipped all over the world. Then the production process doesn't end there, you still have distributions channels and support channels. So if you think about these production chains or supply chains, again, even production is very globalized nowadays.
Erik Churchill: Okay, so it seems like at the bottom of this - I mean when we are talking about Asia and Asia's role in globalization it has been as a source of really cheap labor to do a lot of this work. The R&D, as you said, it starts off in the United States but it's Asia who is assembling this stuff.
Abdul Abiad: Actually another way you can think about it is that it used to be that countries would specialize in goods or services that they were good at. Now you can think of them as specializing in tasks. So that in this production you have R&D, you have assembly, and so it's simply that you've broken it up and you're saying well, who is best at doing the assembly? Well the low cost countries are.
Erik Churchill: I can see Elisabetta wants to jump in here.
Elisabetta Gentile: Absolutely. I would like to point out how crucial this supply chain has been to giving an opportunity to many developing countries in Asia [to get] out of poverty. I want to give you a very salient historical example: the so-called Asian tigers, Republic of Korea, Tapei, China, Hong Kong, China, and Singapore. So for these four countries it was incredibly difficult to achieve what they have achieved, because in order to participate in global trade they had to set up an entire export industry domestically. So this is why we always study them in history books because what they achieved was amazing. The production chain, the supply chain, allows a country to participate as Abdul was saying in global trade just with a task, just with one or more relatively smaller contributions. Countries now in order to participate in global trade don't have to set up an entire export industry anymore. They can contribute at a certain level with what they have to offer, and developing Asia just happened to be very abundant in people. It's the most populous continent on earth and this is what - the majority of what it has contributed to the supply chain is precisely people.
Erik Churchill: But now we're talking about machines that can replace people, right? so what does Asia do when the factory can be close to home, the 3D printer is going to produce the hardware for the iPhone and the Gorilla glass and whatever else goes into it - Sameer?
Sameer Khatiwada: Well you know that's a very good question Erik and it goes back to something we've been looking at here at the ADB which is - well it is true that with new technology the jobs that mostly comprise of repetitive tasks, we like to call it the routine tasks, yes, those are declining with machines. We see this with our analysis of global supply chains that indeed routine employment is going down. But there are other types of jobs that are being created in that supply chain.
Erik Churchill: Like what?
Elisabetta Gentile: Okay, imagine that you implement a technology that is now able, for example, to solder a component on a circuit board where it used to be a worker who used to do that. But now the factory is probably going to need specialized technicians who understand the functioning of that machine so that they can utilize it, they can maintain it, and they can run diagnostics in case of malfunction. So this shows you how the new jobs that are being created require a different skill set with respect to what Sameer was talking about, these routine jobs that are relatively easier for machines to replicate.
Erik Churchill: Okay, but I thought the whole model was based on sucking up unskilled labor from rural areas, whether it's in China or rural Thailand or rural Bangladesh. Abdul, it sounds like, from what Elisabetta is describing, I don't see an uneducated worker from the countryside being able to jump into a factory and do those tasks.
Abdul Abiad: It goes back to what we term economic feasibility. So yes, automation is on the rise; there are new technologies coming up. If you think about how easy it is for machines to replace - or how cost-effective it is for machines to replace these unskilled workers, we're actually still far from that. Even technical feasibility is still an issue; sewing garments is a repetitive process but it's not something machines can do that easily.
Erik Churchill: Okay, but let me push back on that, because we know that China was once the leader in the world garment industry and it no longer is; those jobs are moving to Cambodia, those jobs are moving to Bangladesh.
Abdul Abiad: So that's a natural process, and in fact, again the reason it's moved away from China…
Erik Churchill: I mean you say natural process - I see unemployment.
Abdul Abiad: No. So the way - how does China address it? China doesn't want to be stuck in low-cost labor all the time, and so what you have seen is that they've benefited from that and they now need to move into higher value-added products that pay higher wages. So you don't want to get stuck in just being an area for low-cost manufacturers. So China is slowly moving away from that to the benefit of countries that do need - where these jobs are - you repeatedly used the term low cost labor but remember from the perspective of a farmer in Bangladesh, these factory jobs give them twice or thrice the income they used to earn.
Erik Churchill: I can see Elisabetta wants to jump in.
Elisabetta Gentile: Absolutely. Abdul said it beautifully; these low-cost routine jobs for these developing economies are considered a door into global trade, but nobody, as again Abdul was saying is interested in doing that indefinitely. So I would like to give you a very powerful visual metaphor for this: think of the pattern of the flying geese, right. You can think of China as the goose who is ahead, and as China matures as an economy, and becomes more sophisticated, it's the geese that are flying behind goose China that begin to benefit from that. So what you're seeing - perhaps the way we should frame this question a bit better is, what about all those geese way, way in the back; so because of technology, does that mean that those guys who are in the back are never going to benefit from this? Well I am sure Sameer and Abdul here have a lot to contribute but it has been shown already that this is a very unrealistic point of view to take. It doesn't make sense for two reasons; the first reason that comes to mind is that it used to be that firms in developed advanced parts of the world, where we would call it off-shoring production, and the idea was that production was happening on the other side of the world and then the product was shipped back to the country of origin. You can forget about that - that doesn't exist anymore. So when people are talking about bring jobs back; back where? If this phenomenon is about going closer to your consumer, going closer to where your market is going to be - the market is no longer necessarily just in Germany, it's no longer necessarily just in the United States of America - there are - these are actually very saturated markets.
Erik Churchill: But when I look at the - we've got the statistics on who's buying industrial robots, and it's Germany, it's China. That seems like a process where they're trying to keep - maybe it's the jobs are not there, but at least the industry is; they want to keep those industries from fleeing their countries, right?
Sameer Khatiwada: If I may jump in here, Erik the thing is to hear those questions, if I may this, it kind of reminds me of this thing that the economists call lump of labor fallacy, right, so that assumes that there is finite number of jobs. So if people are in their jobs for longer, young people don't - can't really enter this whole thing, right - and its proven wrong many times over. And we show this in our new study - we basically show that new jobs are created in new occupations, in new industries, because of technology - it happens; it's an organic process that sort of generates new employment opportunities. But the thing is, as it goes back to what we were saying earlier is that yes, there will be jobs but we need people to be skilled to take those new jobs, that's very important. So when you think of globalization - in the context of globalization and how technology is changing the landscape - look, the thing about looking for a low-cost destination, what-have-you labor, materials - that will also be the case. Businesses are driven by their bottom line - they will always do that. And guess what, the robots - yes China is buying a lot of robots and the garments sector in Cambodia is benefiting from it. Now all of a sudden the garment factories in Cambodia, they're owned by Chinese; you know why - because the wages of a laborer in Cambodia is much lower, right. So somebody is benefiting from robots being bought by China.
Erik Churchill: Okay.
Sameer Khatiwada: So this process takes place… 41:40 3:40
Erik Churchill: I don't know if I'm all the way there yet, but maybe I'm getting closer. I want to shift gears a little bit because I think - one the things we hear all the time, here in Manilla, we talk about the Asian consumer class. Is this a reality? I mean can Asian consumers make-up for the - if these jobs are re-shored, for example, to the United States or Australia - I mean is this a reality?
Abdul Abiad: Well so, quick answer is yes. Emerging markets, and particular developing Asia, account for the bulk of GDP or income growth nowadays, and so in fact many factories moved here, not just for low-cost labor, but because they wanted to be close to these markets, and it's still going to be the case over the next decade/two decades that much of the growth you will see is in these countries…
Erik Churchill: Sameer, you wanted to jump in.
Sameer Khatiwada: Just to add to what Abdul was saying, in terms of when you started off by talking about the consumer class in Asia, and Abdul rightly pointed out that the global growth comes - a large part of it comes from this part of the world. You know when you look at the revenue stream of some of the luxury brands, LVMH is a good example, right; if you look at their revenue stream, do you know where it's coming from? It's coming from places like China. So those are the people that are buying your Louis Vuitton bags; so they're buying in droves, they're buying in large numbers, right, that's what's happening. So all that is to say that sort of gives an image of how the world is changing, and it's changing because of rising incomes in Asia so that has supported this whole process. Yes, technology is displacing jobs but as it turns out, as people get richer they demand more goods and services…
Erik Churchill: Okay, so this is like the ATM - it creates more bank tellers, right?
Sameer Khatiwada: Right, right, that's a classic example where when ATMs were introduced in the US everyone thought bank tellers would lose their jobs. As it turns out banks were able to open more branches because now the cost of running a bank branch was much lower, hence they needed more tellers as well in those new branches, right? So actually the number of jobs - bank teller jobs didn't go down. Similarly, or you could think of it in a similar way in the context of Asia, in developing Asia; as it gets richer, there will be jobs created even in industries and occupations that we think that might disappear because of new technology. No, they will not disappear because of new technology.
Erik Churchill: Okay, so I'm getting closer to being convinced but I'm still worried about the losers here, because there's some people who are - I can tell in metro Manilla there are a lot of people who are not going out and buying Louis Vuitton handbags, right? What happens to those who are left behind by this process?
Elisabetta Gentile: There is an aspect I think of this that hasn't been considered. Because Asia is such a diverse region let's look at the demographics for example; you have Asian economies that are already suffering from population aging, and you have Asian economies that have this youth bulge, these young generations whose skill profiles don't necessarily find any outlet in their home country. This is creating a situation in which, in some countries technology is even needed to fill the gap in the labor market, where in other countries there is this excess labor that they don't know what to do with. So in this context, a lot of the “losers” as you define them could find a great outlet if the region just leveraged more labor mobility. The region right now is some of the most-closed in terms of favoring flows of labor across the border. Interestingly enough, if you look at statistics, you see a country like the Philippines is one of the largest exporters of human capital, of workers, all over the world, but Filipinos find it the most difficult to migrate within Asia. So why am I saying this? I'm saying this because a lot of these imbalances of these surpluses of workers that are, for example, on a low skill, on a lower skill range, could find outlets of employment, of building themselves a better life in other countries that desperately need them. But we are finding a lot of economies right now where they would prefer to fill their homes with robots rather than bringing in some fresh blood from other countries.
Abdul Abiad: So let me get back to - your question was - I got it - the costs and benefits and how those are distributed; I fully agree with that. We, as economists, have made the mistake both on globalization and technology in the past, of just focusing on yes this is a net plus, let's go ahead with it. So here again, as we talk about technology and automation, we do have to recognize there will be losers, some people are at risk of losing their jobs, and let's not make the same mistake of bypassing them or just papering over those issues. So it is critical that people, who are at risk of losing their jobs, are reskilled, retrained so that they can do those other jobs, those new jobs that Sameer was talking about.
Erik Churchill: Sameer?
Sameer Khatiwada: I just wanted to add to that; you know when you look - we talk about losers and winners from globalization, right, and now you throw in new technology and the Fourth Industrial Revolution in the mix, you know what I am most fearful for and worried about, are the low income countries, like my own, like Nepal. The thing is, because of new technology, what is going to happen is that it's going to be even more difficult for a country like that to produce goods and services that they can export to join the global supply chain, the network of trades - it's more difficult. The process of industrialization has gotten more expensive because of technology and because of automation, so those low income countries like Nepal and Myanmar, Cambodia, here is where - Afghanistan, here we ought to be worried because these countries might be left behind.
Erik Churchill: So what should a policy maker do? If you were a policy maker in Nepal, how do you address this?
Sameer Khatiwada: Great question. Look this is something that I have been thinking about lately, because now we have a new government, they want to do - they want to put in place economic policies but what do we do, right? So now industrialization no longer seems like the path that's available for a country like Nepal; so should we go into services, should we train our workers that they are ready to take advantage of the new types of jobs that are emerging in services? Should we get into that? Should we learn lessons from BPOs in the Philippines, and IT in India? This is something that they ought to look at this very closely because the traditional model going from agriculture to manufacturing to services might no longer be available for a country like Nepal.
Abdul Abiad: So absolutely right. What it requires then, given that sort of that old model of development where you go from agriculture to manufacturing to services seems to be disappearing; what you need to ensure, and we've also learned the lesson that governments can't choose - can't pick winners, right. We've seen many disasters with that. It really is all about making your economy and your work force more adaptable. We don't know what the future brings; you can shape your work force, skill your work force so that it can adapt, and there one of the things that the report points to is that you have - so it's ensuring not just sort of basic literacy and basic numeracy, but ensuring these foundational skills of being able to learn and re-learn throughout your life, and that I think would be key to making sure that our countries can adapt.
Erik Churchill: Elisabetta, I'll give you the last word.
Elisabetta Gentile: Thank you. I want to bring in a positive note, as the eternal optimist in the group, and I want to say that some of these technologies, especially digital technologies are really good news for women in the work force. I mean we are beginning to see statistics from all over the world showing that the introduction of information and communication technology has been a boon for women's employment, that jobs that require social interaction and communication are a boon for women, and we now have to bring this to the next level because women are under-represented in many of the fields that are very technology-intensive, so this work has to start from a very early age to make sure that women are not discouraged from pursuing careers in technical and scientific fields, because this is how they will maximize the benefit from leveraging technology in the workplace.
Erik Churchill: That's a great note to end this on. So technology can’t stop globalization – although it could change how it works, and how it changes the work that we do. In the next episode of the ADB’s Technology and Jobs Podcast we’re going to be following on from what we’ve been discussing by examining the skills that are going to be needed to manage and prosper in the new world of work. But for now, thanks to Sameer Khatiwada and Elisabetta Gentile from the Economic Research Department of the ADB, along with our special guest Abdul Abiad. Additional special thanks today to my co-producer Andrew Perrin, to our senior researcher Pima Arizala. Our studio technician is Brian Manuel. Richard Miron is our executive producer. Thank you for listening. If you enjoyed this podcast, please rate, like or comment on your favorite podcast app. More information on the issues discussed today are available online at ADB.org. And please, join our conversation at #FutureofWork.
Episode 4: How to Stay Employed in an Automated Future
Erik Churchill Welcome to episode four of the Technology and Jobs podcast from the Asian Development Bank. I’m Erik Churchill. So far in this series we have examined various ways that Asia’s workplace and workforce are being changed by new technology. We asked how we should see the rise of the machines – as a threat or an opportunity. We’ve also looked at the way technology could alter the globalized economy and Asia’s place within it. In this episode we look at what lies ahead for the workers of today and for future generations who will join the workforce. What can be done to prepare future workers for the changes that are happening? How much can governments and others do to manage the disruption that will take place? To understand this better we are taking a close look at the business process outsourcing (BPO) industry in Asia. BPO’s manage the back-room functions for many businesses around the globe. They’ve become an important part of the economy of the Philippines with local workers providing back up for companies in North America, Europe, Australia, and beyond. To understand more about BPO’s and their concerns we went to see one particular company here in Manila. Sequence - Convergys So there are the thoughts from the BPO sector, which is confronting the very real effects of technological innovation and changes to its business model. To discuss this further and examine what can be done I’m joined by Elisabetta Gentile and Sameer Khatiwada from ADB’s economic research department. And I’m also welcoming for the first time to the podcast Tania Rajadel who is an education specialist in ADB’s sustainable development and climate change department. Welcome. Sameer, an 18 year Filipino comes up to you, asks for some career advice, should I join the BPO industry in the Philippines, what do you tell him?
Sameer Khatiwada: Yes, I would say given the track record of formal job creation in the Philippines, which is not that great, I would totally advise that 18 year old to go into the industry.
Erik Churchill: They have a future. We've heard throughout this podcast artificial intelligence is taking jobs; do you think in 10 years he has a job?
Sameer Khatiwada: Well, let me finish my thought.
Erik Churchill: All right, go ahead.
Sameer Khatiwada: So basically I would start by entering the industry because it pays better than what you would earn elsewhere. It pays about $8000, $7000, $8000 per year, which is three or four times higher than the average wages elsewhere in the Philippines, right, so it's still a good job. But you can't last too long in the call center. There are two reasons why, one is the nature of the work, but the second, technology is changing the landscape of call center jobs. So you need to come up with some kind of specialized skills that you bring into that job, whether it is in healthcare or whether it is in computer programming, you've got to bring something a bit more different because that's where the pay rises come from. The BPO industry in the Philippines is moving towards the higher value jobs in this type of industry, where basically if you are a software developer then you are more likely to earn better wages, and you are not under threat of automation. You could actually last longer in that industry. So, yes, enter but keep in mind you have to skill yourself, you have to equip yourself for the type of jobs that are being created in the industry.
Erik Churchill: Okay, well let me bring Tania into this. I mean so Sameer is telling me I've got to maintain my skills but I'm already in the workforce, what am I going to do?
Tania Rajadel: Well from what I've seen in the Philippines it was really up to the individual to do so. So there is an access issue in terms of finding sufficient financing to subsidize your own training. This can be really challenging. Some banks here in the Philippines are starting to look into providing student loans to young people interested in pursuing vocational training. But it's still pretty marginal ; it hasn't yet completely taken off. So a lot of people rely on their families and savings. So of course if you worked in the BPO industry you might have saved enough money to go onto further training.
Erik Churchill: Okay, Sameer.
Sameer Khatiwada: I just wanted to add to Tania's point there. Basically in the call centers a lot of the workers are actually college students, so they are students at the university but they're doing this almost on the side. So it goes back to that saving some money so they could further their education so they could be even more marketable elsewhere in higher-paid jobs. So that is actually taking place right now. Because a lot of those young people they don't stay too long in call centers, they really don't, because the job is very taxing, and second it doesn't have a long term future. It is true that they have to invest in a longer term plan for their careers.
Erik Churchill: Yes, and I think for all of us living here in Manilla you can see how taxing this is. You see a lot of people working over nights to answer phone calls and do work for businesses that are in a completely different time zone. Elisabetta, I'm going to bring you in here because you have talked to some of the business owners in this industry and have some perspective on that.
Elisabetta Gentile: Yes, obviously it comes down to your priority list. As a BPO company you have to decide if turnover is good or bad for you or absolutely indifferent. If the turnover is bad for you then you have to find opportunities for career development to retain these individuals within the company.
Erik Churchill: So you're talking about the decision to skill up your workforce.
Elisabetta Gentile: Exactly. So if the employee turnover at the call center is not something that procures losses to the business then you might not have any interest in that. But if instead you think the turnover is actually a negative the only way to tackle this problem is by offering career development opportunities within the company. This also has repercussions on the type of technology that the BPO firm will actually be interested in adopting, because if we think that the human component and high turnover is really not a problem then we might be even interested in replacing the workers altogether with some kind of automated system. I mean I'm sure all of us have already experiences with the automated menus that guide us to…
Erik Churchill: Yeah, they drive me crazy.
Elisabetta Gentile: Well you're not the only one there. But alternatively we can think of technologies that actually empower the human component by working alongside the human component and increasing productivity, but also increasing the contribution, the unique contribution, that the human worker has to give in this context.
Erik Churchill: Okay, so that's an interesting point and it allows us to shift gears because I want to bring this out a little bit, away from BPOs. I want to talk about how we prepare for what's coming more generally. In the BPO sector you've got the private sector is taking some initiative it sounds like, but governments have a role to play as well. Tania, I want to bring you in on this because I know that you've been working in China, and I know that ageing is a huge issue there and they're doing some interesting things there. Tell me about this issue of polytechnics and training in the medical field for geriatric services.
Tania Rajadel: Right, so as we all know, China is facing this trend, this issue of ageing, their population is ageing very rapidly. So they've realized very recently that actually the need for elderly care services was expanding very fast, and they realized that they had a huge human resource gap. Of course, they have a strong healthcare - well relatively strong healthcare sector, with people who are trained medically, but they realized that they didn't have the right types of skills needed to provide integrated elderly care services to that population. This means both high-level skills, so medical professionals specialized in geriatrics, so neurologists for Alzheimer's disease, for example, but also mid-level and low-level people. That is where the skills gaps were actually very strong. Right now, China relies a lot on a traditional model…
Erik Churchill: Okay, I'm sorry, let me stop you there. The skills gap, I mean what does that mean? Does that mean that they have the nurses but they don't know how to deal with the old people, right?
Tania Rajadel: So there's both, they do have nurses but indeed nurses and general practitioners are not trained, properly trained, to deal with the specific health needs of an elderly population.
Erik Churchill: Okay.
Tania Rajadel: But also they are lacking care givers, trained care givers. So these are people who are not as skilled as nurses, who don't have a medical certificate but who are absolutely an essential - I mean the backbone of elderly care services. Right now people rely on families a lot but the society is changing. Young people are migrating to cities to work and are leaving their parents behind in rural areas so there's no one to really take care of the elders. So we have several projects right now at ADB to help address these skills gaps and one of them is to really - well all of them are actually trying to address it across the spectrum. So to train care givers. So this is at the low end of the skills needs so that they can provide the type of care that is needed and help people age in place, stay at home, provide home and community based care at the local level. But also - and these are people who need short-term training in vocational training centers. It can be a 12 week training course, it doesn't have to be very long.
Erik Churchill: Are these young people or are they…
Tania Rajadel: So a lot of these people are actually middle-aged workers who are reskilling, retraining to work in the elderly care industry as some of their factories are closing. So we have an interesting project in the Hebei Province in which - so in several counties we are setting up some training courses for care givers. A lot of them are actually people who have been laid off by local factories, the textile industry that's just closed, a brick making company that has just closed. These are people who are interested in retraining to work in the elderly care sector as care givers. But what we also want to do is to help improve career prospects for people in the elderly care sector. It's not a very high-paying job to be a care giver, career prospects might be limited, but what we're also trying to do is develop training courses so these people can also ultimately start training to become nurses through local vocational training centers.
Erik Churchill: Okay, so Elisabetta let me kick this over to you, because we've heard a lot about China that sounds amazing but we know that China is a lot different than a lot of our other countries. I mean is this kind of - is what China is doing in this space, is that replicable across - we've heard so much about the range of sectors that are at risk and that will require really drastic changes. Are governments in this region going to be able to make this change the way that China has seems to be already anticipating this change in the healthcare sector?
Elisabetta Gentile: Thank you for this question because it's a very nice way to connect with what Sameer and Tania were discussing. I think Sameer has mentioned informality, and informality is still a huge problem in many of our member states. They are now on top of that dealing with this changing labor market and with all the implications that we have discussed. When you have someone who has acquired skills in an informal context these people are pretty much excluded often from all these opportunities. No matter how many shiny new programs you develop, these people don't have a certificate to back up the fact that I have been doing this job for 25 years and says who? You really have no track record. So in this context, first and foremost, recognition of prior learning and making sure that these people have pathways into the formal training system is very important.
Erik Churchill: Tania, you want to jump in.
Tania Rajadel: Yes, actually listening to Elisabetta right now I was thinking about what Bangladesh is doing, and the government has really worked very closely with industry associations in Bangladesh in quite a few sectors to help actually move up the value chain. So we know that the textile industry in Bangladesh needs to really try to move up - upskill its laborforce but it's also true in the electronics industry and construction, et cetera. So they've been working very closely with industry associations that already existed, but that needed strengthening to help them rethink - well help them strengthen their capacity to assess skills needs and then to develop their own training programs, and create their own training centers, develop their own training programs, reskill their workforce, and also as Elisabetta was mentioning, ensure that people have a certificate at the end of their training course. So they've been working very closely with them to develop short term training courses that can be just like three to six months training courses with the industry associations, and with companies involved in the sector, so on the job training. But also - and this I think is really interesting, starting to look to the mid-level management needs. Because these are the - and this is actually a type of occupation that tends to be overlooked. These are supervisors and middle management are the ones who are actually working on the factory floor with the workers.
They're the ones who know what type of skills are missing and how to retrain and what the needs are, and also importantly they're the ones who are helping people, who are training people on the job. So I think that there are some interesting things going on.
Erik Churchill: I can see Sameer here, he wants to jump in.
Sameer Khatiwada: On this whole conversation on the skills gap, one thing that we ought to keep in mind I think is that in a way there will always be a skills gap. The reason why that is the case is because the demand for skills is always a bit ahead than the supply for skills. Because the supply for skills usually comes from the university education or secondary education so there's always that gap. So that goes back to actually what comes out in our study, that we just came out with, is that the importance of foundational education is key. So that allows workers to learn, to relearn, to have the ability to work with new technology. That goes back to having a good foundation. The skills gap is sort of like a chicken and egg problem, it's always going to be there, we're always catching up to it. It's a bit like regulation, right, regulation is always behind what is happening in the free market. So this problem will always be with us anyway because the skills survey when we do that it's always asking employers and employers are going to say, you know what, I don't find the workers. So they're going to come up with something along those lines.
Tania Rajadel: Yes, actually I was just thinking because we conduct a lot of skills assessment surveys before designing and then implementing projects. Sometimes we have focus group discussions with employers and something that often comes out actually is, yes, we can find some of the technical skills, but the problem is the minute we want to retrain our workers we realize that they're lacking foundational skills on which we can then build to set up these retraining programs. So employers themselves in some sectors have actually identified this as a constraint but they can't do much about that. This is really up to the primary and secondary education to provide these foundational skills. We can't ask employers to go back and provide literacy programs or even digital literacy programs to their employees, that's very difficult.
Erik Churchill: Okay, Elisabetta.
Elisabetta Gentile: Connecting very nicely with what Tania was talking about, I had a conversation with policy makers in Jakarta and they were telling me the same thing. They were saying that this is much more of a widespread problem. Because it often concerns individuals who on paper have shiny educational credentials, and then in a team environment where they're supposed to take inputs and provide outputs so they collapse like a castle of playing cards. So this is avery widespread issue in the region.
Erik Churchill: Okay, so I take your points that we need very specific job skills for changing new occupations and we've got to have foundational skills on top of that. But if you listen to what's happening in the west with the gutting of the manufacturing sector, for example, these are not necessarily workers that don't have foundational skills. They should have the capacity to relearn and do different things but there are no jobs left. I mean what happens in Asia if the garment industry doesn't exist in 15 years in Bangladesh? I mean we're not talking about minor changes to someone's education, Elisabetta.
Elisabetta Gentile: Well Erik, allow me to push back a little bit on your assessment that there are no jobs left. I don't think that the problem is that there are no jobs left. The problem is what Tania was saying before, that the skills of the new jobs don't match the skill profile of the workers who are looking for jobs. Here again, what Tania was discussing before comes in very nicely because we have to provide avenues for these workers by reskilling them and we have to reskill them fast. This is another major problem. You cannot go to a worker who has a family and tell them, yes, sure you can enroll in here and two years and you will be good and ready. Two years is too long, even for countries with very generous welfare systems, two years is too long. This is where we really have to flip the whole concept of skilling and reskilling and thinking how do we give them what they need and how do we do this fast? We are talking three months, we are talking four months, and how do we even build incentives in the system so that this actually happens. The trainees themselves have an incentive to complete faster, for example, with rebates on their course fees or some kind of other positive enforcement of this kind, this is fundamental.
Erik Churchill: Okay, Sameer.
Sameer Khatiwada: Just to add to that, what Elisabetta was saying, there are still a lot of jobs. The whole premise of there are no jobs, that's fundamentally wrong. The reason why I say that is because one of the analysis that we did for the Asian Development Outlook this year is that we looked at new occupations, and we found that actually, yes, there are new jobs being created, they're being created. But what is happening - Erik I give you that - is that they are mostly being created in non-routine cognitive category. What does that mean? What that means, they're not your repetitive - they don't involve too many repetitive tasks and they require a bit of brain power and language skills and social interactive skills, these kinds of skills. So that's where the new jobs are being created. But then when you look at other areas, even in routine jobs they are also being created in Asia. Because Asia still we are starting from a low base, we're still getting richer, so in large parts of developing Asia even those jobs are growing. But it is true that by and large most of the new jobs are in your non-routine, cognitive category. Now the onus on the government and the policy makers is how to prepare your workers for those new occupations. That's where it goes back to and it goes back to the conversation on foundational skills but maybe that is the key in leveraging technology going forward.
Erik Churchill: Before we leave this I think that it's important - several of us in this room are parents to young children. Sameer, you're from Nepal, you've got a child on the way, congratulations.
Sameer Khatiwada: Thank you.
Erik Churchill: What path should they be taking in order for them to have lifelong fulfilling work in Asia?
Sameer Khatiwada: Look that's a very difficult question and I don't pretend to know the answer to that. We just - as you know, as a parent you just try and it's trial and error right. But we don't look at it - I was talking to my wife who part of her childhood she was in the Soviet Union - and then her family moved to Switzerland. So when we talk about our own education background, I grew up in Kathmandu and I went to school in Nepal. When you look at what we were taught and the training systems we went through a large part of it was also - this rote learning was part of it. I hated that as a kid that I had to memorize things. So now you no longer have to memorize. But then we also got this good education in science and math and as it turns out when we went…
Erik Churchill: Foundational skills.
Sameer Khatiwada: Foundational skills. So when I went to the US for college and grad school I realized that actually my foundation in those areas were pretty solid, even though I didn't think that when I was in Nepal. So those things are very important. So to my kids, we can't focus on things that a machine can do better. So we've got to look at skills that are different and machines won't ever be able to replicate. That's what it goes back to, what Tania was saying earlier, is that skill that require outside of the box thinking. Take the example of the internet, right, internet has so much resource. For a researcher these days when you want to find something it's easy to go on the internet. But it is a special skill to make sense of all that information that's out there and you synthesize in a nice succinct manner, that's a real skill these days.
Erik Churchill: Well I can tell you that my three year old, the way that she convinces me to give her dessert every night it seems like something that a machine can never replicate. It is using logic that goes beyond me.
Sameer Khatiwada: That's exactly right, and I think kids are smart, we know this. So the thing is I think the schools for the longest time were built to take - forgive me for saying this, but they took creativity away from the kids by this system where we were all meant to be a certain way. I think we are moving away from that slowly because the world is changing and I think we - I would foster that with my kids hopefully going forward.
Erik Churchill: Okay, Tania, we'll give you the last word.
Tania Rajadel: Well of course there's individual responsibility, that people are responsible for their own pathways. But education systems also and employers need to rethink traditional models. It means that some universitiesright now in the US are thinking about creating packages for people where you'd go in and you would have a package of a certain number of months of credits of education that you could then use throughout your lifetime. I think that's an interesting approach and we need to let training institutions and universities come up with new models that might fit our needs a bit better. But it also means that employers need to be open to different untraditional trajectories, and when they're trying to recruit people to be open to these pathways that might not be the typical pathway that they're used to. So everyone has a role to play in this and it's not just up to individuals.
Erik Churchill: That's a great way to end it. I mean I think that we have covered just how extensive this issue is, whether it's governments, whether it's the education sector, as individuals, the private sector. In order to address the challenge of technology in jobs all of these actors will have to be involved. This is the final episode in the Technology and Jobs Podcast from the Asian Development Bank. I hope it has helped stimulate thought on an issue which is going to be preoccupying governments, businesses, and individuals throughout our region. My thanks as always to Sameer Khatiwada and Elisabetta Gentile from the Economic Research Department, along with our special guest in today’s edition Tania Tania Rajadel. Additional special thanks today to my co-producer Andrew Perrin, to our senior researcher Pima Arizala. Our studio technician is Brian Manuel. Richard Miron is our executive producer. Thank you for listening. If you enjoyed this podcast, please rate, like or comment on your favorite podcast app. More information on the issues discussed today are available online at ADB.org. And please, join our conversation at #FutureofWork.
Elisabetta Gentile is an economist in ADB’s Economic Research Department where she specializes in applied microeconomic research, with a focus on innovation and human capital formation. She has a Ph.D. in Economics from the University of Houston.
Sameer Khatiwada is an economist in ADB’s Economic Research Department, where he covers a wide range of economic research topics, including technology and jobs. He holds a Ph.D. in Economics from the Graduate Institute of International and Development Studies and an M.A. in public policy from Harvard University.
Abdul Abiad is economic advisor in ADB’s Economic Research Department, where his research focuses on macroeconomic issues and infrastructure. He has a Ph.D. in Economics from the University of Pennsylvania.
Tania Rajadel works for ADB's Education Sector Group where she provides strategic knowledge and support to education operations. She holds a master’s degree in management from the Ecole des Hautes Etudes Commerciales (HEC) and a master’s degree in development economics from the Pantheon – Sorbonne University.
The Technology and Jobs podcast was produced by Richard Miron, Andrew Perrin, and Erik Churchill. Pima Arizala provided research assistance.