Opening remarks by Ahmed M. Saeed, ADB Vice-President, Operations 2, at the ADB-Bangsamoro Autonomous Region of Muslim Mindanao (BARMM) Roundtable Discussion, 7 February 2020
Good morning and a very warm welcome to
- Secretary of the Technical and Skills Development Authority of the Philippines (TESDA) Isidro Samson Lapeña;
- Deputy Director General Rose Urdaneta from TESDA;
- Other colleagues from TESDA, Department of Trade and Industry, Department of Education, National Economic and Development Authority (NEDA) and other departments and agencies of the Philippine government, members of academia;
- My ADB colleagues;
- Ladies and gentlemen.
We are pleased to have you join us at the Asian Development Bank for an important workshop on TVET’s in the Age of the Fourth Industrial Revolution and the Future of Skills Development in the Philippines.” We look forward to an engaging dialogue over the course of the day.
Let me begin by sharing some of the background and context for this this study. In 2018, TESDA requested that ADB help the Government assess the National System of TVET in the Philippines. Under the guidance of TESDA, we were asked to both help assess the accomplishments the national TVET system , and also to consider a host of emerging challenges including those related to labor market dynamics and economic developments, both within the country and across the region.
This is both an important and very timely exercise on the part of the Government. New and emerging technologies are rapidly changing the nature of work and demand for skills – a process being referred to increasingly as the fourth industrial revolution, or 4IR. TESDA’s request to the ADB highlighted the need to not only examine the organizational structure of TESDA and how it fits in the broader education ecosystem of the Philippines, including recently introduced reforms, but also how we should re-think publicly provided training in the age of 4IR and changing labor demand.
One of the important observations we would like to share at the outset, however, is that we need not be overly pessimistic in the face of growing concerns tbout jobs loss due to rapidly improving robotics, computing and Artificial Intelligence (AI) technologies. Our research has highlighted that new technologies are to be welcomed, as technological change is the ultimate driver of productivity gains, leading to enhanced economic growth and better standards of living. All technological change in the workplace leads to both job losses as well as the creation of new kinds of jobs, as the economy transitions from one context to a different one. The 2018 edition of ADB’s flagship publication, Asian Development, took a very close look at the relationship between technology and jobs, concluding that such changes auger in a change in the nature of jobs but do not necessarily lead to net job losses. History provides us good reason to believe that the effects of automation will continue to be positive in the future, as they have been already in the past.
This does not mean, however, that we can afford to be complacent or that those who will suffer the direct impact of the shift in the nature of economic activity do not support transitioning to new types of work. Of course there will be job losses and some workers (e.g. those who perform mostly routine tasks) will be affected. Training and education policy plays an absolutely critical role in helping those displaced by technology find new work that is both rewarding and meaningful. The rapid nature of change in the workplace means that all countries need a world class skills development system to help their people adjust to the needs of the modern labor market.
The IT-BPO industry provides an illustration of these issues. 62.3 percent of total employment within the BPO sector is in call centers, and these are facing a high risk of job losses from automation due to improvements in what is referred to as robotic process automation (RPA1). The BPO sector is a major source of national income for the Philippines - accounting for 20% of exports and over 7% of GDP. So the threat of automation in this sector raises worries regarding future of job creation in this sector, and also has macroeconomic implications for the Philippines more broadly. Industry estimates indicate that share of low-skilled workers in BPO will decline from 47 percent in 2016 to 27 percent in 2022.
This will of course have implications for education and skilling initiatives, and this is something that appropriately commands the attention of the Government and the ADB.
The IT-BPO sector is however not alone in facing the risks of automation. The manufacturing sector, which traditionally absorbs a large share of TVET graduates, will also confront this challenge. The types of training workers receive in TVET institutions in the Philippines must, as a consequence, adapt to the changing labor demands of industry.
The Study we are discussing today is one element of the ADB’s efforts to support the Philippines in this important transition process. The Study will examine several important areas:
- First, we will look at the impact of 4IR on the future of work and implications for training and education.
- Second, we will assess the impact of TVET on employment outcomes, including status in employment and wages.
- Third, the study will review TVET in the broader context of the Philippines’ education system.
- Finally, we will take stock of ADB’s own experience with supporting TVET in different countries and presents lessons on ‘what works’ in TVET.
I am pleased to say that this has been a very collaborative exercise. The ADB team has worked closely together with colleagues from TESDA during the data collection, stakeholder consultation and research phases. We are now in the process of finalizing the study, and I would encourage all parties to play an active role in shaping the study’s recommendations and to think carefully about how they can be translated into action.
It is the ADB’s hope that this research will contribute to the policy targets of the Philippine Development Plan, as well as to national education policies, industry roadmaps and labor and employment policies.
We look forward to ADB’s continued engagement and partnership with the Government on the importance of training and skills development in the Philippines.
With these remarks, I declare this workshop open. I wish you all fruitful discussions and I look forward to hearing the results of today’s deliberations.
Thank you.
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1Robotic process automation (RPA) is the application of technology that allows a firm to configure computer software or a “robot” to capture and interpret existing applications for processing a transaction, manipulating data, triggering responses and communicating with other digital systems.