ADB seminar considers challenge of technological change, globalization, and jobs

As Asia and the Pacific seeks inclusive and sustainable economic growth, countries are adapting to the possibility that new technologies in fields such as robotics and artificial intelligence may lead to challenges for some industries and groups of workers, according to participants at a high-level Asian Development Bank (ADB) seminar.

“Advances in new technologies will raise incomes and increase demand from Asia’s rising consumer class,” ADB President Takehiko Nakao said at the Governors’ Seminar during ADB’s 51st Annual Meeting in Manila

“Countries that maintain flexible policies, support improvements to education, and put in place a stronger social safety net will be well positioned to take advantage of change that new technologies will bring to the region,” Nakao noted in a statement on Friday.

The seminar “Technological Change, Globalization, and Jobs in Asia” had as panelists Philippine Finance Secretary Carlos Dominguez III, Indonesia Finance Minister Sri Mulyani Indrawati, Japan Deputy Prime Minister Taro Aso, and Fiji Attorney-General and Minister for Economy, Public Enterprises, Civil Service, and Communications Aiyaz Sayed-Khaiyum.

According to the theme chapter of ADB’s Asian Development Outlook 2018, despite concerns that new technologies and automation could lead to widespread job losses, there are four reasons for optimism about developing Asia’s job prospects.

“First, despite the growing use of industrial robots in the region, new technologies often automate some tasks of a job, not the whole job,” the bank said.

Second, automation takes place only where it is both technically and economically feasible, and it has so far been concentrated in the region’s capital-intensive manufacturing with relatively low employment levels.

Third, empirical evidence from developing Asia shows that jobs created by rising domestic demand more than compensate for job losses due to technological advances. This job creation will likely continue as a growing middle class consumes more and better goods and services, the bank noted.

Fourth, technological advances and rising incomes will lead to new occupations and industries, further offsetting labor displacement due to automation, it said.

“New technologies will alter the composition of skills needed by the workforce,” ADB said, citing inputs from the panelists. “They may lead to more frequent unemployment and lower wage growth for less skilled workers who engage in manual and routine tasks, widening income inequality.”

It said that governments can respond by ensuring workers are protected from these negative effects. This will require policy actions on education and skills development, labor regulation, social protection, and income distribution. Also, government support for new technologies must benefit people and protect their rights and privacy.

Manila-based ADB said it is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration.

Established in 1966, it is owned by 67 members—48 from the region. In 2017, ADB operations totaled $32.2 billion, including $11.9 billion in cofinancing. —VDS, GMA News