By: Guillermo M. Luz

As we go deeper into the Fourth Industrial Revolution, the nature of work—what gets done, who does it, where it’s performed—will dramatically change. This will have huge implications on societies and their workforce, and have important ramifications on our educational systems and systems of learning. Are we ready for this? How can we prepare?

Industry 1.0 (1784) was marked by mechanization, steam power and the weaving loom. Industry 2.0 (1870) brought us electrical energy, mass production and the assembly line. Industry 3.0 (1969) brought us automation, electronics and computers. Today, Industry 4.0 takes us to a new phase of industrialization, where digitization, automation and electronics converge. This convergence of physical, digital and even biological worlds will be brought about by “new” trends in cloud computing, Internet of Things, machine learning and Artificial Intelligence, Big Data, Augmented/Virtual Reality, and others.

In research conducted by RMIT (Australia) for the Apec Business Advisory Council (Abac) on the impact of digital technologies on jobs, they found that 5 out of 10 workplace activities could be automated by 2055, resulting in $15 trillion lost in wages across the 21 economies of Apec (Asia-Pacific Economic Cooperation). They also estimated that 375 million workers today would need to change occupations by 2030, and that roughly one-third of today’s skillsets would be replaced by 2020. By 2024, work roles requiring digital skills would grow by 12 percent. They estimate that two-thirds of children starting education today will hold jobs that currently do not exist.

Today, companies are already having difficulty in finding talent. In a survey conducted among Apec executives by PwC last year, 34 percent of senior executives reported that they were creating more jobs but struggling to fill them with people with the right skills. One of their highest priorities is to have available digital-ready talent. They have identified high-quality education at all levels as the top way to accelerate inclusive growth.

Preparing for the workforce challenge in the Philippines will require action on multiple fronts over a long period. Today’s population of 105 million is estimated to grow to 173 million by 2045. About 92 million will be of working age and another 30 million of school age. Preparing for the jobs of the future will require us to take a deep look at today’s curriculum and methods of teaching in the formal school system. We will all need to work closely with the government to improve the formal schooling system to introduce some basic educational foundation that will prepare people to adapt to the future of work.

Some early research on the future of work in the Philippines already estimate that a low of 28 percent to a high of 89 percent of work, depending on the job sector, has a potential for automation or faces a risk of automation (depending on your perspective). What will be the implication for people whose jobs are eliminated or will be changed dramatically? Will they be simply out of a job, or will we be able to retrain them for other jobs? When we are talking of possibly millions of people over a short period of time, how will we be able to handle this?

Aside from changes in the formal educational system, changes will also need to be made to the vocational training system. For one, it will have to work more closely than ever with the private sector to ensure that people are trained with the right skills and will be placed in jobs. Any mismatch between skills training and job placement would be disastrous in terms of (mis)use of public money, failed expectations and loss of time for job-seekers, and skills and job mismatching for employers.

Apart from training, the other key item is to retrain, reskill, or upskill existing workers for the new jobs of tomorrow before their current jobs disappear. This may prove to be one of the most difficult challenges of all.

Guillermo M. Luz (luz.gm@ayala.com.ph) is an associate director at Ayala Corp. and served as cochair of the National Competitiveness Council from 2011 to 2018.

Business Matters is a project of the Makati Business Club.

Posted on 16 February 2019 under Business Matters section of The Philippine Daily Inquirer