Although the Fourth Industrial Revolution (4IR) brings about economic efficiency, higher labor productivity, product improvements and better competitiveness, it will undeniably pose a big labor problem as millions of jobs in many countries including Vietnam will be affected.

Representatives of APEC member economies discuss policy responses to changes in the labor market 

This topic was explored in the APEC 2017 High-Level Policy Dialogue on Human Resource Development in the Digital Age held in Hanoi on May 11.

Women, unskilled workers most affected

The 4IR is having a dramatic impact on the labor market, with APEC members no exception, said Phu Huynh, labor expert of the International Labor Organization (ILO). Technologies are gradually penetrating the production process and changing the structure of the labor market, such as robotic automation, artificial intelligence, Internet connectivity and 3-D printing technology.

In fact, the percentage of population using the Internet has risen sharply over the past 15 years. In 2000, the percentage of Vietnam’s population with access to the Internet was small but in 2015, it surged to more than 55%, according to ILO data.

For more developed member economies like Japan, South Korea or Canada, the rate is up to 95%. In addition, the speed of automation in production has increased rapidly.

Vietnam is one of the countries with the highest rate of labor affected by automation, after China, with nearly 70% of positions, said the ILO.

It is estimated that 86% of Vietnam’s textile-garment and leather-footwear workers and 75% of employees in the electronics industry would face the onslaught of automation, says a report recently published by the ILO. These are the most labor-intensive sectors in Vietnam today.

Vietnam has yet to witness the impact of technology at the workplace to a degree similar to that some other neighboring countries have experienced. This is mainly thanks to competitive labor costs coupled with relatively high costs of investment in technology.

However, innovations such as robot automation have infiltrated into various industries, including textile-garment, leather-footwear and electrical-electronic products.

Women and unskilled workers will be the most vulnerable to automation, Phu Huynh said.

In need of coordination

Navigos Search managing director Nguyen Phuong Mai said job seekers’ English skills were always a top concern of employers.

Citing information technology (IT) as an example, the demand for hiring IT engineers is huge, which is not met by the current supply, both in quantity and quality. The market is short of workers in general and skilled people fluent in foreign languages in particular.

“Because of their dire need for IT engineers good at foreign languages, many foreign businesses have changed their recruitment requirements by prioritizing English proficiency over expertise,” Mai said.

In addition, as Vietnam has officially joined the ASEAN Economic Community (AEC), the “brain drain” would rise, especially among middle- and high-level human resources. More and more talented people in some sectors such as IT and accounting/auditing are offered good opportunities by companies in other regional countries.

Kim Le, human resources manager of ManpowerGroup Vietnam, expressed a more optimistic view, saying, “We believe the future of employment is not necessarily a trade-off between people and machinery. The development of the digital age is a chance for governments to create more jobs.”

Technology is facilitating the emergence of new models that can help solve the current problems in the labor market, such as the birth of the gig economy, with thousands of short-term jobs created through the formation of technology startups like Uber, Lyft, Airbnb and Grab, according to ManpowerGroup.

“On the positive side, human intelligence combined with the rapid development of new technology will make our world more prosperous,” Le said.

In order to capture the opportunities and mitigate the negative effects of digital technology, it is essential to improve the capacity of human resources in the right way, said ManpowerGroup. This requires enduring and persistent efforts, well-rounded investment and strategy for human resource development, from training and retraining to the addition and renewal of skills and knowledge.

Navigos Search suggested there be regulations to assist enterprises in staff training policies as well as guidance on orientation and promotion of labor migration in the AEC.

At the macro level, Huynh from the ILO said APEC members should undertake joint research, share knowledge and monitor job market indicators. At the same time, there should be close coordination between policymakers, businesses and educational institutions.

SGT