Millions of SE Asian jobs may be lost to automation in next 20 years — ILO

July 08, 2016

SINGAPORE — More than half of workers in five Southeast Asian countries are at high risk of losing their jobs to automation in the next two decades, an International Labor Organization (ILO) study found, with those in the garments industry particularly vulnerable.

About 137 million workers or 56% of the salaried work force from Cambodia, Indonesia, the Philippines, Thailand and Vietnam fall under the high-risk category, according to the ILO study.

“Countries that compete on low-wage labor need to reposition themselves. Price advantage is no longer enough,” said Deborah France-Massin, director for the ILO’s Bureau for Employers’ Activities.

The report said workers have to be trained to work effectively alongside digitalized machines.

Southeast Asia is home to more than 630 million people and is a hub for several manufacturing sectors, including textiles, vehicles and hard disk drives.

Of the 9 million people working in the region’s textiles, clothing and footwear industry, 64% of Indonesian workers are at high risk of losing their jobs to automation, 86% in Vietnam, and 88% in Cambodia.

Garment manufacturers in Cambodia, who take orders from retailers such as Adidas, Marks and Spencer and Wal-Mart Stores, Inc., employ about 600,000 people.

Neighboring Vietnam is seeing record investment in its footwear and textiles industries, due to new free-trade pacts with major markets, including the US-led Trans-Pacific Partnership. It is the second-largest garment supplier behind China to the United States.

The United Nations agency said technologies including 3D printing, wearable technology, nanotechnology and robotic automation could disrupt the sector.

“Robots are becoming better at assembly, cheaper and increasingly able to collaborate with people,” the ILO said.

The textiles, clothing and footwear sector is at the highest risk of automation out of five industries analyzed in the study, including automotive and auto parts, electrical and electronics, business process outsourcing and retail.

In the automotive and auto parts industry, more than 60% of salaried workers in Indonesia, and over 70% of those in Thailand face the risk of their jobs being displaced.

Southeast Asia’s automotive sector, the seventh-largest producer of vehicles in 2015 globally, employs more than 800,000 workers, the report said.

Known as the “Detroit of Southeast Asia”, Thailand is a regional production and export hub for the world’s top carmakers. The auto sector accounts for around 10% of Thai GDP and employs a 10th of its workers in manufacturing. — Reuters