Artificial intelligence threatens jobs in BPO industry: Trade Department

By Lara Parpan, CNN Philippines, Sep 6, 2017

Metro Manila (CNN Philippines, September 6) — The Trade Department is sounding the alarm on the threat posed by artificial intelligence (AI) on hundreds of thousands of jobs in the country’s $25-billion business process outsourcing (BPO) industry.

“AI has presented itself more than just as a new technology, but as a threat to the current employees servicing the service export industry and the BPO, including the contact centers,” the Department of Trade and Industry (DTI) said in a statement Wednesday.

It warned that AI can “potentially diminish 45 to 50 percent of the approximately 1.2 million Filipino employees of the BPO industry.”

Trade Secretary Ramon Lopez called on the academe, business, and technology sectors to step up the retraining in higher value-added skills of BPO employees.

“Let us retool and reposition the nature of the current jobs in the industry,” he said in the statement.

AI uses the power of computers or robots to replace certain human tasks. Outsourcing experts say China, India, and the United States have been investing billions in AI. For instance, AI allows computers to answer or provide solutions to common or predictable problems raised in call center transactions more accurately and at faster speeds.

In a December 2016 report on the Philippine BPO industry, the International Labor Organization (ILO) warned that increasing automation could be used in BPO services such as high-volume “IT support, workflow processes and other types of back-office operations.”

Automation could cut a company’s costs by as much as 40 to 75 percent, it added.

The BPO industry is one of the country’s biggest employers, with revenues of $22.9 billion in 2016, or nearly 7.3 percent of the nation’s gross domestic product, the ILO said. It is forecast to generate nearly $39 billion in revenues in 2022, according to the IT and Business Process Association of the Philippines.

Lopez said that the Department of Science and Technology, the Commission on Higher Education, the Philippine Association of State Universities and Colleges, and the United States Agency for International Development is working with the DTI and Silicon Valley-based Filipino technology entrepreneur Dado Banatao in developing a multisector initiative to develop “intensive education and training programs” and the competitive advantage of the services sector.

“There is a need to strengthen curriculum towards computer science, engineering, data science and AI application design, among others. This effort is also deemed to be inclusive as disqualified BPO applicants and retrenched agents will be retrained for AI application development that will eventually enable them to get jobs,” Lopez said.

In August, the Union Network International-Philippine Liaison Council told the Senate that around 60 percent of work, especially in the BPO industry will be affected. The Senate Committee on Science and Technology is looking into government’s plan to address the challenge AI poses.

The ILO report urged the Philippines to remain competitive as a BPO destination by adapting to technological innovation which will require a demand for higher-skilled workers.