No current jobs threat yet from AI, automation in labor front–DOLE

By Samuel P. Medenilla, Businessmirror – Aug 28, 2018

When it comes to doing business, companies still prefer to keep their operations labor-intensive. At least for now.

The Department of Labor and Employment (DOLE) said it has yet to observe any game-changing shift in the local industries toward the so-called fourth industrial revolution with the mainstreaming of new technology like robotics and artificial intelligence (AI).

DOLE’s Bureau of Local Employment (BLE) cited the absence of a new massive displacement in industries that are expected to adapt to such innovation like the manufacturing and business-process outsourcing (BPO).

“Companies are required to report anything related to displacement. This gives us a signal [on any labor market movement],” BLE Director Dominique R. Tutay said, citing data from the Philippine Statistics Authority (PSA).

“So far, we have not monitored this trend [which could be attributed to automation],” she added.

Currently, most displacements are in the retail sector, which is mostly due to reorganization and downsizing.

It is through this method, Tutay explained, the DOLE was able to identify in 2016 the 7,000 workers in the semiconductor industry, who were displaced after their previous positions were declared obsolete.

She noted no such mass retrenchment that could be attributed to new technology has happened since then.

Grim outlook

THE DOLE issued the statement after Verisk Maplecroft released its annual Human Rights Outlook, which showed Philippines as among countries in Southeast Asia, whose workers are vulnerable to automation.

“Over the next two decades, 56 percent of workers in the manufacturing hubs of Cambodia, Indonesia, Thailand, the Philippines and Vietnam will lose their jobs due to automation, the risk of slavery and trafficking appearing in supply chains will spiral,” Verisk Maplecroft said.

The United Kingdom-based global risk and strategic consulting firm urged the aforementioned countries to provide the necessary skills upgrade and social security to the affected workers.

Even the International Labour Organization (ILO) made a similar projection stating 89 percent of the million workers in the country engaged in simple voice-based BPO industry are likely to be replaced by AI.

Tutay earlier said the government is now preparing contingency measures to address the said issue.

Still limited

The labor official pointed out the use of advanced technology in local firms remain limited because it remains a costly proposition, and the country still lacks the necessary manpower for such operations.

But she admitted, however, that this may happen in the near future.

“This may happen by 2020 or 2022. By that time we may see more companies automating their processes,” Tutay said.

She added the Department of Trade and Industry (DTI) is now mulling over putting up a training institution for AI to train people how to maintain such system.

“They want to train people on that [AI] because there are few [institutions] which are offering it in the Philippines,” Tutay said.

Nevertheless, BLE said, there are some factors which may encourage companies to fast-track the automation of their operations such as the government’s ongoing campaign against illegal contractualization.

“If the policy eventually makes it cheaper for them to just automate compared to regularizing their workers they may do so later on,” Tutay said.