Automation creates new jobs for tech sphere in PHL

By Lorenz S. Marasigan, Business Mirror 3 Oct 2019

WITH the Philippines undergoing some sort of baptism of fire under the Fourth Industrial Revolution (FIRE), job automation is expected to be a trend across different industries, a socially painful initiative that may displace 18.2 million employees.

However, according to McKinsey & Co. Managing Partner for Southeast Asia Kaushik Das, this may also present an opportunity for the Philippines to create new jobs in the tech sphere.

“Automation has an impact on societies and people, and if you don’t get ahead of this, this could create a huge social unrest. In the Philippines, because of tech trends, around 40 percent to 50 percent of jobs will be impacted,” he said.

The agriculture sector is seen to take the biggest blow, with 6 million jobs at stake. This is followed by retail and wholesale at 3.6 million, manufacturing at 2.4 million, transportation at 1.6 million, administrative and support at 1.1 million, and construction at 900,000 jobs.

Accommodation and food services trailed behind at 864,000 jobs, education at 336,000, finance at 245,000, health care at 156,000 and some others accounting for 960,000 jobs.

Each sector has an automation potential that spans between 28 percent and 61 percent, which pertains to the likelihood of new technologies being introduced to replace human capital.

“A lot of their work will change and 18.2-million jobs will be impacted. A lot of other jobs will stay, but the job description will change. This has a potential to create social problems, but all these forces will also create new jobs,” Das explained.

This, however, requires the Philippines to upskill its work force to replace the potential job loss and meet the growing demand for tech workers, he said.

“Government and companies need to get ahead in re-skilling their people,” Das said.

Player in Asean economy

This may be a prerequisite for the Philippines to continue on treading a steady growth trajectory of roughly 6 percent per year. Das said the Philippines, in the next decade or two, will be the second-largest contributor to the Asean economy, only next to Indonesia.

“The Philippines will be a significant part of the Asean economy,” he said. “It will outgrow other Asean countries.”

The drivers for this, Das said, are mid to large companies, which the Philippines is “blessed with.”

McKinsey estimates that the arrival of the Fourth Industrial Revolution is expected to create up to $3.7 trillion in value to global manufacturing, underlying the tremendous opportunities that successful, holistic technology-enabled transformation can bring.

“McKinsey sees great promise for Filipino corporates in the age of disruption. The Philippines has been identified as a recent accelerator in a region of outperformers. This will see global trends hitting the shores of the Philippines in the next decade, and the country must leverage these opportunities to ‘future proof’ its growth, especially with the arrival of the Fourth Industrial Revolution,” McKinsey Singapore Senior Partner Vinayak HV said.

He that with the market now facing increasing digital disruptions, businesses need to develop a strategic response to adopt and harness new digital capabilities to stay ahead of the game.

“A pivot toward digitally or technologically enabled transformation is no longer a question of if, but when,” he said.