19 Sept 2024 – Jobs lost to AI overseas could mean more work for PHL, BPO industry says

September 19, 2024 | 8:45 pm

THE PHILIPPINES could emerge as a beneficiary of job cuts overseas due to artificial intelligence (AI), an industry group said, noting that outsourcing might actually accelerate hand-in-hand with the AI trend.

Most reports about job losses in relation to AI adoption are written from a foreign perspective, Dominic Vincent D. Ligot, head of AI and research at the IT and Business Process Association of the Philippines, told BusinessWorld on Thursday.

“On jobs, remember most reports about job losses are written from the perspective of Western countries like the US, UK, Canada, and Australia, which actually helps the outsourcing trend to countries like India and the Philippines,” Mr. Ligot, who founded Cirrolytix Research Services, said via Viber.

“We are usually the beneficiaries of these job losses abroad, and to maximize this, we should incorporate technologies like AI into our labor force skills to make the Philippines a more ideal destination for new work,” he added.

A report by the Institute for Management Development (IMD) World Competitiveness Center found that as AI systems become more adept at handling tasks performed by humans, such as data analysis and customer service, economies will experience job security disruptions.

“All in all, AI could drastically alter the workforce through its potential to replace it, a fact that raises important questions about the resulting social and economic effects and the repercussions on talent competitiveness,” said José Caballero, a senior economist at the IMD World Competitiveness Center.

“Additionally, incorporating AI into the workforce can introduce new forms of discrimination, such as biased algorithms, that may reinforce existing inequalities and have broader social impacts on marginalized communities,” he said.

He added that the increasing use of AI in hiring, promotions, and performance evaluations also raises concerns about fairness and accountability.

The report showed that 12% of the executives see AI is replacing existing tasks, leading to a reduction in the workforce, while 7% think AI is leading to employees quiet-quitting or opting for early retirement.

Citing International Labor Organization’s research, IMD said “that high-income economies are more likely to experience significant disruptions during the AI adoption phase than low-income economies, but they are also expected to obtain greater overall benefits.”

It said only 0.4% of jobs in low-income countries are at risk of AI-led automation, while the corresponding forecast is 5.5% in high-income countries.

It added that the concentration of AI-related job losses in female-dominated occupations could dampen the progress made in increasing women’s participation in the labor market.

Asked about the readiness of the Philippines to adopt AI, Mr. Caballero said that the Philippines is handicapped by a dearth of talent.

He said however that the percentage of graduates in sciences — ICT, engineering, math, and natural sciences — is improving, pointing to the easier adoption of AI in the future.

The report ranked the Philippines 52nd in terms of readiness by assessing the quality of the skills in a country’s talent pool, out of 67 countries.

Mr. Ligot said that these rankings contradict other findings.

“The recent World Bank report puts the Philippines in 4th place in terms of AI traffic and corroborates reports by LinkedIn that say the Philippines is ahead of the global average in terms of AI adoption,” he said.

“The data is mixed, which suggests that despite the challenges, the Philippine workforce is very keen to adopt AI and that if the public and private sectors make the necessary investments, we can reap the potential of this new technology,” he added.

Jamil Paolo S. Francisco, executive director of the Asian Institute of Management Rizalino S. Navarro Policy Center for Competitiveness, said the country needs to improve the skills being developed in schools.

“The future workforce will need to learn how to work with advanced digital technologies,” Mr. Francisco said via e-mail.

“We haven’t even quite unlocked the full potential of the Fourth Industrial Revolution and digital automation, and now we are faced with some are calling the Fifth Industrial Revolution, that will require the workforce to collaborate with AI and machines,” he added.

He said that the way forward is to find out how people can do a better job while working with AI or robots.

“Being a largely service-sector-driven and labor-abundant economy, we need to invest in equipping our current workforce and preparing our future workforce for this type of human-machine collaboration to leverage the much-needed potential productivity gains,” he added. — Justine Irish D. Tabile

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