20 Jan 2021 – ADB sees job losses of 24% from BPO, electronics automation

by Beatrice M. Laforga, 20 Jan 2021

THE PHILIPPINES needs to improve its technical and vocational education to offset the expected loss of 24% of the jobs in the business process outsourcing (BPO) and electronics manufacturing industries by 2030, due to increased automation, the Asian Development Bank (ADB) said.

In a study which assessed the information technology-business process outsourcing (IT-BPO) and electronics manufacturing sectors, the ADB concluded that major job losses are in the works but could lead to the creation of new and high-skilled jobs.

Automation in the IT-BPO sector will have a greater impact on male employees, with around 151,000 male workers expected to be displaced, against the 135,000 female employees seen losing their jobs.

Meanwhile, 97,000 women will likely be laid off in the electronics manufacturing industry against 77,000 men.

Despite the projected layoffs, the ADB said productivity in the two sectors will improve dramatically, with more than half of the employers surveyed in those two sectors seeing productivity growth of more than 25% by 2030.

Time spent on analytical and non-routine tasks is expected to increase 13.3%, while time on routine tasks will fall by a similar proportion by 2030. This will make skills like critical thinking and adaptive learning, written and verbal communication, numeracy, management and socialization more critical.

“To support those at higher risk of job displacement, we must look at new approaches to strengthen inclusion and social protection in the context of (the fourth industrial revolution), to ensure that no one is left behind in the new economy,” ADB Philippines Country Director Kelly Bird said in a statement Wednesday.

The ADB said new jobs will emerge as technologies increase productivity, efficiency and competition but the skills of workers will have to be drastically improved. Such a scenario can even result in positive net employment as new jobs created offset the jobs lost.

“These will not materialize if there is a lack of suitable skills in the local workforce to support them. In short, the Philippines’ approach to skills development will be critical in realizing a positive labor market outcome related to 4IR in this industry,” according to the report, “Reaping the Benefits of Industry 4.0 Through Skills Development in the Philippines.”

It estimated 14.2 million more people will have to be trained further by 2030, 14.2 million from the IT-BPO industry and 7.5 million from the electronics manufacturing sector. The bulk of the training requirements to boost their skills will come from on-the-job training and the rest from short professional courses and longer bouts of formal training.