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Address structural unemployment holistically

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Industry 4.0 should not be merely seen as an urban technological revival taking over traditional jobs; it has to be balanced with effective policies that take into account trade deals, says Ronald Benjamin.

A lot of discussion, debate and write-ups have appeared in the government and business sectors lately about the possibility of large-scale unemployment with the advent of Industry 4.0 technology.

Some have concluded that structural unemployment will result due to a mismatch between skills required in this new industrial revolution and the current skills acquired by Malaysians through institutions of learning.

From my observation, such debates are not holistic and fail to seek an integrative variable that will take a holistic view in addressing structural employment which has broad consequences.

The advent of broadly available artificial intelligence offers businesses the prospect of increasing productivity and accelerating innovation.

According to the magazine HR Asia, a survey was conducted among 1,560 business and IT leaders from 15 Asia Pacific economies. The findings reveal that 85% of jobs will be transformed. Such transformation will require the upskilling of workers; certain jobs will be automated or made redundant; and new roles will be created arising from digital transformation investments. Only 14% of jobs will remain unchanged.

Is the advent of artificial intelligence the only reason for jobs to be transformed, creating possible structural unemployment?

Structural unemployment is also created when there are trade deals that favour big corporations. For example, free trade allowed global food corporations to access markets of the developing world and this, in turn, put many small-scale farmers out of business. The farmers could not compete with the lower prices of global firms, which have the means to use economies of scale. This resulted in farmers losing out on opportunities to enhance their earnings and on opportunities for growth in their own land.

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In a nutshell, structural unemployment has the twin elements of technology and trade deals that will lead to greater inequality due to a lack of knowledge and skills. If not handled well by the government and private sector, it will lead to social instability.

In this context, it is vital for the Ministry of Human Resources, in collaboration with the trade and industry and agriculture ministries to come out with a blueprint on how they will address structural unemployment. Structural unemployment should be viewed in a holistic manner and not merely addressed with jargon like Industry 4.0 or as an exaggeration of artificial intelligence.

There are two aspects – policymaking and human capital development – that need to be part of the dialogue process.

Firstly, we need to relook our trade policy especially on so-called free trade that usually favours big corporations at the expense of our farmers, workers and the environment. The nation also needs to come up with incentives for domestic businesses or co-operative entities to invest in rural and semi-rural areas to create more jobs that meet market needs. We need to focus on enhancing food security and encouraging farmers to use new technology that will enhance their earnings.

Efficient infrastructure should be built to ensure ease of logistics, communications and human capital development. This is to reduce migration to concentrated cities that would create structural unemployment as rural workers may lack the skills required of the Industry 4.0 revolution. This will require collaboration between the human resources, trade and industry, and the agriculture ministries.

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Secondly, it is vital that the Ministry of Human Resources comes up with a blueprint for how it is going to handle the transition of our industrial system to meet the inevitable Industry 4.0. Currently, many discussions are being held but very little about on the mechanisms that will propel us to move with the times.

The ministry must come up with a certification body to monitor industries’ preparation towards Industry 4.0. The rate of human capital development in the private sector should be assessed through annual audits of the manufacturing and service sectors to ensure organisations are committed to the development of the workforce and are preparing them to embrace new technology.

The correlation between trade policy and human capital development will require a comprehensive and coordinated approach among key ministries to meet the challenges of structural unemployment.

Industry 4.0 should not be merely seen as an urban technological revival taking over traditional jobs but it has to be balanced with effective policies that take into account trade deals that threaten the bedrock of the nation such as food security and the human resources development of Malaysians living in semi-rural and rural areas.

Therefore structural unemployment has to been seen as an integrated whole and addressed holistically.

Source: Malaysiakini

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