“UPSKILLING” has become a byword in the Philippines especially during the pandemic when the lockdowns hastened the country’s digital shift. Rapid developments on the digital front, including the increasing popularity of artificial intelligence (AI), have now made upskilling an imperative and not just a fad that companies and other organizations could ride on to attract talent and retain customers.
AI, for one, is increasingly becoming popular not only in advanced countries but also in countries like the Philippines, where millions are employed in manufacturing and business process outsourcing (BPO) sectors. Companies have given AI and other recent developments, such as automation, serious consideration in their bid to reduce costs and further improve the efficiency of their operations.
Consulting firm McKinsey & Co. noted in an article published on its website in August 2022 that analytics and intelligence, which includes AI, is one of the four foundational types of disruptive technologies being applied in the so-called Fourth Industrial Revolution (IR) or Industry 4.0.
“Steam propelled the original Industrial Revolution; electricity powered the second; preliminary automation and machinery engineered the third; and cyberphysical systems—or intelligent computers—are shaping the Fourth Industrial Revolution,” it said.
Before 2014, McKinsey said the Google search term “Industry 4.0” was practically nonexistent, but by 2019, 68 percent of respondents to its global survey regarded Industry 4.0 as “a top strategic priority.” Seventy percent said their companies were already piloting or deploying new technology.
However, Danilo C. Lachica, chief of the Semiconductor and Electronics Industries in the Philippines Foundation Inc., observed in a recent interview that some Philippine industries are “not even close to IR 4.0.”
“Maybe not IR 1.0 but IR 2.0 and when we asked why, reasons like lack of knowledge, lack of understanding, financial challenges to implement automation, IoT [Internet of Things] were mentioned,” Lachica said.
FACTORIES around the world are now increasingly using innovation and technology, such as robotics and automation, to create new products or improve existing ones. The Department of Trade and Industry rolled out its Advanced Manufacturing Workforce Development Alliance Program which sought to improve the capacity of the education system to develop human capital aligned with the requirements of Industry 4.0. The program is supported by the United States Agency for International Development and implemented by Unilab Foundation.
Trade Secretary Alfredo E. Pascual said the program will boost efforts in increasing the hiring of local workers and strengthen the competencies of the country’s manufacturing sector. “With around 790,000 Filipino graduates annually, companies should find it promising to readily recruit a smart, young and productive workforce for their manufacturing operations,” he said during the launch of the program earlier this year.
Despite the apprehension sparked by the emergence of new technologies and innovation under Industry 4.0, the Asian Development Bank said in a report published in 2021 that the impact of IR 4.0 on BPOs and electronics manufacturing will be “transformative” for jobs and skills. The report analyzed the demand and supply of skills driven by Industry 4.0) technology adoption for both the BPO and electronics manufacturing industries in the Philippines.
“The analysis shows that despite widespread concerns of significant automation and loss of jobs associated with 4IR, the net impact on jobs for both industries to 2030 is likely to be positive, with more jobs being created than lost,” the report said.
However, the ADB report noted that there are “no guarantees” that displaced workers can seamlessly move into these new jobs, as they will likely lack the relevant skills. The report also showed the varying impact of 4IR on both industries, noting that 24 percent of the current workforce could “potentially” be displaced by technologies related to 4IR. While the overall patterns of impact in the two industries are similar, there are some crucial differences.
For instance, automation of jobs will be potentially higher for men in the BPO industry whereas in the electronics manufacturing industry, automation will have a greater impact on women.
The IT and Business Process Association of the Philippines agrees with the ADB report that AI, particularly generative artificial intelligence (GenAI), will have a positive impact on a sector that has become a key cog in boosting the country’s growth. IBPAP said GenAI will help the sector generate 1.1 million new jobs by 2028.
“Companies have long been doing proof-of-concept experiments to determine how they can leverage it in their business operations to improve employee productivity, enhance customer experience, reduce costs, and increase top-line growth.”
IN terms of skills, the ADB report pointed out that evaluation, judgment, decision-making and numeracy will become more important by 2030 in both industries, but the electronics manufacturing industry will also require significant increases in technical skills. There will also be a “greater” need for advanced technical skills in electronics manufacturing.
Both sectors will demand additional person trainings by 2030, 14.2 million from the BPO industry and 7.5 million from electronics manufacturing. In both industries, on-the-job training will be the critical form of skills development.
A recent report released by major professional network platform LinkedIn also noted that the skills needed for jobs globally may change by at least 65 percent by 2030 as rapid developments in AI accelerate workplace change.
However, before diving into AI and other technological innovations, the Management Association of the Philippines (MAP) said the government and the private sector must address malnutrition and child stunting.
Cielito Habito, governor-in-charge of MAP and the former National Economic and Development Authority chief under the administration of former President Fidel V. Ramos, said the Philippines cannot afford to have a major segment of its abundant workforce “ill-equipped” to meet the demands of the future AI-driven economy, by having lower mental capacities due to impaired brain development stemming from stunting at an early stage.
It’s precisely for this peril—an irremediable decline in the quality of human ware—that MAP this year declared an all-out war against stunting. It mobilized its resources, in partnership with government and various stakeholders, to do everything possible to fight it. Ironic, indeed, that in the end, it’s not the robots “taking over” people’s jobs that’s most to fear: it’s people becoming increasingly unable to do them because at the outset, their chances for development were derailed by crippling circumstances of poverty and a total lack of opportunity to redress them.