“APEC Plans for Workers to Thrive and Cope in the Digital Age” by Lee Hwok Aun

2017/35, 1 June 2017

APEC’s Framework on Human Resource Development in the Digital Age, conceived at a High-Level Policy Dialogue in Hanoi on 15 May, is timely and important (click here). The proliferation of the digital economy, popularly known as Industrial Revolution 4.0, presents immense opportunities and challenges for the companies, workforces and governments in the Asia Pacific.

Transformative technological change holds out the potential for innovative products and services, higher connectivity and efficiency, and new growth engines, but also displaces workers, demands new modes of catch-up, and risks marginalizing sectors and widening inequality. Disruption is the mantra of this Digital Age, celebrated for blazing new trails and confronting the s tatus quo. However, the more educated, skilled, connected, endowed and empowered stand to gain disproportionately; others’ livelihoods and overall social wellbeing and stability can also be disrupted. Widening inequality and marginalization of lower, and even middle, strata of the population, undermine social wellbeing and risk stoking discontent, anxiety and instability.

The Framework aims to provide strategic direction, policy platforms and avenues for regional cooperation, through further research, policy dialogue and promotion of best practices. It perceptively sets out three main themes and objectives.

First, it establishes the importance of evaluating the future of work in the Digital Age and labour market policy implications. Technological change poses different outlooks for high income countries, where more innovation is generated and where the infrastructure and socioeconomic development levels are more equipped to adapt. However, these economies will also face the threat of job losses as international connectivity enables more job relocation. Countries hosting labour intensive production in global value chains, capitalizing on low wages and labour abundance, will come under pressure as mechanization and high skill demands erode their capacity to attract and retain investment. At the same, many also possess domestic mass markets with growth potential. Digital trade and e-commerce can potentially be harnessed for spurring local economies, but participation is contingent on skills and access.

Second, the Framework focuses on skills education and training. Rapid structural change in economies privilege higher and suitably skilled workers, potentially excluding less skilled workers. Technical capabilities and vocational skills are key to being employable, and continuous training is imperative for workforces to remain relevant and adaptable. The Framework emphasizes specific technical abilities and competencies that meet industry demands. At the same time, not all change can be predicted and future skills needs foreseeable; versatility and critical thinking are also imperative, but these are substantially cultivated in basic schooling and higher education generally omitted in this Framework. While such programmes lie beyond its ambit, it could draw more attention to the integral role of primary and secondary schooling, as well as degree-level education.

Third, the need for social protection institutions to expand and adapt is acknowledged and incorporated into the Framework. The moral imperative and socioeconomic rationale for social protection have magnified in the post-Asian Financial Crisis era, and are underscored by the dislocating effects of the Digital Age, and ensuing widening and possibly entrenchment of inequalities and questions over accessibility and quality of social services. Countries in Asia Pacific and around the world need to take proactive measures to assist workers and households and oversee public wellbeing. Two immense and intertwined challenges confront governments: protecting the self-employed, and making inroads to the informal economy, where hundreds of millions of make a living outside of the formal system.

On the whole, the Framework marks a constructive beginning on an important issue for APEC economies, workers and households. The eventual impact will depend on how effectively it translates into policy research and prescriptions, and regional cooperation.

Dr Lee Hwok Aun is Senior Fellow at ISEAS – Yusof Ishak Institute.

The facts and views expressed are solely that of the author/authors and do not necessarily reflect that of ISEAS – Yusof Ishak Institute.  No part of this publication may be reproduced in any form without permission.