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Business Trends

Asian companies 'planning big shift to automation'

Upskilling needed for workers, but less than 5% of employers are ready

Workers could find themselves earning less, unless they already have skills that are demanded by many organizations.   © Reuters

HONG KONG -- Companies in the Asia-Pacific region are planning to automate 23% of their work on average in the next three years, reducing the need for full-time employees, according to a survey by U.S.-based consultancy Willis Towers Watson.

The survey covered 909 companies across the world, including 507 from the Asia-Pacific region, and spanned manufacturing, financial, retail and other major industries. It found that work automated through artificial intelligence and robotics accounted for 13% of the workload for companies today, compared to 7% three years ago.

Of the surveyed companies in the region, 85% said they plan to expand their use of automation in the next three years. As a result, 48% of employers said they will likely require fewer employees three years down the road, while 20% said they can work with fewer employees today.

Rather than putting many people completely out of work, automation will likely bring about changes in employment contracts, the companies said. Some 52% of respondents said they are planning or considering "deconstructing" jobs into component tasks to determine the parts that can be automated. A total 58% said they will utilize non-employee workers, such as freelancers and contractors.

"Organizations aren't really thinking about automation as purely replacing people, but rather augmenting or supplementing human productivity and performance," said Hamish Deery, leader for talent for the Asia-Pacific region at Willis Towers Watson, in a telephone interview with Nikkei Asian Review.

Deery said the popular belief -- or "myth" according to the report -- that workplace automation will negatively impact workers as machines take over jobs from humans, was not true for companies around the world. In fact, technology could "democratize" labor for many workers in Asia as the spread of high-speed internet in the region lets people work from anywhere, allowing Asian companies to make use of the so-called "gig economy" to access skills and talents, said Deery.

But are companies in the region prepared to embrace the latest technology and ready their workers for new working environments?

In the survey, less than 5% of Asia-Pacific companies said their human resources functions were fully prepared for the changing requirements of digitization. When it comes to upgrading skills for their workers, only 51% said they are planning or considering re-skilling their employees. All of this could mean workers will be earning less, unless they already have skills that are demanded by many organizations.

Automation could fundamentally change the economic structures of emerging and middle-income countries in Asia that have been attracting foreign investments on the back of cheap labor. These countries could lose their competitiveness when automation begins to play a significant role in companies' cost-cutting initiatives.

India's former central bank chief Raghuram Rajan warned in an recent interview with Nikkei Asian Review that jobs are disappearing not because of global competition but "via technology," and the spread of automation technology could cause inequality in the world. "I don't think we are prepared" for all the changes that are coming, said Rajan.

Willis Towers Watson's Deery highlighted education as the key for these countries to make sure automation has a positive impact on society as a whole. "Governments and the education sector can work with industries on the changing nature of skill requirements, and [on] making sure that it is reflected in the education system so that workers are well-prepared," said Deery.

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