Job disruption in AI era likely to catch Asian governments by surprise, says MIT report

The speed and scale of the transition to artificial intelligence is likely to take Asian governments by surprise, potentially causing economic and social shocks, according to MIT Technology Review.

In a report released Wednesday, the technology media outlet warns of the risk of Asia's employment landscape becoming "increasingly polarised" with a growing number of workers excluded from the value creation side of AI.

"Decision-makers in Asia must assume that technology will continually evolve, making the need for continuous reskilling and training critical," said the report, adding that many governments in the region remain "systematically unprepared" for the changes ahead.

The findings in the report were based on a survey of about 900 executives across 13 Asia-Pacific markets including the Chinese mainland, Hong Kong, Australia, India, Japan, Malaysia, Vietnam, Singapore and South Korea. Over half of the respondents were from companies with more than US$1 billion in revenue.

Potential disruption of job markets has been one of the most hotly debated issues around AI ethics. In a study of 15 countries, the World Forum estimates that AI - often called the fourth industrial revolution - will destroy 75 million jobs but create 133 million new ones by 2020. Separately, a University of Oxford study found that the US alone would see 67.7 million job losses over the next 20 years.

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In Asia, AI is expected to affect one in every five jobs and eliminate one in eight, according to analytics platform Faethm, which provided data used in the report. About 42 per cent of respondents surveyed said they thought AI would eliminate or reduce more jobs than it creates over the next five years.

Less developed Asian economies are at greater risk of seeing more jobs eliminated by automation as a result of AI, the report noted. In comparison, richer countries have larger knowledge worker sectors that can be "augmented" by AI and they have greater resources to invest in reskilling affected workers.

"If you work in manufacturing in Bangladesh, if you work in the call centres in Manila, if you work in a business process outsourcing (BPO) in India - you're in real trouble," Michael Priddis, chief executive of Faethm, said in the report.

The Philippines, India and Vietnam are each expected to experience a workforce automation rate of 8 to 9 per cent over the next five years and see 14 per cent of their manufacturing jobs disappear. In Indonesia, 13 per cent of jobs will be automated by AI within five years.

"Asia's policymakers and business leaders must begin to rethink what employment means for their societies and their economies, recognising that AI's ultimate economic impacts are not yet known and will constantly evolve," the report said. "Jobs for life will cease to exist, just as lifelong learning becomes a permanent fixture of education systems."

Despite the potential disruption of AI, 77 per cent of survey respondents expect their total headcount to increase over the next five years, including in functions where AI is already being deployed, while just 3 per cent see a headcount contraction.

Most companies see three main drivers for adopting AI: enhancing customer satisfaction, speeding up decision making and reducing inefficiencies, according to the report. Only about one third listed the need to reduce labour costs as a top-three driver for AI.

Jobs dealing with customers, such as sales, marketing, customer services and product development, will see the strongest growth from AI while back office functions including finance, human resources and administration will see reductions due to AI. Labour-constrained markets such as Singapore, Australia and Japan will be among the fastest to seize the opportunities created by AI, according to the report.

Asia has become an emerging AI leader for both research and development and deployment of solutions to improve efficiency. According to the report, nearly half of all survey respondents have already deployed AI tools and technologies within their organisation. By 2020, over 90 per cent are expected to have done so.

Shortage of internal AI talent, quality of data and investment costs remain the top challenges in deploying AI. "If China is locked in a battle for global AI leadership, Asian businesses elsewhere are having a tough fight for talent," noted the report.

This article originally appeared on the South China Morning Post (SCMP), the leading news media reporting on China and Asia. For more stories, please download our mobile app, follow us on Twitter, and like us on Facebook.

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