The competitive Asian economy, now considered the world’s locomotive, continues to evolve and reconfigure in a dynamic, complicated and even confusing manner. Likewise, its labour market is changing, both on the demand and supply sides, amid an increasingly deregulated and globalized economic environment. Digitalization is changing enterprise and altering the way we work, and inevitably our way of life.
Naturally, these changes are raising a whole new set of challenges to governments all over Asia and the world. Today, the struggle is how to secure decent jobs and build a more inclusive, equitable and sustainable socio-economic order.
Digitalization is changing enterprise and altering the way we work and our way of life.
Yes, we need to prepare Asia’s workforce to meet the needs of the changing realities in the economy and the labour market, brought about by global competition, never-ending technological developments and the demographic structure in each Asian country.
But in doing so, we must not lose our development perspective, our vision of how workforce preparations and adjustments should be undertaken in an inclusive, equitable and sustainable manner.
One important reality is bound to persist for the foreseeable future: The fact of labour displacement and the need for parallel vigorous job creation. This part of what economist Joseph Schumpeter called “creative destruction” in describing growth under capitalism.
Economists have described growth under capitalism as “creative destruction”
Productive entrepreneurs hatch new ideas and new products, which naturally lead to the erosion or destruction of the old businesses and their replacement with new business models and new products in the market.
This creativity therefore leads to job destruction and worker dislocation. Only a lucky few can keep their jobs during corporate restructuring such as mergers, acquisitions, consolidations or shifting to new business arrangements and focusing on new sectors of activity.
Many affected workers are left to fend for themselves, consigned to the not-so-tender mercies of the labour market. The policy prescription of some governments and analysts is to enhance the employment marketability of the workers through programs such as up-skilling, re-skilling, multi-skilling and improving their job-hunting abilities.
Workers are left to fend for themselves, consigned to the not-so-tender mercies of the labour market
This, however, is easier said than done, especially when workers are not given ample notice, or when the programs are after the fact, not while they are still working productively.
Of course, many employers do not worry about downsizing because they have their own severance arrangements.
This is facilitated by a two-level hierarchy of work –- one level composed of a small group of regular and loyal officers and skilled workers, and another by a large group of dependent or non-regular casual workers, seen as disposable. This dynamic is further heightened under the increasingly globalized supply chains of goods and services.
In this context, informalization of work is one reason why globalization is seen as a dirty word by many trade unions, and is a big issue in many Asian countries. Trade unions in practically every Asian country are resisting changes such as unemployment, low incomes and job insecurity.
Informalization of work is one reason why globalization is seen as a dirty word
An increasing number of trade unions do appreciate employers’ need to be flexible. But they are concerned about the consequent lack of employment security and of stability in workers’ terms and conditions, when these workers are not afforded the protection of trade unions. This is why the trade union movement is insisting that all workers are accorded the right to join trade unions of their own choosing and bargain collectively.
Policy makers will have to develop new regulations concerning the portability of safeguards and benefits between jobs and the equivalent treatment in laws of different forms of labour and employment types.
An economy cannot stand still if it is to grow. New ideas, products, markets and technologies are needed to keep society advancing. To minimize the negative impact of business and job destruction and maximize the positive impact of business and job creation, we need greater policy coherence in human capital formation and economic and labour market governance – an economy where the human and social dimension is fully enshrined.
We need greater policy coherence in human capital formation and economic and labour market governance
To this end there should be continuous consultation and cooperation with all the stakeholders on how to pursue ever-higher levels of social and economic development that create more decent jobs, close the gender divide and strengthens values of fairness, equality and social responsibility.
There should also be more comprehensive government-employer-trade union collaboration and cooperation to develop more effective future workforce strategies to prepare for the disruptive changes and skills requirements. This should include adjustment measures which minimize job displacement, and a program to ensure the smooth transitioning of workers from the old to new or reformatted jobs.
In conclusion, digitalization will continue to impact work, workers and organizations in profound ways. The resultant job displacements will be inevitable. Therefore, it is essential to adopt a preemptive approach towards improving the long term employability of workers and facilitating greater mobility of labour. ###
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