Digitalization seen to affect IT-BPO, manufacturing jobs

Published January 21, 2021, 6:00 AM

by Chino S. Leyco

The country’s information technology-business process outsourcing (IT-BPO) and manufacturing industries will shed about a quarter of jobs due to digital transformation, a latest study by the Asian Development Bank (ADB) revealed.

Based on the ADB’s study “Reaping the Benefits of Industry 4.0 Through Skills Development in The Philippines”, local firms are now making “good progress” in implementing automation preparedness.

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According to the ADB, at least half of the employers surveyed have already adopted fourth industrial revolution (4IR) technologies into their operations.

 “Among employers surveyed in the IT-BPO and electronics industries, 63 percent and 55 percent, respectively, expect to see productivity improvements of more than 25 percent by 2025 from adoption of 4IR technologies,” ADB said.

However, this digital transformation comes with a cost as it will eliminate around a quarter of jobs in both the IT-BPO and electronics manufacturing sectors.

 “Automation will disproportionately impact men in IT-BPO and women in the electronics manufacturing industry,” the bank said.

For this reason, Kelly Bird, ADB Philippines country director, said the country should consider developing industry transformation maps in key sectors to enable the transition to 4IR, with adequate investment in skills development for new and repositioned jobs.

 “To support those at higher risk of job displacement, we must look at new approaches to strengthen inclusion and social protection in the context of 4IR, to ensure that no one is left behind in the new economy,” Bird said.

The study called for the Philippines to develop dedicated 4IR technical and vocational education and training programs. Flexible and modular skills certification programs that recognize skills attainment outside traditional education channels are also important. 

Against a backdrop of rapidly evolving technology, the study also recommended speeding up the pace at which the country’s education system can incorporate curriculum changes to meet industry needs.

In the electronics manufacturing industry, the study recommended supporting 4IR knowledge transfer from large multinational companies to micro, small, and medium-sized enterprises.

 “As 4IR technologies spread rapidly, extensive investments in digital skills will improve the chances of the young and old to access higher-quality jobs and lower the risk of job losses,” Shanti Jagannathan, ADB principal education specialist said.

“Now is the time to rethink delivery of skills using virtual platforms and mobile technologies, and to develop agile training institutions with courses and credentials that match market needs,” Jagannathan said.