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ILO Says Robotic Tech to Take 56% of Asian Jobs, Curb Export Growth

The robots are coming and they’ll be taking human jobs.

While some of the incoming advanced technologies will serve to collaborate with humans, raising their productivity, in lower skilled jobs like manufacturing, automation could usurp laborers and ultimately reduce export growth.

In a new report, “ASEAN in Transformation: How Technology is Changing Jobs and Enterprises,” the International Labour Organization (ILO) said 56 percent of all salaried employment in Cambodia, Indonesia, the Philippines, Thailand and Vietnam is at “high risk” of displacement in the next couple decades thanks to technology.

The Association of Southeast Asian Nations (which includes: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Phillipines, Singapore, Thailand and Vietnam) is effectively facing a technology transformation.

Mass scale job displacement may not be imminent, the ILO said, but the technology that will replace lower skilled jobs in the ASEAN region will be more widely adopted as costs come down and small businesses, as well as the large ones, will be able to benefit.

“Countries that compete on low-wage labor need to reposition themselves,” Deborah France-Massin, director of ILO’s Bureau for Employer’s Activities, said. “Price advantage is no longer enough. Policymakers need to create a more conducive environment that leads to greater human capital investment, research and development, and high-value production.”

And investing further in human capital will need to start happening quickly as tech developments are making it to market faster and their effects are being felt more quickly than ever.

The ILO analyzed five sectors for the report (automotive and auto parts; electrical and electronics; textiles, clothing and footwear; business process outsourcing and retail) and found, of all of them, textiles is the most vulnerable to “extensive technological displacement of workers.”

Technologies like 3-D printing, body scanning, computer-aided design (CAD), wearable technology, nanotechnology, environmentally-friendly manufacturing techniques and robotic automation will be what disrupt the sector.

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Using CAD helps perfect fit and fuels faster delivery, and 3-D printing cuts back on human input, helping production move closer to the markets where goods will be sold. Footwear factories in Asia are already using 3-D printing techniques to open automated shoe factories in destination markets.

“If these operations prove profitable, such automated shoe factories will no doubt reduce the need for ASEAN workers,” the report noted.

Clothes are getting smarter as consumers get savvier—shoes can now provide health metrics and measure distances traveled, apparel can read heart rates and some garments are coming with nanoparticles (often made of silver or titanium dioxide to make garments antimicrobial, UV-resistant, odorless or stain-proof).

Apparel and footwear brands are also increasingly working to curb water and chemical use in production, and cut down on material waste. As the price points of these smart products become more tolerable, consumers will up their demand for these goods at mass. The problem here, however, is the lack of skilled labor to meet that forthcoming demand.

The sewing robots, or sewbots, that are slowly encroaching on human talent will soon change the way textile and footwear production works.

“The disruptive impact on the sector in ASEAN could be very substantial, as robotic automation poses a significant threat of job displacement,” according to the report. “The implication of a technologically induced upheaval for the TCF (textiles, clothing and footwear) sector in ASEAN are profound and likely to disproportionately affect female workers, who currently serve as the background of the TCF sector.”

What’s more, China’s continuous and improved production growth is added concern for ASEAN.

“China currently produces more with less workers, and this production gap will increase as it deploys more automotive processes,” ILO said.

Countries in ASEAN are facing a displacement of lower skilled workers and an increase in demand for higher skilled technicians and engineers to accommodate niche apparel producers.

As much as 64 percent of workers stand to be put out by automation in Indonesia, 86 percent in Vietnam and 88 percent in Cambodia.

“This could reduce export growth as destination markets in Europe and the Unites States bring production back home,” the report noted. “To remain competitive, industry players must accelerate partnerships with educational and training institutions to groom the next generation of TCF workers who have stronger technical qualifications, expertise and the ability to work seamlessly with multiple strands of emerging technologies.”