A new MIT report reveals how AI will change the job market in Asia
While AI will be a major growth driver for Asia in the coming decade, it will affect one in every five jobs in Asia, a new MIT study finds.
In Hong Kong, 15% of current jobs will be removed by automation within five years’ time. Still, most executives in Asia Pacific surveyed have confidence that their overall headcount will increase as Asia continues to lead the world in economic expansion.
The impact of AI on work, jobs, and people is one of the most controversial aspects of today’s technological wave that will undoubtedly transform companies, industries, and societies in the years ahead.
In the third report of its “Asia’s AI agenda” series in partnership with ADP, MIT Technology Review explores the degree to which executives in Asia Pacific are expecting and preparing for the automation of job roles, while also looking at how staff working in companies across the region are responding to the increasing need to work “shoulder to software”.
Here are the key findings of the report:
- AI will be a major growth driver for Asia in the coming decade
The company priorities for AI are to enhance customer satisfaction, speed up decision-making, and reduce inefficiencies. The loss of some roles to automation, and the restructuring of others to take advantage of technology-created capacity, are likely. Yet reducing headcount is not a top priority in and of itself. Just one-third of survey respondents listed the need to reduce labor costs as a top-three driver for AI.
- The large majority of companies are expecting headcount to increase
Some 77 percent of survey respondents expect total headcount to increase over the next five years, including in functions where AI is already being deployed. One fifth of respondents overall indicated that they expect five-year increases of more than 15 percent. Very few (just 3 percent) are predicting any headcount contraction.
- Yet AI will affect one in every five jobs in Asia—eliminating one in eight
A new data set provided by Faethm shows that across 11 Asian markets, 12 percent of current jobs are at high risk of being automated in the next five years. By analyzing ILO employment data with each job categorized in up to 218 specific job-related tasks, the data show that the effect of AI on job automation will be greater in Asia’s wealthier economies than in poorer ones (14 percent as opposed to 10 percent). However, many more jobs in those developed markets will actually benefit and be augmented by AI (11 percent of the total) than in less-developed markets (just 6 percent). The data were measured against country and industry forecasts for the adoption of 17 emerging technology categories.
- AI will produce winners and losers
The introduction of AI in high-income countries will result in a high degree of job augmentation and added capacity, mostly in knowledge-intensive industries. In developing Asian countries, fewer jobs are augmented by technology, and little capacity is added. The degree to which jobs are enhanced is determined by the structure of each country’s economy, its technology-readiness in each category, and other economic and social drivers. Labor-constrained markets such as Singapore, Australia, and Japan will be among the fastest to seize the opportunities created by AI.
- Talent and technology agendas must align to sustain long-term growth
Survey respondents believe that jobs are being enhanced by AI, and that employee satisfaction overall is increasing as a result. But is there a false sense of security? Corporate expectations for growth and the belief that AI will have a net positive effect on jobs may prevent the necessary preparations for disruption and reskilling from taking place. Across the region, governments are also unprepared for how fast technology will outpace human capabilities in some areas. Business leaders and policymakers must urgently align technology and talent agendas to build career pathways for those displaced, and to ensure that critical skills gaps do not open up and restrict growth in the long term.
Download the report here to find out more on AI’s impact on Asia’s workforce and how you, as a business leader, can help your employees prepare for the future.