From Singapore to Myanmar, countries across South-East Asia will need to equip their workforces for the rapid technological change that is sweeping through industries and economies.
Today, many in-demand occupations did not exist 10 or even five years ago, and this pace of change is only going to speed up, according to the World Economic Forum’s latest annual Human Capital Index.
One estimate suggests that 65% of children entering primary school today will ultimately end up working in completely new job types that don’t yet exist – and the Association of Southeast Asian Nations (ASEAN) region is no exception to these trends.
How is ASEAN faring, compared with the rest of the world?
The Human Capital Index, which represents 92% of the world’s people and 98% of global GDP, measures countries on how they are developing and deploying their human capital, and tracks each nation’s progress over time.
It evaluates not only levels of education, skills and employment, but also how well nations are using this potential to benefit their economies and society as a whole.
As the chart below shows, South-East Asia is about level with the wider Asia region and Latin America, and is some way ahead of the Middle East and sub-Saharan Africa, but behind Europe and North America.
When it comes to making the most of citizens’ talents, Singapore is the top performing economy in the ASEAN region – ranked 24th globally, with a score of 78%.
At the other end of the scale is Myanmar, which along with Laos and Cambodia is one of a handful of under-performers in the region. Although predicted to be the world’s fastest-growing economy in 2016, the Human Capital Index places Myanmar 112th out of 120 countries, at 53%.
Are ASEAN workforces ready for the Fourth Industrial Revolution?
So far cheap and low-skilled labour has provided much of Asia with a competitive advantage. But as the costs of automation fall, the region will need to build up its skilled talent pool.
Over the coming decade, mobile internet connectivity, new energy technologies, cheap processing power and data analytics, as well as flexible and remote working are expected to create more jobs, especially in the areas of transportation and logistics, sales, management and business, law and finance.
To take advantage of these opportunities, countries will need to help their workforces learn the appropriate skills. Several economies, notably Malaysia, Singapore, the Philippines and Indonesia, have plenty of skilled talent available and compare well globally. In other countries, such as Cambodia, Laos and Thailand, employers say it is much harder to find skilled workers.
The report points out that in several ASEAN countries a large number of students are studying social sciences, business and law, while enrollment in subjects that will be critical to taking advantage of technological change, such as engineering, health and the natural sciences, lags behind.
“With a young demographic profile and a rapidly expanding workforce, the region urgently needs to shift its approach to education curricula, bringing major reform to the education value chain, from basic education through to vocational training and higher education,” the report says.
The report also highlights the cost to families, companies and economies when women aren’t working. Throughout the region, women are entering the workforce in smaller numbers than men, representing an untapped source of human-capital potential.
The labour-force participation gender gap is highest in Malaysia (41%), followed by Indonesia and the Philippines (38% and 35%, respectively).
In Vietnam, Cambodia and Laos, there is a relatively small workforce gender gap. Still, both Cambodia and Vietnam, as well as other countries across the region as a whole, have big gender gaps in the progression of female workers to senior levels.
To tackle the problem, the region needs to focus on recruiting and developing female workers, according to the report. “This will become more and more important for the region as it attracts global businesses that are increasingly recognizing the dividends of developing female talent,” it says.
The World Economic Forum on ASEAN is taking place in Kuala Lumpur, Malaysia from 1 to 2 June.