Future Jobs in East Asia: AI & Robots

The Future of Work in East Asia and Pacific

New technologies are changing labor markets by displacing, augmenting, or creating tasks for workers. Robots are replacing industrial workers in routine manual jobs like assembly lines. AI could displace service workers in both routine tasks (risk assessors) and nonroutine cognitive tasks (interpreters). AI-empowered robots might also affect workers in nonroutine manual jobs. AI and digital platforms may create new tasks (AI-prompt engineers, cloud engineers).

Technology's Impact on Jobs

The vulnerability of jobs to new technologies in East Asia and Pacific (EAP) countries differs from advanced economies. EAP countries have more workers in routine manual tasks and fewer in cognitive tasks, making them more vulnerable to industrial robots than AI. The impact of new technologies on jobs depends on technical feasibility and the economic viability of adoption. A technology is economically viable if its cost is less than the benefit.

In the EAP region, robot adoption has increased overall manufacturing employment because higher productivity from robots increases production scales, offsetting labor displacement. However, robot adoption affects population groups differently. From 2018 to 2022, robot adoption created jobs for about 2 million (4.3 percent) of skilled formal workers but displaced about 1.4 million (3.3 percent) of low-skilled formal workers in five ASEAN countries.

AI is likely to displace and augment jobs. The EAP region may be less exposed to displacement but also less able to benefit from AI. Only about 10 percent of jobs in the EAP region involve tasks complementary to AI, similar to other emerging economies but lower than the 30 percent in advanced economies. In EAP, women and better-educated workers are more exposed to AI than men and less-educated workers.

To assess the overall impact of technology on jobs, it is important to consider the interdependence and impact of technology choices across sectors. EAP mirrors the world in the labor market impacts of agricultural mechanization, but industrial robotization has had different impacts. Mechanization is associated with farm productivity gains and little change in agriculture employment. While farm employment has shrunk globally and in EAP, this is due more to higher manufacturing wages than mechanization's labor displacement. Globally, manufacturing employment rises early in robot adoption and then falls. Developing EAP countries have defied this pattern, with industrial employment continuing to rise as robot adoption deepens.

Digital skills enable engagement with digitalized workplaces using devices, applications, and platforms. Social and emotional skills give people an advantage over machines in tasks involving social interactions. Advanced technical skills enable work in the use and creation of new technologies.

Labor mobility is impeded by market failures and policy distortions, including poor information about job opportunities, underdeveloped land and housing markets, inadequate connectivity, rigid labor market institutions, and inadequate portability of benefits. A higher stock of industrial robots is associated with the relative taxation of capital and labor. Favoring capital over labor can lead to excessive automation and lower employment. Removing distortions would shift automation technology adoption closer to what is socially optimal and raise employment levels.

The need to offer social protection for workers outside regular social insurance systems has become more pressing with the growing prevalence of gig work. Self-employed gig workers in Malaysia are willing to accept a small income reduction for regular contributions to social insurance schemes. Schemes across the world apply various approaches, including informing workers about schemes, financial incentives and behavioral nudges to offer social insurance to informal workers.