BETWEEN 3.3 million and 6 million jobs are expected to be created in Malaysia by 2030, but with the new age of automation Industrial 4.0, preparation and training are fast becoming the critical factor as the new workforce would need new skills.
The question is how well prepared is the industry in facing this new challenge for the evolving job market, and with the current Covid-19 pandemic.
McKinsey & Company Malaysia's senior partner and head of analytics in Asia, Nimal Manuel said the first step is to get the formula right.
Cautioning that automation could displace up to 4.5 million workers, Manuel said this will not translate into the number of working people, but the jobs.
In a report published by McKinsey & Co (McKinsey) titled Automation and adaptability: How Malaysia can navigate the future of work, automation will be seen significantly in jobs that require routinised physical activities such as operating machinery or preparing food but quick to rectify the statement.
"Yes, job loss is inevitable but all the job losses don't mean human resource cut. It is more like an offset for the new labour demand. Once they are re-skilled they will once again be relevant in the workforce as the whole automation process actually creates more jobs," he said.
THE PANDEMIC EFFECT
Stock analysts are predicting most of the world's 3,000 largest companies will see profits decline this year due to the Covid-19 pandemic, with few notable exceptions, such as the pharmaceuticals and healthcare industry.
However, Manuel said businesses should not shy away from technology investments because the future is still 'digital', and in fact, it might be more digitised than ever, and businesses that can prepare effectively for that will have an even better chance of thriving.
"Retail players, for example, have used in-store robots to conduct more transactional tasks like checking inventory in store aisles and remote order fulfilment. Even the non-cash payment options have seen tremendous take-up," he said, adding that the pace of automation adoption will vary across different activities, occupations, and wage and skill levels.
IR 4.0 was gaining momentum even before Covid-19, helping companies transform their operations.
"Its role becomes even more critical against the backdrop of this crisis," said Manuel.
He said as companies restore their operations and build resilience against future crises, digital technologies will be top of mind for many.
A June 2020 McKinsey survey of manufacturing and supply-chain professionals found that 90 per cent plan to invest in talent for digitisation and Manuel listed three pathways for industries to take up digital change.
Firstly is accelerated adoption for quick-win solutions where it will help companies respond and adapt to the new norms, such as tracking employees' health, enforcing safe distancing, managing performance digitally, and supporting remote collaboration like digital performance management (DPM) which have said to have helped boost productivity by 40 per cent.
Secondly is differential adoption rates for solutions that require more foundational IT, operations technology, and data infrastructure. For companies that already have the critical capabilities may speed ahead, while organisations lacking these prerequisites, particularly SMEs, will likely delay implementation.
Thirdly is deferred adoption for solutions that require higher capital expenditure and have unclear or long-term payback periods. Examples include blockchain, nanotechnologies, and the most advanced automation systems.
FUTURE PROOFING THE WORKFORCE
According to Manuel, global investments and policies to support the workforce have eroded over the last few decades and public spending on labour force training and support has fallen in most OECD countries with an average GDP spend of 1.55 per cent in 2010 to 1.09 per cent in 2017.
"It is now critical to reverse these trends. With governments making workforce transitions and job creation a more urgent priority, and businesses and individuals both playing their role; done right, we do believe upskilling at-scale has the potential to make a real difference," he said.
For example, in an attempt to fill current skill gaps, the company AT&T offered all of its employees opportunities to enrol in online computer science programmes at Georgia Tech University, which the company helped set up.
"Although reskilling workers will be one of the biggest challenges employers have to have in order to move forward, technological skills are not the only skills that would need retraining. Social and emotional skills training is important too," he added.
"As we get more knowledgeable, we'll be expecting better leadership skills, and as employers, they too will be looking for higher cognitive skills such as creativity, ability to process complex information, and problem solving too," said Manuel.
LOCAL SCENE
Malaysia recently launched its SkillsMalaysia 2.0 programme, which is a lauded effort from the government as it aims to boost more participation in Technical and Vocational Education and Training (TVET).
While Malaysia's current TVET participation is at 80 per cent, a neighbouring country, Singapore which also has similar programme has been providing credits for all its 25-year-olds so they could attend work-skill-related courses, which sees quite a number of participation from those above 40 years old.
"As much as companies need to upgrade their system in light of automation, individuals, too, will need to be prepared for a rapidly evolving future of work," said Manuel.
"There will be demand for talent, but workers everywhere will need to rethink traditional notions of where they work, how they work, and what talent and capabilities they bring to that work.
"First, we will need to target the right new skills, for example, data scientists, data engineers, technology architects, designers, and so on. There are broad new capabilities that will be in demand such as digital literacy and cognitive, social, and emotional skills.
"Second, rapid reskilling requires shorter-cycle interventions and a different system to recognise those skills. For example, we may see a shift toward microcredits and away from traditional multi-year degrees.
"Third, structuring learning journeys for employees would help them retain new skills and apply them to their role. Organisations will need to assemble learning resources from multiple providers — online platforms, universities, technical organisations, coaches, etc.
"And lastly, a crisis of this degree calls for a mind-set shift towards the greater good for society as opposed to focusing only on competitive advantage for a specific company. Companies that otherwise would be business competitors often have opportunities to collaborate and provide reskilling at an industry level. There is also a role for governments to facilitate this shift.
"All these have to come together in order for automation to be a success, pandemic or not," he said.
