Malaysiakini Letter

Address structural unemployment holistically

Ronald Benjamin  |  Published:  |  Modified:

LETTER | There has a lot of discussion, debate and write-ups in the government and business sectors lately on the possibility of large-scale unemployment with the advent of Industrial 4 technologies.

There has been a conclusion that structural unemployment will result due to a mismatch between skills required in this new industrial revolution and the current skills acquired by Malaysians through learning institutions.

Through observation, I find such debates are not holistic and fail to seek an integrative variable that will take a holistic view in addressing structural employment that has broad consequences.

The advent of broadly-available artificial intelligence offers businesses the prospect of increasing productivity and accelerating innovation.

According to the magazine HR Asia, a survey was conducted among 1,560 business and IT leaders from 15 Asia Pacific economies. The finding states that 85 percent of jobs will be transformed. Such transformation will require the up-skilling of workers, certain jobs being automated or made redundant, and new roles created due to digital transformation investments.

Only 14 percent of jobs will remain unchanged. Is the advent of artificial intelligence the only reason for jobs to be transformed creating possible structural unemployment? Structural unemployment is also created when there are trade deals that favour big corporations.

For example, free trade allowed global food corporations to access markets of the developing world and this, in turn, puts small-scale farmers out of business. The farmers could not compete with the lower prices of global firms who have the means to use economies of scale. This resulted in farmers losing out on opportunities to enhance their earnings and opportunities for growth in their own land.

In a nutshell, structural unemployment has the twin elements of technology and trade deals that could lead to greater inequality due to lack of knowledge and skills. If not handled well by the government and private sector it will lead to social instability.

In this context, it is vital for the human resources ministry in collaboration with the trade and industry and agriculture ministries to come out with a blueprint on how they will address structural unemployment. Structural unemployment should be viewed in a holistic manner and not merely address it with slogans like “Industry 4” or as an exaggeration of artificial intelligence.

There are two aspects being policy and human capital development that need to be part of the dialogue process. Firstly, there is a need to relook our trade policy especially on the so-called free trade that usually favours big corporations at the expense of our farmers, workers and the environment. There should also be incentives for domestic businesses or cooperative entities to invest in rural and semi-rural areas to create more jobs that meet market needs.

There should be a focus on enhancing food security and encouraging farmers to use new technology that will enhance their earnings. Efficient infrastructures should be built to ensure ease of logistics, communications and human capital development. This is to reduce migration to concentrated cities that would create structural unemployment since the rural workers could lack skills that are required of the Industry 4 revolution.

This will require collaboration between the human resources, trade and industry and the agriculture ministries. Secondly, it is vital the human resources ministry come up with a blueprint for how it is going to handle the transition of our industrial system to meet the inevitable Industry 4. Currently, there is a lot of discussions but very little on the mechanisms that will propel us to move with times.

Firstly, it is vital for the human resources ministry to come with a certification body to monitor industries' preparation towards Industry 4. The rate of human capital development in the private sector should be assessed through annual audits of the manufacturing and service sectors to ensure organisations are committed to the development of the workforce and are preparing them to embrace new technologies.

The correlation between trade policy and human capital development will require a comprehensive and coordinated approach among vital ministries to meet the challenges of structural unemployment.

Industry 4 should not be merely seen as an urban technological revival taking over traditional jobs but it has to be balanced with effective policies that take into account trade deals that threaten the bedrock of the nation such as food security and the human resources development of Malaysians living in semi-rural and rural areas.

Therefore structural unemployment has to been seen as an integrated whole and addressed holistically.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

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