Developing Asia
Over the past 25 years, developing Asia has annually created 30 million jobs in industry and services. Job creation improves productivity, raises earnings for workers and largely reduces poverty.

The Impact of Technological Progress

Shifts in employment from sectors with low productivity and pay, typically subsistence agriculture, to sectors with higher productivity and pay in the modern industry are contributing to this process of raising wages. Productivity improvements come from technological progress within sectors, such as diverse high-yielding crops, innovative machine tools in manufacturing, information and communication technology in the service industries.

A common concern with technological progress affecting the economy is the predicted accompanying job displacement; However, recent studies invite a more optimistic prediction of productivity gains that will generate a positive feedback effect of creating more jobs than are being lost. Furthermore, industries that improve productivity with new technology will lower production costs in industries that depend on them, creating a ripple of higher demand and employment in other industries.

The Asian Development Bank (ADB) supports the power of rising demand with data from 90 percent of the region’s total employment spanning 12 developing Asian economies between 2005-2015. The analysis predicts an 88 percent increase in employment, which is equal to an annual addition of 134 million jobs with rising incomes.

The ADB has also reported that jobs that necessitate cognitive and social skills and use information and communications technology have increased 2.6 percent faster than the total employment rate annually over the last decade. The wages associated with these jobs also increase faster than those of manual jobs.

Reasons For an Optimistic Outlook for Technological Progress in Developing Asia

The ADB emphasizes that most new technologies are implemented in only some aspects of a job, usually routine tasks, so that they create more time for complex tasks for workers. For instance, ATMs allow bank tellers to prioritize customer relationship management. The more obvious benefit entails the job creation to manage these new technologies.

In the last decade, 43 percent to 57 percent of jobs in India, Malaysia and the Philippines were in informational and communication technologies. The category of India’s craft and related workers is expanding to include specialized technicians who manage machines. Moreover, job sectors that would incorporate technological progress have a large capacity for growth.

Healthcare and education jobs make up 15 percent of jobs in The U.S. In lower and middle-income economies in developing Asia, healthcare and education jobs make up 3.5 to 6 percent of jobs, and business services jobs make up 1.5 to 6 percent of jobs, indicating a high potential for expansion.

Technology in the farming industry can have a positive impact on agriculture. In developed countries, waiters tend to receive the poorest wages; whereas in developing Asia, the agricultural workers receive the poorest wages. Technological progress can help farmers the most directly.

Mobile applications such as phone apps or text messages can assist farmers with tracking agricultural inputs. The Food and Agricultural Organization (FAO) and The International Telecommunication Union (ITU) have been supporting farmers in Afghanistan, Bhutan, Fiji, Laos, Myanmar, Papua New Guinea, the Philippines and Sri Lanka to implement emerging technologies.

The Necessity of Job Creation

Pakistan’s Khyber Pakhtunkhwa province (KP) has suffered from instability and militancy for several decades with increasing out-migration and shrinking private industries. Since 2014, the government, in partnership with The World Bank, has recognized the demand for job creation, especially for the half its population of 30.5 million that are under the age of 30.

Turning to the opportunities of the digital revolution in 2018, the government created a program, Digital KP, that directly addressed this youth unemployment issue by preparing the younger generation for occupations in the technology sector. By supporting the youth with advancing technology, the region is on its way to stability and success.

Many educational programs are being implemented to provide foundations for learning necessary skills. Another strategy involves increasing local IT and digital businesses and attracting investment for them through tax relief programs, promoting co-working spaces and sponsoring annual tech events such as The Digital Youth Summit.

Addressing the Potential Issues

As developing Asia is expected to grow by 6 percent in 2018 and by another 5.9 percent in 2019, governments are aware of the potential challenges presented by increasing new technologies. Some businesses might not overcome the displacement of jobs.  

“ADB’s latest research shows that, on the whole, countries in Asia will fare well as new technology is introduced into the workplace, improving productivity, lowering production costs, and rising demand,” said Yasuyuki Sawada, ADB’s Chief Economist.

“To ensure that everyone can benefit from new technologies, policymakers will need to pursue education reforms that promote lifelong learning, maintain labor market flexibility, strengthen social protection systems, and reduce income inequality.”

Benefits of the ADB

The ADB offers different strategies, such as tax policies that will fight against income inequality. The same technological progress that may cause issues to workers could also foster skills, job-match and provide social protection. For the unemployed, the government can create programs that support them as they navigate the new labor market.

Developing Asia also benefits from the technological progress as it allows older workers to continue participating in the labor force past current retirement age. Artificial intelligence can either substitute or complement physically demanding tasks.

To maximize the benefits of technological progress while compensating for any losses, governments must adapt to the situation with policy changes. Technological progress can then become an optimistic gateway to reducing poverty in developing Asia.   

– Alice Lieu
Photo: Flickr