Employment and new technology

Last week, Jaime Zobel de Ayala gave an important speech in an event organized to get our manufacturing sector to prepare for the next industrial revolution. JAZA said tech change is inevitable and we simply have to prepare our people to minimize disruptions to our lives.

JAZA pointed out that concerns of job displacement amid Industry 4.0, stemmed largely from the mismatch between current skills and the skills needed for disruptive jobs. This is exacerbated by the dizzying pace at which technology had developed in the past decade alone.

“I strongly believe that we can navigate the employment challenges brought about by Industry 4.0 by retooling and reskilling the labor force, while also reexamining existing educational curriculum,” he said.

I read this blog written by a Canadian-based Filipino warning us about the coming end of the BPO industry as we know it. Philippineone.com urged to “stop kidding yourself, the demise of the call cen-ter industry in the Philippines is going to happen. Prepare now.”

The blogger explained why we ought to move fast.

“Eighty percent of all call center jobs will disappear by 2025; please don’t doubt this. With an average salary of $450 per month, that results in $5.2 billion disappearing from the Philippine economy. What industry will replace all these jobs?

“Six percent of the Philippine GDP (latest figure is about nine percent) is from call centers (and other BPOs) and the elimination of these dollars will cause an economic fallout that the Philippines has never experienced before.

“The 24-hour Karaoke bars will close down and the coffee shops will let employees go or just call it quits. The employees who share nice downtown apartments with other CSRs will move back in with their parents and buildings will cut rents in half and still have no tenants.”

The blogger insists it is time for Filipinos to start preparing for the inevitable. But the blogger admits we won’t and that’s “because Filipinos have a money-in, money-out mentality and that’s unfortunate.”

The blogger cites personal experience in the business.

“I was in the call center/help desk business for a very long time, here in Canada. I once worked in a bank call center with 150 employees. There are less than 40 now and it’s because of automation and more efficient software. Five years from now, that same call center will employ 10 CSRs maximum. I was told by an employee that although business has neither increased nor decreased, at least one CSR is let go every month.”

The blogger observed that “what’s scary is that there is no replacement industry and there is no plan to create a replacement industry. The Philippines seems ambivalent when it comes to creating new industry and seemingly prefers to wait for foreigners, such as Japan, to offer big dollars to exploit resources and the workforce. I hope Filipinos take matters into their own hands and become independent.

“As it stands now, when this economic retraction begins, Manila will be in chaos and an entire nation will suffer through a recession never experienced before.”

JAZA said we must learn new skills and he is right. But our educational system has not prepared our young people to learn even the old skills.

English proficiency is going down, and let’s not talk about math and science. Many of our teachers are not prepared to teach those subjects.

At this point, we should be beyond re-examining our educational curriculum, as JAZA is urging. We have talked that to death, specially in meetings of Philippine Business for Education.

We need business leaders like IBM’s former country head, Mariels Almeda Winhoffer, who took the bull by its horns rather than join the talkfest. She organized the resources needed to create a college curriculum for analytics.

When I first met Mariels in 2012, she told me about the need to move up to higher value services because the low end call center business is not sustainable. She said she asked herself what is after BPO.

She saw the threat and the potential. She was not even thinking of AI replacing humans and taking away jobs.

She explained: “Know that AI is not about replacing humans, but rather augmenting humans so that decisions can be better made and differentiated value is delivered. But new skills are required to leverage this tool and translate it to business.”

Mariels’s vision is to establish the Philippines as the global center for smarter analytics. She saw analytics growing into a global business that should exceed $200 billion by now. She quickly got into action. She got CHED to work with her to build the college curriculum to establish analytics as a profession.

Mariels got top local business people, including those from Ayala and its subsidiaries, to organize ANALITIKA, a group to develop, nurture, and promote analytics as an industry. She looked at this consortium to define future job roles, skills and internship design, and awareness and promotion.

But after she went back to the US, I haven’t heard much about it. Maybe JAZA can pick up the ball and put some action into his words.

Given how the BPO industry has moderated our unemployment rate to a more manageable level, I dread to think of the consequences of our lackadaisical attitude towards preparing for a future world of Big Data, AI and robotics.

McKinsey, the business consulting firm, reported the results of their survey confirming the need to adapt. “Our key finding is that while there may be enough work to maintain full employment to 2030 under most scenarios, the transitions will be very challenging—matching or even exceeding the scale of shifts out of agriculture and manufacturing we have seen in the past.”

It would be criminal for government and industry leaders to just talk and do nothing fast right now.