CLM must prepare for 'Industry 4.0'

CLM must prepare for 'Industry 4.0'

The phrase "Industry 4.0" has become a buzzword in Thailand. From agriculture to education, every sector aims to upgrade to "smart" status. This means the Thai economy is going to be automated, with human-machine interaction elevated to a whole new level.

In fact, many powerful economies like Germany, the US, Israel and Japan, as well as emerging economies like China, are already at the forefront of artificial intelligence (AI) and the Internet of Things (IOT).

Migrant workers hold identification documents while queuing to register at the Labour Ministry in Bangkok last year. Apichit Jinakul

In Asean, Singapore has chalked up some success in its digital ecosystem. Long story short: the whole world is getting ready for Industry 4.0, or the fourth industrial revolution.

Amid a greying population and falling birth rate, scaling up to 4.0 is a smart move for Thailand. If the potential of the smart economy is fully unleashed, intelligent robots could replace the needs of human labour in most sectors including agriculture, manufacturing, healthcare and services. While it will take meticulous efforts and investment to achieve Thailand 4.0, how will this impact all the poor migrant workers from Cambodia, Laos and Myanmar (CLM) which rely on Thailand for employment?

Even though the economies of CLM countries are improving, migration to Thailand and other neighbouring countries is still the main exit route for the poor. Job creation remains a major challenge. Eventually the time will come for those countries that have prepared the best to robotise their economies. Machines will do all the "3D" -- dirty, dangerous and demeaning -- jobs that are now occupied mostly by the migrant workforce.

Since there is possibility that multinationals will have less of an incentive to slice up their production chains, the current level of foreign investment based on cheap labour costs will become irrelevant. Unless the proper preparations are made in advance, the global transition to Industry 4.0 will be something akin to opening Pandora's Box.

It's time to face the facts. CLM countries have not even shown they can tap the full potential of industry 2.0 or 3.0, let alone 4.0. In the greater connected global chain, these countries manage to sell cheap labour for labour-intensive activities and the exporting of raw materials. Yet technologically speaking, they don't possess adequate value-added manufacturing capacity.

Yes, more people are using internet, smartphones and mobile internet. But many rural places still lack access to electricity. To be fair, the global value chain yields certain benefits, but mostly to a handful of economic elites who can access high-tech facilities and services.

To date, none of the CLM countries have been sufficiently attentive to these disruptive technologies. They are still struggling with structural problems like weak governance and poor infrastructure. There is a pervasive crisis in terms of there being an inability to link education with the labour market. On a positive note, with a new economic course set, new jobs will pop up. However, this will only be of benefit if the labour force is better-equipped skills-wise.

Moreover, high unemployment correlates with political and social unrest. If CLM countries stay complacent, Industry 4.0 may feel like a devastating epidemic that produced several failed states, rather than a blessing.

Country leaders must ask more "what if" questions about where they are headed. And when it comes to being prepared, there simply are no shortcuts. The answer is to upgrade education at a national level, improve the vocational training system, and encourage technology and innovation.

The existing investments of all CLM governments are inadequate to support R&D, technology or innovation. The integration of digital technologies and more innovative entrepreneurship must be integrated in curricula as core competencies, regardless of the field of specialisation.

The CLM states must draw on their geographical strengths and develop feasible technologies in areas like green energy and organic rice production.

It is hard to say when or how the twist in this story will arrive. Responding to the realities of the labour market will require the collaboration of academic institutes, policymakers, and all business sectors. It will be unpredictable and tough, especially for old workers to learn new skills. But this is the only way for CLM to stay relevant in the changing technological landscape. These countries cannot be allowed to collapse due to a lack of vision. It is time to invest in youth, science and innovation.


Than Tha Aung is a programme coordinator at the Mekong Institute.

Than Tha Aung

Program Facilitator at Mekong Institute

Than Tha Aung works at Mekong Institute in Khon Kaen.

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