SOUTHEAST ASIA has changed dramatically over the last 40 years.
On the doorstep of some of the biggest export markets in the world and on the frontline of tech development, Southeast Asia, with a population of more than 640 million people and an average annual growth rate of 5.2 percent, is now considered the place to do business.
Leaving behind sometimes-difficult pasts, the emerging markets of Southeast Asia have seen tremendous progress, moving on from agriculture as a core economic driver, towards developing its manufacturing and service-based industries.
But while its economies are booming, has this growth translated into opportunity for the people? And does bigger business really mean bigger wages?
“Southeast Asia itself has changed drastically over the past 20 years and of course the workforce has changed along with it,” Toby Fowlston, Managing Director (Southeast Asia) at international recruitment firm Robert Walters, told Asian Correspondent.
Fowlston believes young people in the market these days have different priorities than their parents did. Specifically, they want jobs that provide satisfaction and fulfillment, in addition to monetary incentives and benefits.
They also have different expectations due to the rise of digitalisation, he said. This hasn’t just changed the way people work, but the type of opportunities available to them.
Southeast Asia has gone through dramatic economic transformation over the last half a century which has seen the distribution of employment shift away from agriculture to a more services-based economy.
This trend looks set to continue, according to the International Labour Organisation (ILO).
In Vietnam in particular, taking into account ILO predictions, there is an anticipated 27 percent drop in the agricultural workforce between 2000 and 2022. And an increase of 14 percent in the services sector.
Likewise in Indonesia, there is a 19 percent drop in agricultural employment over the same period, and a 15 percent rise in services.
Other than Singapore, this trend is fairly representative of the entire region.
A January 2018 report from ILO found much of Southeast Asia’s economy has increasingly become service-based without having had a proper experience of industrialisation.
Gross domestic product across the region has also boomed and continues to do so with some Southeast Asian countries among the top for real GDP growth rate.
Data from the International Monetary Fund shows Cambodia, Burma (Myanmar), Laos, Philippines, and Vietnam, are all in the top 20 fastest growing economies in the world, all with a growth between 6.6 to 6.9 percent in 2018; well above the global average of 3.9 percent annual growth.
The rapid rate of growth – disregarding the significant dip following the 1997 financial crisis – earned Indonesia, Malaysia, Thailand, Vietnam and the Philippines the title of Asia’s Tiger Cub Economies and saw an increase in the standard of living.
This rapid shift means today’s graduates are looking at a very different job market than previous generations.
More education means more opportunity?
What really sets this generation apart from previous ones is their level of education.
Enrolment in tertiary education has skyrocketed across the region. Universities in East and Southeast Asia have experienced significant expansion in the last few decades with enrolment in higher education in Asia increasing by over 50 percent in the last 10 years.
In both Malaysia and Thailand, almost half of people now go on to university. In Indonesia and Vietnam, it’s over a quarter.
Believing that increasing higher education enrolment would improve the quality of the population and enhance national competitiveness in the globalising world, governments throughout the region have been ramping up efforts to educate their citizens.
But their encouragement may have had unforeseen consequences.
While the overriding reason to attend university is to open up career opportunities, the current “massification” of tertiary education brings with it its own problems; namely under- or unemployment in a highly competitive labour market.
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As the trend towards services looks set to continue, it poses questions about the role of the services sector as a creator of quality jobs and driver of economic development.
In fact, while there has been strong job creation in some ICT-intensive services, notably in India, a significant portion of the jobs created in the services sector over the past couple of decades have been in traditional low value-added services, where informality and vulnerable forms of employment are often dominant.
This has created a great “skills mismatch” in Indonesia, lecturer in development studies at Western Sydney University, Professor Zulfan Tadjoeddin, told Asian Correspondent.
“Everyone in Indonesia has the aspiration to go to university, but those with degrees often end up as taxi drivers or in other menial jobs,” he said.
Competition has never been so fierce
This generation also faces greater competition than their parents ever had to deal with.
According to the Asian Development Bank, the estimated size of the labour force in developing member countries will increase by about 16 million per year between 2015 and 2030.
This oversupply of talents, a worldwide competition for good, middle-class jobs, has the unintended consequence of growing pressure to create more job opportunities, but that pay less.
“If you look at the whole period of post-Suharto era (post-1998), the whole time has been dominated by a stagnant real wage, stagnant quality of employment,” Zulfan said of Indonesia.
The cruel reality confronting many university graduates is intensified competition and little choice but to face an “opportunity trap” that has created increasing social congestion for decent jobs.
Compounding the problem is the almost manic pace of developments in the technology space, both at home in the region and globally. While advancements in technology undoubtedly lead to greater efficiencies in businesses and households, the shift towards automation also means a large segment of the current labour force will be out of a job in the next few years, if they’re not already.
And although administrators and educators are now rolling out upskilling initiatives and upgrading education materials to prepare our youths for the future of work, how do you prepare someone for a job that doesn’t exist today or study for a subject that may lose its relevance in as quickly as five years?
With additional reporting from Max Walden.