Advancement in technology leads to a new world. Although automation is several decades old, the development of highly intelligent technologies, such as robotics and those based on different forms of artificial intelligence (AI), have only recently emerged.

Several jobs have been replaced by technology and automation, while others are starting to become obsolete. However, the net effect of job creation still needs precise calculations. In addition to that, a number of jobs are redefined with new requirements on skills and education.

Automation is inevitable as it will come whether we are ready or not. Countries need to be prepared for the emergence of automation by implementing policies and helping individuals and businesses to reap the maximum benefits. Policies are also needed to mitigate negative impacts from the displacement of several categories of workers from their current roles. In both cases, policies and strategies will help workers make transitions to a more automated economy.

The Economist Intelligence Unit (EIU) sets an index for 25 countries to measure their readiness for automation based on whether they have policies and strategies on that matter in areas of innovation, education and labor market. The index’s findings showed there are few policies in place to specifically address challenges coming from the rise of automation. Indonesia ranks 25th from 25 countries in the overall readiness for automation.

In innovation, Indonesia is ranked 23rd among the 25 countries, with a share of gross expenditure on research and development (R&D) at only 0.08 percent of the gross domestic product (GDP). In comparison, South Korea was at the top, followed by Malaysia and Vietnam at 16th and 21th, respectively. South Korea, Malaysia and Vietnam recorded expenditures on research and development (R&D) amounting to 4.3, 1.3 and 0.37 percent, respectively, of their GDP.

Several factors hamper technological development Indonesia, such as restrictive visa regimes and labor policies, which prevent domestic businesses from hiring the best technology talents available. Excessive red tape in starting a business holds back technology entrepreneurs in several countries, although support for tech start-ups are more common.

With the implementation of automation, skills needed to perform tasks will be different from the current set. Therefore, policies in education are needed to prepare workers to have the right skills for such jobs. However, Indonesia ranks the lowest in that area.

This indicator includes policies related to education that are basic, post-compulsory and continuous, as well as the learning environment. The current educational policies in Indonesia have not captured the strategies for skills in the 21st century, nor have they prepared teachers to teach skills needed in the era.

South Korea leads in that area, thanks to its strong efforts to reform teacher training programs and assessment processes, as well as update school curricula with a particular emphasis on integrating soft skills into classrooms. Soft skills are needed as they cannot be replaced completely by robots and AI.

One impact of automation is in the management of workplace transition, wherein new skills and expertise are needed to operate the machines. The majority of production lines employ a mix of automated stations and manual operations for various processing steps. At the same time, the government and industries are supported by educational institutions.

However, they face a challenge in gaining the skills needed to operate effectively in the future workplace and seize opportunities brought by automation. Labor market policies that enable greater worker mobility and flexibility can help countries meet this challenge.

In terms of labor policies, Germany, Singapore and South Korea achieved the highest scores in nearly every labor market policy indicator, including in government support and encouragement of workplace retaining, as well as approaches to vocational trainings. Meanwhile, Indonesia is ranked 22nd.

In most developing countries, vocational education and training are weak. Vocational training is not just meant for young workers, it allows older workers to continue their education. Indonesia’s policy to strengthen vocational schools is on the right track, but it needs to further emphasize 21st century skills so the country can reap the advantages of automation in the near future.

Lifetime learning is essential to enable people to adapt to technological changes. It gives people the opportunity to voluntarily undertake training throughout their careers in order to acquire new skills.

With all of Indonesia’s indicators ranked toward the bottom of the index, there is plenty of work to be done, not only by the government but also industries and educational institutions. However, the first step is to know Indonesia’s position in terms of skills needed in automation compared to other countries. Once we know Indonesia’s position and the kind of skills needed, then the government, industries and educational institutions can arrange policies and strategies.

The Mandiri Institute in partnership with LinkedIn will conduct a study to gauge Indonesia’s skill level in each sector of the economy; what kind of skills the country’s workers currently have and how far we are from the best practices in each sector in the world. The study will focus on ASEAN countries and Regional Comprehensive Economic Partnership (RCEP) economies, namely ASEAN plus six other countries: China, Korea, Japan, India, Australia and New Zealand.

These skill gaps will be used as an indicator on how far Indonesia has been left behind in preparing skills for the future. It can provide more targeted strategies and policies the government and industries can use to narrow this gap between the knowledge of Indonesia’s workers and the benchmark skillsets.

Then, Indonesia will be ready to embrace automation and gain maximum benefits from this change in technology.

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The writer is head of the Mandiri Institute.

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