“Automation and the Future of Work in Indonesia”, released on Wednesday by management consultancy McKinsey & Company, projects that 23 million jobs could be displaced by automation by 2030, but 27 million to 46 million new jobs could be created in the same period. 

That would create up to 23 million more jobs than are lost to automation, and 10 million of these jobs would be new types of occupations.

The report suggested that occupations like legal support, machine operators, payroll officers and transaction processors will most likely fall victim to automation.

However, jobs that involve unpredictable physical activities like construction laborers, interface services such as salespersons, expertise like artists and scientists, as well as managing and developing people such as CEOs and project managers, will prevail.

“Skills of developing people and problem-solving need to be very strong. Machines can solve problems, but machines cannot tell us what problems to solve,” McKinsey Indonesia managing partner Philia Wibowo told The Jakarta Post in an interview on Tuesday.

Automation has been a hot topic for Indonesia, which is on its way to digitizing its industries with President Joko “Jokowi” Widodo endorsing the Making Indonesia 4.0 road map last year to support cost efficiency and the competitiveness of local industries. 

This, however, has sparked concerns over the readiness of Indonesian workers as employers complain of deeply rooted skills gaps. Statistics Indonesia (BPS) data shows that graduates of vocational high schools, who were specifically prepared for the workforce upon graduation, made up 8.63 percent of the unemployed as of February, the highest of all educational backgrounds.

Meanwhile, only 12.57 percent of Indonesia’s employed workforce are university graduates, far below the number of graduates of elementary school, which account for 40.51 percent, posing a challenge in ensuring workers have the skills they need to transition into the future workforce.

The skills and capabilities required by employers will shift, with social and emotional skills and more advanced cognitive capabilities, such as logical reasoning and creativity, playing a vital role.

“All stakeholders will need to prepare for substantial changes affecting the future of work. Companies will need to start planning for — and transitioning into — the future of work now, with long-term learning programs both for people affected today and those possibly affected in the future,” reads the McKinsey report, which analyzed 2,000 work activities across 800 occupations.

“Providing job retraining and enabling individuals to learn marketable new skills throughout their lives will be a critical challenge. Midcareer retraining will become ever more important as the skill mix needed for a successful career change evolves.”

SkillsFuture Singapore CEO Michael Fung echoed the report’s sentiment as he believes that AI-enabled automation would not take away people’s jobs, but that the tasks would shift.

“If workers are not willing to upscale [their skills], their jobs will be gone. Individuals need to embrace these kinds of transformations,” Fung said, adding that the government should work with academic institutions to provide the most suitable resources for industries. 

According to international labor federation UNI Global Union Asian Pacific information and communication technology services director Kun Wardana Abyoto, labor unions could jump on the bandwagon if they unite for the common cause and move past issues like the minimum wage.

He gave the example of Singapore’s NTUC, which had teamed up with the government to provide career coaching and digital certification programs to bolster vocational training.

Sectors of most relevance to job growth and new skills required are health care, construction, manufacturing and retail and services, including accommodation, food and education, according to the McKinsey report.

“New labor demand will come from rising incomes and infrastructure spending, among other catalysts,” it reads.

This forecast is consistent with Jokowi’s infrastructure, social spending and manufacturing industry boost. Meanwhile, the rising income of Indonesians will help the retail sector’s growth, especially through e-commerce.

“Indonesia’s online commerce sector has already had a major impact on the country’s job market. For example, Tokopedia now has over 4 million merchants on its platform, many of them first-time entrepreneurs,” the report says. (asp)

Esther Samboh contributed to the story

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