Philia Wibowo

Automation, like it or not, is inching closer to influencing ways of doing business. A recent study titled “Automation and the future of work in Indonesia” by McKinsey Indonesia revealed that out of 800 jobs and 2,000 tasks, 30 percent of the tasks in 60 percent of the jobs are automated.

By 2030, there will be more jobs created than lost by automation. Indonesia will have a net gain of between 4 to 26 million jobs. Some 23 million jobs will be lost, but some 27 to 46 million other jobs will be created, the study reads.

The Jakarta Post’s Apriza Pinandita sat down with McKinsey Indonesia managing partner Philia Wibowo to discuss the report, focusing on the future of work in Indonesia. Here is an edited excerpt of the interview.

Question: Could you please tell us more about the report?

Answer: When we talk about jobs, one important thing we want to highlight is that it is not jobs that are automated but tasks. For example, this morning, I went to work with a driver. I did not replace my driver’s work, but I searched for the best route in Google Maps. So, the task of finding a route was automated, but the job of driving was still done by my driver.

There are many sources [of job creation], the big two for Indonesia are the growth of the consuming class and increased infrastructure spending. Yes, 23 million jobs will be lost, therefore we believe the priority for Indonesia to go forward is reskilling, even though there is a net gain, but the challenge is how to reskill at least 23 million people whose jobs are being replaced. Not to mention that in 2030 there will be 25 million new people entering the workforce.

Do you have the best example of transitioning toward automation from other countries, and how they engage multiple stakeholders in doing so?

McKinsey has Digital Capability Centers located in different parts of the world, one of them in Singapore. In there, we work with the Economic Development Board’s ecosystem, one of them is with Workforce Singapore. The challenge is to help SMEs [small and medium enterprises] to adopt 4.0.

The good thing that the Singapore government is doing, with the help of our digital capability center, is helping SMEs run an upscaling program that is oriented toward improving performance in the company.

We collaborate with Workforce Singapore to look for a simple technology solution that can help the company. This, for example, is how to make their performance dashboard digitalized. Because of that, they know how to invest without using more money.

One company has managed to increase its revenue by 70 percent without investing more capital. It is not only big companies that can look into 4.0, as it is not always advanced technology. It can be simple tech but needs to be embedded together with an upscaling program.

The report mentioned that learning new skills is key in order to gain from automation. Of all the plentiful job opportunities in the future, 10 million do not exist today. Can you elaborate more?

There will be a mix of an old skill, done in a new way. In e-commerce, for example, suddenly the ability to take photographs of goods or to sell goods becomes very important. Marketing exists, but digital marketing did not exist before.

The most important to highlight are the skills required as there will be a shift in the skills that are needed. The new jobs will need more expertise. In marketing, you cannot just do marketing by sending brochures to the same people. You need to have expertise to understand which segment you want to target.

The ability to manage stakeholders will be needed, because you can do calculations with technology, but to communicate the results, you need to be able to convince the stakeholders.

The skill of developing people will be needed. A machine cannot develop people, so we need to be able to develop people better.

Problem-solving skills need to be very strong. A machine can solve problems but cannot tell you what problems to solve.

How do you perceive the partnership of public and private in reskilling and upscaling so the workforce’s skills will continue to be relevant?

First of all, we’re upbeat because we have a lot of jobs created. We are lucky because we still have a lot of people joining the consuming class. If we’re in other parts of the globe where they don’t have a bigger consuming class, labor cost increase etc., the story will not be as exciting as ours.

The jobs are not created because of technology but because there are many people who are consuming, infrastructure development and so on. But, different aspects of the jobs could change.

Private employers, which employ a large part of the workforce in Indonesia, need to realize that it is coming, like it or not, and the best is to prepare for it. They need to anticipate that new things will come, jobs will change.

A number of clients I have met have built capacities for data scientists, they start talking about how they train their senior management on advanced analytics as they cannot just “have a group of data scientists, but the management doesn’t know what to do with it”. So, preparing the workforce up front is what private companies should do.

The role of the government is to give incentives to the companies that make these “early preparations” and therefore are able to reskill their workforce to be future-ready.

The government of Singapore, for example, has a list of skills that can be upscaled. If people want to upscale their skills, whatever course they want, it will be subsidized as long as it is on the list.

Employers have complained about the skills gap or mismatch in the Indonesian workforce. How do you see this kind of situation, should we do more on the academic front?

It takes an ecosystem to solve this together. Our ministries have their own role, the Industry Ministry is focusing on vocational education and working with the private sector, the Research, Technology and Higher Education Ministry wants to encourage people to get a college degree and so on.

Even primary education is part of the ecosystem, because we also need people with problem-solving skills. It must be taught much earlier.

I would argue that even with the classic education, there are things that we can do. Because as mentioned in the report, you need to work with complex stakeholders, develop people, problem solve and so on.

I am a math graduate from ITB [the Bandung Institute of Technology], I may not know the Python platform, but I learned logic in the early days. So, basic education has a lot to contribute to the skills of the future. But, we still need to improve.

When we were doing this research, I interviewed an executive of one big company in Indonesia. He has worked in multiple countries, namely Korea, the United States and Thailand. I asked him what the difference between talent in Indonesia and other countries was.

He said that when we talk about programming language or whatever you learn now, it will be obsolete in one year. But, what people in Indonesia could learn better is to be grittier. If you cannot solve a problem, don’t stop. So, the most important thing is having such a character, whether we can build a workforce of the future that is very gritty or not.

We need to prepare the ecosystem, from basic to higher education. Companies play a part too because they usually manage performance. Do they want to reward people who have the grit or the easy win? Everyone needs to do everything.

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