East Asia and the Pacific, seen in the context of the world economy, stands out as a paragon of development. Despite the recent ravages of the pandemic and the persistent tensions of geopolitics, the region is growing at stably high rates and the benefits are widely shared. But seen in the context of its own past and its potential, the region's economic performance is less impressive. Growth is still below pre-pandemic levels, except in Indonesia, and output has not yet recovered to pre-pandemic levels in several countries, especially in the Pacific. This Economic Update examines three challenges faced by the region: shifting growth dynamics, trade protectionism, and technological change. For three decades, China's growth has spilled over beneficially to its neighbors, but the size of that impetus is now diminishing. The region will therefore need to strengthen domestic drivers of growth by implementing long-deferred deeper reforms (Reviving Growth, April 2023 EAP Economic Update). The other two challenges stem from changes in the twin pillars of the region's remarkable inclusive growth: exporting to predictably open global markets and producing with labor-intensive methods. Policies and uncertainty precipitated by global tensions are changing patterns of trade and investment. While some countries, like Viet Nam, are benefiting from their role as hubs, the divergent and conflicting objectives of their large trading partners may limit opportunities to play this role. Concluding deeper international trade agreements within the region and with other large countries may help create more open and stable trade regimes. Lastly, new technologies, such as robots, artificial intelligence, digital platforms, and broader digitalization, are irresistible because of their powerful impact on firm productivity (Firm Foundations of Growth, April 2024 EAP Update). These technologies are, however, affecting the relationship between growth and jobs, through three channels: creating new tasks, enhancing labor productivity, and displacing workers. The productivity gains from automation and the resulting higher scale of production helped create jobs for skilled workers engaged in non-routine manual and cognitive tasks in Indonesia, Malaysia, the Philippines, Thailand, and Viet Nam. However, robots have also displaced low-skilled formal workers who were engaged in routine manual work. EAP countries, with their weaker services sectors, employ fewer people in cognitive task occupations than advanced countries but the share of workers potentially exposed to AI is in fact larger than the share exposed to robots. Digital platforms are encouraging participation in the labor force of the marginalized but also inducing some formal sector workers to embrace a new digital informality. While the evolution of technology is hard to predict, the region must equip its people with deeper technical, digital and soft skills that complement the new technologies; facilitate capital mobility and worker mobility across sectors, occupations and space; remove factor price distortions that could lead to excessive automation; and encourage social insurance for workers in the new digital informal economy.
Authors
- Disclosure Date
- 2024/10/18
- Disclosure Status
- Disclosed
- Doc Name
- World Bank East Asia and Pacific Economic Update : Jobs and Technology
- Pages
- 150
- Product Line
- Advisory Services & Analytics
- Published in
- United States of America
- Rel Proj ID
- 4E-East Asia And Pacific Economic Update October 2024 And April 20 -- P507415
- Unit Owning
- EAP Chief Economist Unit (EAPCE)
- Version Type
- Final
- Volume No
- 1
Table of Contents
- Contents 5
- List of Figures 6
- List of Tables 10
- List of Boxes 11
- Preface and Acknowledgments 13
- Abstract 17
- Overview 19
- Recent developments 19
- Changing regional growth dynamics 20
- Trade investment and global tensions 21
- Labor markets and digital technologies 22
- Equipping the workforce with the necessary skills 26
- Facilitating labor and capital mobility 27
- Removing factor price distortions 27
- Expanding social insurance for workers in the new digital informal economy 27
- Recent Developments and Outlook 29
- Recent developments 29
- Components of demand consumption investment exports government spending 32
- Consumption 32
- Investment 32
- Exports 35
- Macroeconomic policy 37
- Four influences on regional growth 38
- Shifting growth dynamics 38
- The burden of debt 41
- Uncertainty 44
- Trade investment and global tensions 50
- Growth forecasts 54
- Outlook 54
- Risks 60
- Technology and Jobs in EAP 65
- Overview of EAP labor market 65
- Five facts about employment in EAP 65
- Five facts about labor earnings in EAP 70
- Technology and the labor market 75
- Industrial robots 81
- Artificial Intelligence AI 90
- Working with digital technologies 96
- Digital platforms 106
- Spotlight Aging and new technologies 108
- Policy 112
- Appendix 125
- 100 128
- 101 129
- 102 130
- 103 131
- 104 132
- 105 133
- 106 134
- 107 135
- 108 136
- 109 137
- References 137
- References for Chapter 1 Recent Development and Outlook 137
- 110 138
- References for Chapter 2 Technology and Jobs in EAP 138
- 111 139
- 112 140
- 113 141
- 114 142
- 115 143
- 116 144
- 117 145
- 118 146
- 119 147
