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Upskilling to keep pace with emerging digital and sustainability trends
Southeast Asia has enormous skilled labour potential, and is home to the third-largest labour force in the world that is predominantly young. However, the region also faces the risk of leaving this potential untapped if it fails to create quality employment opportunities. It is critical that the region’s workforce is equipped with the skills needed to shift to higher-value added jobs.
Technologies are constantly being updated, creating a demand for a continually-improving workforce that is able to keep up with the changing digital landscape. Given the pressing urgency for nations to mitigate climate change by transitioning to a net-zero economy, a key part of this transition will require creating upskilling opportunities for green jobs.
Southeast Asia’s workforces will need to upskill with new digital and sustainability skills and capabilities to reap the wealth potential and benefits of upskilling employees across sectors. Upskilling not only mitigates the structural unemployment resulting from skills mismatches but also bridges socio-economic gaps in knowledge and skills.
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Powering growth in Southeast Asia through upskilling
Upskilling can drive significant economic growth
With the right investments from both the public and private sectors, upskilling has the potential to elevate entire economies and drive immense productivity gains. This report highlights the potential impacts on the economy and employment based on PwC’s proprietary Computable General Equilibrium (CGE) model. The CGE model simulates the outcomes of scenarios in which Southeast Asian countries have managed to upskill their workforces in line with Organisation for Economic Co-operation and Development (OECD) industry best practices by 2030.
The analysis shows that wide-scale investment in upskilling has the potential to boost the region’s Gross Domestic Product (GDP) by 4% or US$250 billion, thereby unlocking up to 676,000 new jobs by 2030. The highest GDP uplift was registered in the countries with the largest productivity gaps, Indonesia and Vietnam. In terms of employment, the biggest gains would be felt in Indonesia, Vietnam and the Philippines.
Ultimately, PwC sees four key sectors within Southeast Asia as having significant potential for GDP uplift. They are:
- manufacturing
- agriculture
- energy and utilities
- financial services
US$ 250 billion*
potential cumulative boost to the region’s GDP by 2030
676,000*
new jobs could be created by upskilling by 2030
*The analysis shows that wide-scale investment in upskilling has the potential to boost the region’s Gross Domestic Product (GDP) by 4% or US$250 billion, thereby unlocking up to 676,000 new jobs by 2030.
Unlocking regional transformation through upskilling
Upskilling has the potential to transform economies. In driving a regional workforce agenda, governments can work together to spur regional reforms in order to move towards a complete regional ecosystem of high-tech manufacturing and knowledge-based services.
To achieve this reality, there are a few focus areas for Southeast Asia to yield the biggest impact from upskilling. They are:
Ensuring a “reskill / upskill first” social protection for the workforce impacted by digitalisation and low-carbon transition
Focusing the upskilling investment on the priority sectors e.g. manufacturing and agriculture
Having a holistic strategy and policy framework for targeted upskilling for vulnerable populations and informal sectors
Strategising sector-specific upskilling in line with existing talent gaps and industry trends
Now is the time for transformational change
It remains challenging for Southeast Asia to yield the benefits of upskilling due to key challenges they are facing from a workforce perspective. This is due to factors such as:
- The accelerating urgency of the changing landscape of skills; with no action undertaken, the gap will only get bigger
- Disruptions potentially impacting various segments of the workforce differently
- Future employment potentially growing in the most fertile spots, but not necessarily where it is needed most
Like most changes, the development of upskilling capabilities is a long and exponential process. In order to have people with the right skills for jobs that will propel the region forward to reach its net zero targets and Sustainable Development Goals (SDGs), action needs to be taken today.
“By giving all people opportunities to build the skills they will need to fully participate in the future workplace, we can start to create more inclusive and sustainable economies where no one is left behind.”
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Workforce Transformation Leader, PwC South East Asia Consulting, PwC Singapore
Tel: +65 9667 4961
Partner, Workforce Transformation, PwC South East Asia Consulting, PwC Singapore
Tel: +65 9660 5011
