What the Future of
Work Means to Us
Issues and Policy Implications

The Future of Work
As we go deeper into the Fourth Industrial Revolution, the
nature of work—what gets done, who does it, where it’s
performed—will dramatically change. This will have huge
implications on societies and their workforce, but are we ready
for this? How can we prepare?

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Robots are taking over routine
tasks and will eliminate many low-
skill jobs in advanced economies
and developing countries (WDR
2019)
The fear is that rapid technological
advancement will displace human
labor, widen income inequality,
and further increase the share of
informal work.

Initially the World Bank estimated that 60 to 70 percent of present jobs
could be automated. However, further estimates show that only a small
number of jobs may be fully automated, but at least 30 percent of the
activities in another 60 percent of occupations could be automated with
technologies currently available (McKinsey Global Institute, 2017)

This is why it is impossible to put a figure on the
level of job displacement that will take place
overall.
- WDR 2019
The prevalence of automation versus labor continues to
vary across and within countries.
The effects of automation can also be different among
countries and using one country’s occupational categories to
estimate possible job losses from automation elsewhere is
problematic.

Different groups of individuals will also be impacted differently by
automation.
Young workers may be more affected by automation than older
workers.
Patterns of potential jobs lost also
vary enormously between men and
women because of the mix of
occupations in which women and
men tend to work in, and the
activities that make up these
occupations.

It is not all doom and gloom, however…
Technology provides opportunities to create new jobs,
increase productivity, and deliver effective public
services and through innovation, technology generates
new sectors and tasks.

Automation has disproportionately reduced the demand for less
skilled workers, and the innovation process has generally favored the
more educated.
The premium is rising for skills that cannot be replaced by robots—
general cognitive skills such as critical thinking and socio-behavioral
skills such as managing and recognizing emotions that enhance
teamwork. Workers with these skills are more adaptable in labor
markets.
Technology is changing not just how people work but also the terms on
which they work, creating more new jobs and short-term “gigs.” This
makes some work more accessible and flexible, but raises concerns
about income instability and the lack of social protection.

Building the skills in demand in the labor market requires strong
human capital foundations and lifelong learning. Investing in
human capital is the priority in order to make the most of the
changing nature of work.
Adjusting to the changing nature
of work requires enhanced social
protection. New ways of
protecting people, regardless of
employment status, are needed.

What does this mean to us?

Automation could have significant impact in the Philippines. Studies
estimate that 48 percent of employees’ activity, equivalent to 18.2
million jobs, could be automated (McKinsey & Company Manila
2019)
The largest share of automatable
work totaling to 6 million jobs, is in
agriculture-related sectors, where
occupations involve a large
proportion of physical activities in
predictable environments.
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Other sectors with large numbers
of automatable work include retail
(3.4 million jobs) and
manufacturing (2.4 million jobs).
Manufacturing has the highest
proportion of automatable work of
any sector, at 61 percent.
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The country’s industries have adopted many technologies albeit in
varying degrees of diffusion.
The country needs to focus on
establishing a solid basic
foundation for sustained learning
and on accumulating various
types of capital, while
progressively and systematically
closing the existing technological
and knowledge gaps. (PIDS 2017)

What should we do?
The World Bank identified three areas for policy actions:
1. Human Capital and Lifelong Learning.
2. Social Protection and Labor Policies.
3. Revenue mobilization.

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Early childhood, tertiary education and
adult learning outside jobs are
increasingly important in meeting the
skill demands of future labor markets.
1. Human Capital and Lifelong Learning

1. Human Capital and Lifelong Learning
Early investments in nutrition, health, social protection, and
education lay strong foundations for the future acquisition of
cognitive and socio-behavioral skills. Prioritizing these
investments could pay off significantly for economies, as long as
both access and quality are highlighted.

1. Human Capital and Lifelong Learning
The changing nature of work makes tertiary education more
important. Technology and integration demands higher-order
skills that are transferable across jobs but not acquired through
schooling alone. This has enhanced the wage premiums of
tertiary graduates and reduced the demand for less educated
workers.

1. Human Capital and Lifelong Learning
Aside from changes in the formal educational
system, changes will also need to be made to the
vocational training system. For one, it will have to
work more closely than ever with the private sector
to ensure that people are trained with the right
skills and will be placed in jobs.

2. Social Protection and Labor Policies.
There is a need for broader and more
permanent coverage than most social
assistance programs currently provide
Expanding social assistance should
proceed at the same pace as the
mobilization of necessary resources.

2. Social Protection and Labor Policies.
The government must also provide a livable
income and use more social assistance to
supplement earnings and relax pressure on
minimum wages that are set at levels that
exceed labor productivity. Unemployment
benefits should be provided as income
support to the unemployed.

3. Revenue mobilization
Investments in human capital, basic social protection,
productive opportunities for the people will be costly.
The Government can create fiscal space through a mix
of additional revenues from new and existing sources.
Potential sources of revenue are imposing value
added taxes, excise taxes, and carbon taxes; charging
platform companies taxes equal to what other
companies are paying; and revisiting energy subsidies.