Friday, 2 March 2018

The resilience of humanity in evolving economies

The continent of Europe is home to the world’s leading countries with the highest automation adoption rate. Among them, Germany ranks the highest in terms of robot density, according to a 2016 report by the International Federation of Robotics.
Numerous articles and reports around the world, this column included, have pointed to the rapid transition in automation, particularly within the manufacturing sector.
Globally, the automotive industry is the frontrunner in the automation of processes due to high labour costs and skills requirements, particularly in precise, repetitive and hazardous processes such as welding, painting and in-process logistics.
The natural concern is the displacement of unskilled labour whom have been replaced by such efficient competition.
Technological unemployment is something that has occurred throughout modern history, with several case studies dating back to Britain’s industrial revolution.
For example, the introduction of mechanised looms caused disruption to jobs within textile business and left many skilled weavers out of work. This, however, opened up opportunities for unskilled labour that were in demand within the newly expanded textile industry.
While it is undisputable that technological disruptions will cause short term displacement to certain jobs, the example above demonstrates the opportunities that arise can be far greater.
The ultimate end goal of any human activity is the satisfaction of human needs. While disruptions are a natural occurrence, they do not occur to remove humanity out of human activity.
Although conventional perceptions tend to forecast loss of employment due to the replacement of jobs through automation, Germany still has the largest pool of labour within the European Union. Its education system boasts about 1.3 million apprentices from its globally renowned vocational training system.
Germany also had one of the lowest unemployment rates in the EU at 3.6 percent in last year.
A recent benchmark study by the Malaysian government analysed the structure of the German industrial infrastructure.
Overall, the German industry ecosystem maintains stronger emphasis on the tripartite relationship between industry, academia and government – each communicating clearly and cohesively on achieving industrial milestones and innovation goals.
There is a clear and distinct realisation of each other’s goals and internal interests – be it research, profit or public interest.
Significant efforts focus on ensuring automation does not cause disruptive pressure on the German workforce as well as small and medium enterprises – the backbone of any economy.
The government focuses on developing research & development capabilities, through quality education programmes in both academic and skill routes.
The private sector plays a major role in ensuring quality human capital development to ensure real-time industry exposure supplements the theoretical knowledge within their respective learning institutions.
The German framework in developing the industrial ecosystem is very similar to the setup we have here in Malaysia.
If there is one thing we can learn from the Germans, it would be their passion for innovation and the technology driven economy. Most importantly, we must improve on our abilities to effectively disseminate knowledge and information of the opportunities that lie ahead in Industry 4.0.
As we approach the new era of mobility, let us work towards an innovative and globally competitive economy – a good start would be learning from the successes (and failures) of those ahead of us.
The writer is the chief executive officer of Malaysia Automotive Institute.

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