The 4th Industrial Revolution; A Progressive Response
In simple terms, this means that work that used to require lots of humans, will now be replaced with Robots; at productivity, accuracy and consistency unachievable by humans. In short, better and faster economic growth and production can now occur without creating jobs for people, as long as someone can afford to buy a machine/robot. This is the digital revolution or the 4th Industrial revolution. There are two perspectives that dominates the discourse on this prospective zeitgeist, namely the capital industrialist factory owner seeking to boost productivity and maximise profitability on the right; and on the left, the imminently displaced factory worker who is the breadwinner of a family who will have been muscled out of the workforce by robots and computers. The current social norms in Malaysia would find that the factory owner’s perspectives as reasonable; and the workers’ perspective as a case of tough luck. Some would even place the factory owners’ perspective morally higher than the workers’. This is what this piece seeks to explore and debate. The Macro view In Malaysia, robots have already started to replace human workers on the shop floors. Toll booths on the PLUS highways going fully automated being one example, and Ipads on restaurant tables replacing waiters and servers are among the thousands of examples we can see and experience today. With every Dollar, Euro or RenMinBi of Foreign Direct Investment, their number will rise. But digital automation is not limited to manufacturing. The ILO estimates that robots have the potential to automate 49% of jobs across all economic sectors. As an upper middle income country, Malaysia will be amongst the first in the region to feel the full impact of automation. However, it is not so much the number of robots in Malaysia which give reasons to worry. It is digital automation in the old industrial countries. If robots erode the comparative advantage of cheap labour, other factors (eg shipping times, skilled workforce, quality, corruption etc) will weigh heavier in investors’ mind. The export and manufacturing led development model will soon cease to work. Case in point is how Trump’s protectionistic policies have caused offshoring industrial capitalists to move their factories back. The age old paradigm and fiscal structures of cheap foreign labour being the most cost effective is no longer applicable as automation on US soil is the next cheapest option. As for Malaysia, the model of being the ‘sweatshop’ for multinational manufacturers seeking cheap Malaysian labour, or as the ‘slave market’ for both illegally and legally exploited non-Malaysian unskilled migrant workers is suddenly no longer in demand. This was previously the only ‘ladder’ Malaysia had in moving up the global value chain; which has been abruptly kicked away. Malaysia, especially if tempted to keep wages artificially low through migrant workers, would end up in the Middle Income Trap- a phenomenon we are already too familiar with. When multinational corporations pull their investment and technology, and the need for physical labour is greatly reduced, what is then left for Malaysians? Malaysia's market is too small to keep MNCs in or fuel domestic consumption. Having failed to develop our own brands and technology, and bereft of the cheap labour advantage, domestic Malaysian enterprises will find it difficult to compete. The BN government is blind to the greatest danger Malaysia has faced in decades. Occupied with their petty political maneuvering to secure their vested interests, they gamble away the future of common Malaysians. Bold action is needed to secure Malaysia’s future. The Micro Challenge Young Malaysians are finding it increasingly difficult to find work. Many among those employed find themselves working ‘dead end jobs’ with little to no prospects of fulfilment; neither their childhood ambitions nor their urgent needs for financial stability and security for now and future are likely to be fulfilled. Many from places like Ipoh, Malacca, Kota Bharu and Alor Setar face the quandary of mismatch between rising cost of living versus a stagnant income. Some choose to move to the big cities in hope of that illusive opportunity of a ‘golden break’. Many of them find themselves trapped in the rat-race of higher pay than what they would get back home when they seek pastures greener in Kuala Lumpur but hit with a proportionately higher cost of living. Longer working hours and higher costs, heavier burden of financial commitments and in a more cut-throat competitive environment are but some of the many many factors contributing towards the increasingly higher rate of depression and mental illness among young people. When capital increasingly replaces labour- or machines replace workers, major challenges will arise. First, if a rising number of people finds it harder and harder to make a living, social unrest and political instability are the likely consequence. Second, if the flow of income into the pockets of wage earners is disrupted, the economy will face a consumption demand problem. Even more will get more severely affected psychologically and psychiatrically. This is before mentioning the disruptive and destructive introduction of the GST, which was brought in to do nothing more than to save the current regime’s own skin from it’s own disastrous fiscal management. To tackle these challenges, we need to build a “Human economy”. The human economy puts human livelihoods front and centre. Building the Human Economy has two elements: preparing the workforce for the digital economy, and creating livelihoods out of all tasks which benefit the common good. Decent work, decent pay for decent life in the digital age The human economy does not reject, but fully embrace the tremendous technological possibilities offered by the digital revolution. In the world of work, for instance, the automation of dirty, dangerous, physically demanding and cognitively stupefying tasks is set to increase workplace safety and satisfaction. Working together with Artificial Intelligence, robots, and algorithms, however, requires a new set of skills. Enhancing the qualifications and skills of the workforce will create decent work for human employees. This in turn allows for a new generation of digital entrepreneurs to emerge. Whilst the digital age dawns on us, roti canai and bread are still staples, and pipes, taps, and cars are still going to continue malfunctioning and require repair. A renaissance of vocational professions, with re-instilled pride and added value – both in quality and compensation- must be put to the top and forefront of the workforce reform agenda. For too long, Malaysians have viewed carpenters, plumbers, mechanics, chefs etc as socially less desirable work. It could well be intentional social engineering to suppress wages of those highly skilled workers by the clientelistic elites, or simply a stagnating and conservative social paradigm that simply put too much emphasis on academically based professions. Whatever the cause, it is translated into a contemporary social order of youngsters not wanting to enter those professions, both because the pay is indecent and there being no pride, prestige nor honour on offer in those professions. With this void of vocational workers, there appears to be a golden opportunity to create jobs in the provision of training to established vocational experts to become trainers of a new generation of apprentices, with a new progressive, value-added mindset and pride instilled. More importantly, we must pair decent work, with decent pay, so for workers to have a decent life. This can and must be a joint priority agenda between policy and law makers, as well as leaders of the said vocations in ensuring the consumers are equal gainers along with practitioners of their vocation. The question of where is the money to finance this going to come from is nothing but a trojan horse by those who wants to preserve the status quo. Instead of investing hundreds of billions on foreign labour built buildings and concrete jungles and participating in the speculative property trading game, government should employ those resources in investing in people; Malaysian people. Remunerate activities which benefit the common good. At the heart of the human economy are the hopes and needs of humans. Humans perform many tasks which are beneficial for society. Many of these tasks, however, do not generate enough income in the capitalist economy. In order to create decent livelihoods, our incentive and remuneration systems need to be overhauled. Among thousands of challenges and opportunities at hand, the “care economy” is an opening for a paradigm shift. By 2030, the population age trajectory suggests that 15% or more of Malaysians will be over 65 years old. 5.5 million of Malaysian will be 65 years or older and that's a good thing, although there are economical and social challenges that we must face together. With people living longer yet more diseases becoming more common and prevalent, common sense dictates that the need for care or living assistance for the elderly and/or sick will also increase. Apart from the inherently Asian family values of care and respect for our elders being upheld, it is our responsibility as a people, and also DAP’s political conviction to makes sure that our parents and grandparents are provided the deserved care during their golden years. All that said, a progressive solution to this must ensure the children are not hampered and constrained from achieving their full potential due to the absence of institutional provision of care for the elderly. Ageing population is national and governmental question, and this requires an institutional, national and governmental answer. The human economy is one that addresses this in a progressive way. The common societal good of caring for the elderly does not only provide the workforce with decent work at decent pay and an opportunity to provide care and dignity to the elderly, it is also an institutional floodgate that prevents ‘opportunity and developmental costs’ in disrupted careers, working opportunities for those whose aging family members find themselves needing care. It is both an progressive and defensive fiscal instrument in the Human economy. Creating the human economy means to put humans front and centre. Humans excel at communication and social interaction, creativity and innovation, experience and judgement, leadership and foresight, flexibility and learning. Providing full capabilities to fully exploit these human talents is the industrial policy of the human economy. Building the workforce for the digital economy requires major investment in education, infrastructure and health services. Not just shift in policies, but in paradigm No policy and/or phenomena can have it’s merits or moral value determined in a vacuum; a new economic model needs to and will hopefully overhaul the status quo definition of “progress”. The age old utilitarian and neoliberal paradigm of “what creates the most GDP growth is the best” is no longer –arguably never was- valid. For example, GST in a high income, low poverty, post industrialisation economy is progressive. In Malaysia however, it is regressive. Automation itself is an innovation that disrupts the current paradigm; that itself has no moral implications. The moral implications comes with effects it would bring under the current economic paradigm. Automation that leads to grotesque accumulation of wealth by an elite capital class can no longer be considered progress by default; how can something that will destroy the livelihood of billions of ‘ordinary have-nots’ and grossly benefit a very small group of ‘silver spoon elites’ be considered progress? The jobless growth that is going to hit our world through Industry 4.0 will see a massive upshoot of productivity growth in a very immediate short term, creating massive profitability for lots of industrial capitalists. But ultimately, the 99.9% of the rest of the world- the workers now muscled out of the labour market by robots and artificial intelligence are going to feel the pain very quickly. Before we know it, the industrial capitalists and their robots will be making products that no one can afford to buy. Unless an alternative economic model with new new incentive, remuneration and recognition system, and a new paradigm in consumption demand is superimposed on top of the current to complement it, disaster is in the making. Political unrest will be the least of everyone’s worries. We need to boost consumption demand; there’s no better way of doing that than creating decent livelihoods among all Malaysians. Ultimately, the vision and hope that DAP strives to bring, is a tomorrow where the workers’ perspective of the 4th industrial revolution, is morally higher- proudly and unapologetically, no less- than the one of the factory owners’. It is also an economy where the factory owner still gets to play a significant part, but the workers get a fair deal, better deal, a New Deal.
We - the DAP - are here building and fighting for that New Deal, that better tomorrow that works for every Malaysian. For that to realise, we first need to remove those who are gambling our future away, from continuing to hold the reins of power. For that, we need you to join us.
