THE shift to Industry 5.0 could lead to job losses if workers are not retooled and reskilled, the Asian Development Bank (ADB) has warned.
In a special supplement titled, “Capturing the Digital Economy: A proposed measurement framework and its applications,” experts also said shifting to Industry 5.0 from Industry 4.0, however, would still lead to increased consumption and job opportunities if workers are able to adapt.
“Data suggest that, while effects of technology improvements observably reduce labor demand as a result of substitution, positive job impacts coming from consumption and new labor requirements may compensate,” the ADB said.
Efforts to reskill and retool workers are important given the rise of the digital economy. During the pandemic, ADB said the digital economy, particularly electronic commerce, surged.
In some digitally dependent countries, the digital economy accounted for 17 to 35 percent of their GDP. These economies included Southeast Asian countries Thailand, Indonesia, and Malaysia as well as other Asian countries like India, Japan, Korea, and China.
However, the pandemic was able to fast-track the growth of the digital economy in other countries like the Philippines.
Quoting the results of a survey by Bain & Company, Google, and Temasek in 2020, ADB said the average Internet use in the Philippines increased to 5.2 hours per day during the pandemic from the pre-pandemic baseline of 4 hours.
It also noted the growth of digital communication platforms which experienced exponential growth in traffic and subscription during the pandemic.
ADB said Zoom Video Communications Inc. reported an estimated 467,100 paying customers at the end of the fourth quarter of 2020, increasing by 470 percent year-on-year.
Further, the report said Microsoft Teams’ daily active users jumped to 115 million in October 2020 from 20 million users in November 2019.
The report also noted that based on the 2020 financial reports, revenues of Zoom increased 325.8 percent; Netflix 24 percent; Facebook, 21.6 percent; and Microsoft, 13.6 percent.
“Large firms that operate videoconferencing, business processes, social media, streaming, e-commerce, delivery, and other digital services platforms have recorded revenue growth during the pandemic,” the Manila-based multilateral development bank said.
However, efforts to better measure the digital economy are also crucial. ADB said a consensus must be reached in terms of establishing a framework to estimate the digital economy.
The report proposed a definition of the core digital economy and an input-output analytical framework to measure it.
Applying this framework to selected economies and years, it finds that the digital economy and digitally dependent industries contribute a significant portion of gross domestic product.
The report also examined key digital economy phenomena and trends in relation to sectoral links, temporal price changes, jobs, global value chains, the Covid-19 pandemic, and Industry 4.0.