ASSIST STUDENTS IN ACCESSING LABOR MARKET IN INDUSTRY 4 0 Tran Thi Phuong Hien, PhD National Economics University Abstract Industry 4 0 (4th Generation Industrial Revolution) is the digital transforma[.]
ASSIST STUDENTS IN ACCESSING LABOR MARKET IN INDUSTRY 4.0 Tran Thi Phuong Hien, PhD National Economics University Abstract Industry 4.0 transformation of (4th Generation industrial Industrial markets (industrial Revolution) is the digital transformation) with smart manufacturing currently on the forefront It is also a term appears much in the mass media as well as in our daily life In Vietnam, in terms of perception, we have accessed rapidly to industry 4.0 with a whole series of discussions and research This revolution is expected to bring great benefits to human life However, for the nation based mainly on resource extraction and cheap labor such as Vietnam, its impact at the early stage is evaluated to be negative Manual labor in textile, assembly industry and traditional agriculture will be affected greatly According to the International Labor Organization (ILO) report in July 2016, 70-75% of simple and manual jobs in these sectors may be replaced, tens of millions of traditional workers may lose their jobs; new energy or materials will greatly affect the exploitation and use of resources Not being out of the reach of industry 4.0 affection, higher education and students’ access to the labor market have many opportunities and challenges This article focuses on identifying the effects of industry 4.0 on employment as well as on student labor market access at the side of universities’ support Keywords: Industry 4.0, student support, employment, access to labor market 1.1 Basics of Industry 4.0 In 2011, the Association of German Engineers launched a highly integrated project labeled “INDUSTRIE 4.0” to develop and market a wide suite of 572 technologies to affect change in Germany’s manufacturing sector and improve its production competitiveness Then, Klaus Schwab, the CEO of the World Economic Forum, defines the Fourth Industrial Revolution as "A range of new technologies that are fusing the physical, digital and biological worlds, impacting all disciplines, economies, and industries" (Schwab, 2016) According to Schwab, the combination of internet, automation and human interactions will change the idea of factories, operations and society (Schwab, 2016) Accordingly, industry 4.0 is flourishing from the third revolution, which combines technologies together, blurring the boundaries between physics, digital and biological It takes place on three main areas: Biotechnology, Digital and Physics The core elements of industry 4.0 are artificial intelligence (AI), internet of things (IoT) and big Data In the field of biotechnology, industry 4.0 focuses on research to create leaps in agriculture, fisheries, medicine, food processing, environmental protection, renewable energy as well as the field of physics with new generation robots, 3D printers, selfdriving vehicles, new materials (graphene, skyrmions ) and nanotechnology Industry 4.0 is taking place in developed countries such as USA, Europe, parts of Asia Besides the new opportunities, it also poses many challenges for humanity This revolution has the power to connect billions of people to the web, improve the efficiency of business and organizations, help to regenerate the natural environment through asset management and reduce the damage caused from the previous industrial revolutions (Schwab, 2016) Professor Erik Brynjolfsson, from the Massachusetts Institute of Technology (MIT), this revolution is all about connecting hardware like computers or 3D printers, software components, such as artificial intelligence or cloud computing, and humans at the level of interactions never done before (Erik Brynjolfsson, 2016) In his book “The Second Machine Age” the professor explains that digital devices are more useful and unpredictable that steam or automated machines (Erik Brynjolfsson, 2016) Moreover, while the last three industrial revolutions had a linear technological development, the fourth one is rather exponential, and 573 this characteristic relies on the fact that our new society is fully interconnected and information take few hours to spread around the globe Basically, industry 4.0 is inherited and promoted from the previous three industrial revolutions In particular, computer interference with new level has transformed every technology faster Fast changes in physical (e.g., intelligent robots, autonomous drones, driverless cars, 3D printing, and smart sensors), digital (e.g., the internet of things, services, data and even people) and biological (e.g., synthetic biology, individual genetic make-up, and bio-printing) technologies, and generally in the way we work, we learn, and we live, make it a crucial force for economic competitiveness and social development Industry 4.0 has been affecting different fields of life such as: technology, strategy, workforce and society ( Deloitte Global’s survey, 2017), lean production system ( Tobias Wagner et al., 2017), Procurement and Supply (Andreas H Glas, 2016), employment (Joseph Flynn, 2017), higher education (Thai et al., 2017)… With these extensive effects of 4.0 on every aspect of human life, we can imagine future changes on the 4.0 platform as follows: Based on analyzing all the data about you, artificial intelligence will create many artworks for you to enjoy such as making a movie without actors, making a comedy as your own way; Automatic vending machines will sell anything even a delicious dish can be also automatically made; Bank transactions are automated to the extent that one can borrow based on his history and profile; IOT will replace the farmer while he just stays at home and connect the irrigation system He can also know the humidity in the soil and in the air to have proper irrigation schedules He can even control the plow, the reaper without going to work… As a consequence, many different professions in the economy will be decreased or disappeared like: chefs, waitresses, credit officers and even farmers Industry 4.0 brings a vision that people may be less directly interacting with each other, the interaction between people and machines will be more popular Things will happen regularly through the phone, computer or technical means 574 1.2 The impact of industry 4.0 on employment and labor market Decades ago, renowned economists John Maynard Keynes and Wassily Leontief foretold a time when artificial intelligence would produce “technological unemployment.” In their view, labor would become less important and workers would be replaced by machines Science fiction writers often capitalize on plots where robots take over tasks traditionally performed by humans According to Daron Acemoglu and Pascual Restrepo, 2017, the use of industrial robots may reduce employment and wages in the U.S economy The authors acknowledge that because relatively few robots currently exist, robots have caused the loss of number of jobs As the use of robots is anticipated to spread, however, future employment and wages would likely be affected This study is viewed by the authors as a first step in evaluating how robots influence labor market equilibriums The research concludes by stating that if the spread of robots continues, there could be sizable future declines in the employment–population ratio Frey & Osborne (2013) estimated that about 47% of US employment is at risk in the next 10 to 20 years In the UK, about 35% (Frey & Osborne, 2016) of jobs are at risk and in Finland 36% (Pajarinen & Rouvinen, 2014) In many developing countries the share of employment at high-risk of automatisation issubstantially higher In India, 69% of employment could be automatised, in China 77% and in Ethiopia 85% (Frey & Osborne, 2016) When the same methodology is applied to OECD members, the average share of employment at risk due to digitalization is about 57% The differences between countries are explained by the progress that has already been made as well as to what extent jobs depend on face-to-face interaction (Arntz et al., 2016) Based on demonstrated technologies many activities can be automated, but in most cases this does not make the jobs disappear entirely (Autor & Handel, 2013) For example, in OECD countries, Arntz et al (2016) estimated that in only 9% of jobs could more than 70% of the activities be automated McKinsey Global Institute estimates show that the activities of only about 1% of jobs could be automated entirely based on demonstrated technologies, while a large share of activities of many more jobs could be automatized At least 30% of the activities 575 of 60% of the jobs are automatable In the five largest EU economies7 automatable activities represent the equivalent of about 62 million full-time jobs or €1.75 trillion in annual wages Automation will expose jobs such as office and administrative support as well as transportation and logistics (Frey & Osborne, 2016) In turn, there are also cognitive non-routine activities that can be automated For example, diagnosis of chronic disease and cancer treatments have been partially automated using data analytics on vast numbers of medical records for benchmarking and recognition of patterns (Cohn, 2013) There remain, nevertheless, plenty of activities that are very difficult to automate In these activities originality and social skills play an important role (management, business, arts, media, education, healthcare, etc.) Owing to education levels, existing disadvantages of some workers are likely to be reinforced through automation More specifically, workers with a lower level of education have the highest chance of seeing their activities being automated OECD (2016) indicates that about 40% of lower educated workers face a high risk that their job will be automated, while only 5% of workers with a tertiary degree face the same risk (Berger & Frey, 2016; Arntz, Gregory & Zierahn, 2016) During the transition to industry 4.0, the change in production structure will surely have consequences With regard to the working and professional world, work will become more challenging and have more informal qualification requirements such as the ability to act independently, self - organizing, abstract thinking - skills (Forschungsunion & acatech 2013) There will particularly be less need for simple, repetitive tasks and special knowledge applied Start - up companies utilizing the potentials digitization are able to manufacture more flexible and individualized products, will form and occupy new market They in particular require their specialists to hold special professional skills, which must be accompanied by expertise in dealing with digital media and networks, as well as distinctive soft skills in communication and especially in teamwork Expertise in problem solving, which is coordinated within the processes among the team but also implemented independently, is vital for the companies New skills or activities which would result in new job descriptions, are not expected In fact, 576 the previous occupations are sufficiently established However, it is emphasized require even greater and virtually end-to-end IT skills are required Although the requirements placed on employees are increasing, particularly in the development phase of new processes and products, this can only result in a short-term shift towards requiring academic degrees This shift would settle down again during the implementation phase since more people with training qualifications would then be in demand again In Vietnam, industry 4.0 will cause labor market changes in the structure of labor, labor levels and the requirements of different skills In particular, workers have to adapt to new jobs and avoid being eliminated In addition, the industrial revolution 4.0 also affects the training and retraining sector Vietnam will gradually change traditional training methods to flexible ones, focusing on skills training, retraining and short-term training associated with lifelong learning The training should be based on the technology platform (Le Quan, 2018, Deputy Minister of Labor, Invalids and Social Affairs) The 2017 report of the ILO "ASEAN in transformation: How technology is changing jobs” indicates most of the work made in the field of production, especially textiles, trousers clothing and footwear and electronics and equipment industry electricity will be affected by industry 4.0 Although high technology not fully penetrated the industry, there are also signs that the appearance of the high technology in some industries Industry 4.0 could create the risk of breaking the labor market in the world and in Vietnam When automation replaces humans, labor may be redundant while safe jobs with higher incomes may increase The low-level labor must constantly improve to upgrade their skills and be more productive even better than the automatic production lines Students – high level labors must also constantly learn, improve and creative In industry 4.0, repeated universal jobs tend to be replaced entirely by machines while the demand for highly skilled labor with creative thinking, performing complicated tasks and mastering machines tends to be increased This will be job opportunities for students in the future 577 Thus, for developing countries such as Vietnam, industry 4.0 poses many challenges: lagging behind, losing low cost advantage, many industrial fields are automatically, requirements for the labor skill will be higher The technology and knowledge gap will be greater leading to a deeper social division Many new jobs are born with new working method If students not improve their skills to adapt quickly to these changes, they will be excluded from the labor market The following are some of the typical effects of industry 4.0 on employment and the access to the labor market: ¾ Setting new requirements for students The basic feature of industry 4.0 is the integration of technology, digital and biotechnology to address the social and economic issues and the combination of virtual and real systems through internet connection It will also set new requirements on knowledge, skills and the mind of the students These knowledge and skill are divided into groups: - The knowledge and skills related to cognitive, system thinking, critical thinking, adaptive skills, creative thinking - Physical skills: language skills, digital skills, communication skills - Social skills: communication, behavior, relationships, teamwork Hecklau et al., 2016 said it is possible to aggregate and categorize competencies into four main groups – Technical, Methodological, Social and Personal competencies Requirements for the qualifications and skills of employees will be higher than at present, because the companies will use new technologies and smart media In particular, the application of skills, knowledge and the mind to innovate is more important than previous knowledge and skills According to the 2017 report of ILO “Asean in transformation - how technology is changing jobs and enterprises”, there will be most important skills related to technical, teamwork and communications, innovation, creativity knowledge So it requires students to be matured in their professional, comprehensive skills and positive 578 working attitude Among the requirements, foreign language skill and the ability to apply scientific and technological advances into practice are skills need to be cultivated most These are both an opportunity and a challenge for the generation of 4.0 Vietnamese students Because Vietnam has been considering as a country with a strong foreign language learning movement and also be a developing country have strong scientific and technological applications despite the fact Vietnamese are weak in foreign languages and the ability to apply technology in general ¾ Making a strong change in the structure of labor and labor market According to the study by Wolter et al (2015), industry 4.0 is neither a “job producer” nor an “employment destroyer” The scenarios estimate an overall loss of 60,000 jobs through digitalization In different occupational and economic sectors 490,000 jobs will be lost, while in other sectors and occupations 430,000 jobs will be newly created until 2025 The already visible structural change favoring employment in services will even be accelerated through industry 4.0 Occupations in areas such as information technology or teaching relying on more creative skills are more likely to become more important, whereas jobs in manufacturing (e.g machine- and facility-controlling and maintenance of machinery) or service administration implying a high level of non-manual routine tasks are more likely to shrink Due to the demographic development and changing educational attitudes the supply of workers with medium skills will probably decrease Vogler-Ludwig et al (2016) suggest that an “Economy 4.0” may probably not cause job destruction on a large scale They expect additional jobs particularly in industries producing digital technologies and digital services (e.g mechanical and electrical engineering) and corresponding occupations Other areas in which job creation may take place are research and development, teaching and business consulting Losses are most likely in sectors such as transport, logistics, and security Automation systems will gradually replace manual labor in many areas The shift from using people to machines will increase the gap between profitability and 579 labor force This will affect the income of simple labor When automation replaces manual labor, millions of workers can be unemployed, especially those working in insurance, real estate brokerage, financial consulting and transportation The high proportion of high-quality labor is rising, resulting in a more and more isolated job market, or creating new employment needs than ever before Owing to education levels, existing disadvantages of some workers are likely to be reinforced through automation More specifically, workers with a lower level of education have the highest chance of seeing their activities being automated OECD (2016) indicates that about 40% of lower educated workers face a high risk that their job will be automated, while only 5% of workers with a tertiary degree face the same risk (Berger&Frey, 2016; Arntz,Gregory&Zierahn, 2016) In terms of gender, age and education, less well educated workers could be particularly exposed to automation, emphasizing the importance of increased investment in lifelong learning and retraining More highly educated workers will typically have greater potential for adaptability to technological changes, as well as to design and supervise AI-based systems Differences are less marked by age group, although some older workers could find it relatively harder to adapt and retrain than the younger This may apply particularly to less welleducated men as we move into our third wave of autonomous automation in areas like driverless cars and other manual labor that has a relatively high proportion of male workers at present But female workers could be relatively harder hit in early waves of automation that apply, for example, to clerical roles (PWC report, 2018, “What jobs first at risk from automation”) A study by Carl Fery and Michael Osborne (2013) predicts about 47 percent of jobs in the United States are at risk of being automated in the next two decades Accordingly, the most automated professions are telemarketers, tax payers, customer care service Some of the less automated professions are psychological counselors, social staffs… 580 According to the Deputy Minister of Labor, Invalids and Social Affairs - Le Quan, the 4.0 revolution will cause labor market changes in the structure of labor, the structure of resources, the structure of labor levels, the requirements of different skills Industry 4.0 directly and indirectly affects occupations in the economy (agriculture, industry and services), as well as groups of workers Revolution 4.0 can also take away many of the current jobs in Vietnam Employment in the energy, manufacturing, service and agricultural sectors will fluctuate sharply during the industry 4.0 Electronics and textiles, which are the strengths of Vietnam and creating jobs in the past few decades, may be at risk of job reduction Advances in automation and digitization that reduce production costs can increase the likelihood that electronics and textiles will return to developed countries to be closer to the market The prospect of job loss can also occur in the agricultural sector because most of the agricultural workers in our country are not still fully mechanized production (VASS, 2017) ¾ Changing the conception of qualifications and occupation in society In industry 4.0 era, there will be no longer so important to one’s qualification awarded, origin or relationship The big concern will be real knowledge, professional level or skill of the individual And this is an opportunity for all People who have real ability, good qualifications, creativity and creating values for the society will be successful In 2017 and beyond, organizations should experiment and implement cognitive tools, focus heavily on retraining people to use these tools, and rethink the role of people as more and more work becomes automated (Angus Knowles-Cutler and Harvey Lewis, 2017) The shift from full-time employees to an augmented workforce (augmented by both technology and crowds) is one of the more challenging of the human capital trends It upends the familiar concepts of what a job is (along with all the implications for careers), what work really means, how the workforce is trained and selected, and how the workplace is designed It stretches conventional notions of what types of work can be done by people and by machines, and it redefines the human workforce segments that are involved (Jeff Schwartz, 2017) The rapid advances in machine 581 ... again during the implementation phase since more people with training qualifications would then be in demand again In Vietnam, industry 4. 0 will cause labor market changes in the structure of labor, ... following are some of the typical effects of industry 4. 0 on employment and the access to the labor market: ¾ Setting new requirements for students The basic feature of industry 4. 0 is the integration... affects the training and retraining sector Vietnam will gradually change traditional training methods to flexible ones, focusing on skills training, retraining and short-term training associated