Medical transcriptionists at risk of losing jobs

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The Asian Development Bank (ADB) warns that technological advances put thousands of jobs in the Philippine business process outsourcing industry (BPO) at risk.

In the Asian Development Outlook (ADO) 2018 report, ADB said even some cognitively oriented but routine jobs may be displaced.

“The business process outsourcing (BPO) industry is a case in point. Industry experts estimate that, in 2016, 47 percent of BPO workers in the Philippines worked at process-driven tasks requiring little abstract thinking. With the advent of new technologies, such jobs are likely to decline as a share of all BPO jobs,” the Manila-based multilateral lender says in the report.

It says while routine jobs may be lost, there will be new opportunities driven by greater demand for more complex BPO services, which can expand along with technologies.

“But they will require more specialized training. Workers employed as medical transcriptionists, for example, may lose their jobs to increasingly sophisticated software able to recognize voice, text and image signals. Transitioning these workers into non-routine cognitive jobs in the BPO industry will require retraining and skills development," it says. 

The Philippines has a 13-percent share in the global BPO market. In 2013, BPO provided 20 percent of Philippine exports, 6 percent of GDP and 4.2 percent of wage employment.

More recent industry estimates from 2016 put IT-BPO revenue at $22.9 billion, equal to 7.5 percent of the gross domestic product (GDP). “With formal job creation low in the Philippines, BPO is an attractive option for young graduates. Clerical support dominates BPO jobs, and education and skills requirements vary across the industry,” it says.

A 2016 labor force survey shows that 62 percent of IT-BPO jobs are clerical support. Nearly 85 percent of call center workers are either college students or high school graduates, while only 13 percent have earned college degrees, the report states.

By contrast, animation BPOs, which require more technical or advanced skills, fill 72 percent of their entry positions with college graduates. Similarly, college graduates fill 68 percent of entry positions in medical transcription and 55 percent in computer-related activities such as software development.

“Service delivery automation, in particular robotic process automation, will transform BPO, affecting job creation. Technologies such as artificial intelligence, big data analytics and cloud computing will alter the type of workers employed, the wages they earn, and the services they deliver to overseas clients,” it says.

ADB notes, however, that even the most pessimistic projections of employment growth show steady increases in IT-BPO job creation in the Philippines.

As industry leaders reported at the IT-Business Process Management Summit in Manila in November 2017, demand from North America, Europe, and Australia will continue to fuel employment growth in the industry, as will demand from within Asia and the Pacific as these economies get richer, it says.

The Information Technology and Business Process Association of the Philippines says the share of lows-killed BPO workers will decline from 47 percent in 2016 to 27 percent in 2022, while medium-skill occupations will increase from 38 percent to 46 percent in 2016, and high-skill occupations from 15 percent to 46 percent.

One of the proposals presented by IT-BPO leaders is a skills-development fund to train IT-BPO workers in new technology and familiarize them with automated service-delivery models.

Industry leaders believe the government should contribute to the fund to provide incentives for firms to upskill and reskill. Further, as most BPO workers are university students or graduates, industry leaders believe that educational streams must better align with industry needs. “Given growth in computer-related BPO, it is imperative that university education in computer and IT-related majors align with industry needs,” ADB says.

ADB says that in Asia, technological advances have transformed the two billion worker Asian labor market, helping create 30 million jobs annually in industry and services over the last 25 years, drive increases in productivity and wages, and reduce poverty.

New research on how technology affects jobs, the subject of the special theme chapter in the Asian Development Outlook (ADO) 2018 report, points out that while some of the region’s jobs will be eliminated through automation, countervailing forces will more than compensate against job losses. “ADB’s latest research shows that, on the whole, countries in Asia will fare well as new technology is introduced into the workplace, improving productivity, lowering production costs, and raising demand,” says ADB chief economist Yasuyuki Sawada.

“To ensure that everyone can benefit from new technologies, policymakers will need to pursue education reforms that promote lifelong learning, maintain labor market flexibility, strengthen social protection systems, and reduce income inequality,” he says.

ADB research shows that even in the face of advances in areas such as robotics and artificial intelligence, there are compelling reasons to be optimistic about the region’s job prospects. New technologies often automate only some tasks of a job, not the whole. Moreover, job automation goes ahead only where it is both technically and economically feasible.

The report acknowledges that advances in areas such as robotics and artificial intelligence pose challenges for workers. Jobs that require repetitive, routine tasks and workers who do not have the education or training to move easily to other occupations, may face slow growth in wages.

“This would exacerbate income inequality in the region. Indeed, the ADB report finds that jobs that are intensive in cognitive tasks, social interactions, and the use of ICT—jobs that tend to be held by the better educated and better paid—expanded 2.6 percentage points faster than total employment annually over the last 10 years. Moreover, average real wages for these jobs increased faster than for routine or manual jobs,” it says.

“Policymakers will have to be proactive if the benefits of new technologies are to be shared widely across workers and society. Governments will need to respond to the risk of workers being left behind by ensuring that they are protected from the downside of new technologies and able to take advantage of new opportunities. This will require coordinated action on skills development, labor regulation, social protection, and income redistribution,” the report states.

 

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