How businesses in Southeast Asia are closing the tech skills gap

A closer look at what countries in Southeast Asia are doing to overcome the critical talent deficit they’re set to face over the next decade

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The technology industry is experiencing a crisis. Experts predict that in the technology sector alone, there will be a global skills deficit of 4.3 million workers by 2030.

Just like the rest of the world, Southeast Asia is not immune to this problem, with an anticipated employee shortfall of between 600,000 and 1.2 million over the next 12 years.

Across the world, tech companies are waking up to this realisation, putting time and money into a whole plethora of initiatives designed to help encourage more people to pursue careers in the technology sector and improve the retention rates of those they already employ.

Throughout the ASEAN region, countries are following suit, hoping to capitalise on the thriving tech landscape this emerging economy has on offer.

In a part of the world that has so far raised four unicorns in 2018, it’s never been more important to continue fostering the talent on offer from the largely young populations, 43% of Indonesians are under the age of 25, and help reduce the impact of the inevitable skills deficit.

What are the biggest talent challenges facing Southeast Asia?

The five biggest countries that make up the ASEAN bloc, Singapore, Malaysia, Thailand, Indonesia and the Philippines, have a combined GDP bigger than India, making the potential for future growth is immense.

However, whilst the Association of Southeast Asian Nations was set up to foster greater collaboration, each country is unique which means each country has different workplace characteristics which require differing skills sets.

One of the biggest challenges facing the region with regards to the skills gap is the future impact of disruptive technologies.

Low-skilled jobs and less traditionally technical industries like tourism dominate the working landscape in these countries, meaning that as automation becomes smarter and more efficient, these will be some of the first jobs to go.

Furthermore, Indonesia and the Philippines already have high youth unemployment levels, 18.3% and 14.4% respectively.

This perceived lack of prospects, combined with the impulsive behaviour that young people can sometimes be prone to exhibiting, has led to many Southeast Asian countries experiencing an exodus of youth and potential future talent to other continents across the globe. 

Consequently, governments in the region are now under huge pressure to ensure their citizens that do stay put are properly equipped to work the jobs of the future.

The first, and arguably the most important hurdle, that needs to be overcome is the weaknesses in current STEM education systems.

Indonesia expects a shortfall of 9 million skilled and semi-skilled IT workers by 2030. Only 10% of IT graduates in Malaysia don’t require additional training before they are work-ready.

The Philippines only have enough IT graduates to fill 25% of their available IT job vacancies while a meagre 0.8% of Singapore’s ICT workers are considered IT security specialists.

Each year in Thailand, 90% of IT graduates fail to pass the basic qualifications required by potential employers.

Currently, Southeast Asian countries are reliant on outsourcing to fill the significant skilled labour gaps in their workforce.

However, in the long-term this model is unsustainable; entrepreneurs looking to benefit from the potential that the region has to offer will have no qualms about setting up base elsewhere when they realise the countries don’t have the necessary skilled workers to help grow their business.

What can countries in the bloc do to close the skills gap?

Talks have already taken place this year amongst high profile business leaders from the region about the best ways to tackle this growing issue.

Back in May, representatives from the ASEAN-5 countries held a roundtable discussion in Malaysia, raising points of order such as the lack of shortage of Singaporean students enrolled on engineering and cybersecurity courses and what the Philippines can do to improve the amount of science and technology graduates with industry-ready skills.

Noting the inevitability of global fight for talent, one of the key proposals put forward was the need for competitive salaries within these struggling sectors.

Those from Southeast Asia who are in the small minority of graduates leaving education with the necessary workforce qualifications are unlikely to remain in the region if their talents can earn them more money elsewhere.

This built on talks that took place back in 2017, where cooperation for the Technical and Vocational Education and Training programme was pushed through.

This was an extension of the four-year Work Plan on Education initiative that was adopted by all 10 ASEAN member states at a conference in Indonesian a year earlier.

Furthermore, the emergence of Industry 4.0 is providing the region with the much-needed excuse to implement initiatives that focus specifically on reskilling and upskilling the existing workforce to ensure they have the required talent when Industry 4.0 reaches its maturity.

While a region-wide approach is likely to have the biggest impact on the skills gap. Individual countries and organisations have also implemented their own programmes to try and stay one step ahead of the deficit.

Last year in Singapore, the National Trades Union Congress’ U Family unit has launched a pilot returners programme, offering support to those looking to re-join the workforce after a career break.

The scheme aims to match economically inactive professionals, managers, executives and technicians with companies that can offer them paid work for a trial period.

The ultimate goal is that these trial roles turn into permanent positions, allowing employers to take full advantage of this untapped pool of talent to close the internal skills gap an organisation might be experiencing.

Although progress is certainly being made, there’s still a long way to go before Southeast Asia can be confident that they’ll be able to minimise the skills deficit to manageable levels.

In the meantime, cross-country cooperation and the continued adoption of industry-led programmes are a must to ensure the region is able to enact both meaningful and long-term changes.