By Jason Gagnon, Development economist and Catherine Gagnon, Intern, OECD Development Centre
A dramatic change in the way our economies and societies interact, produce and communicate is underway as a fusion of technologies blurs the lines between the physical, digital, and biological spheres. And with our economies more globally interlinked today than ever, this industrial revolution extends to practically every corner of the world. Meanwhile another sweeping trend is gaining traction: international migration is at an all-time high as new host countries, routes and freshly skilled workers multiply, and as a young population eager to make a mark on the world continues to grow.
The two megatrends of technology and international migration have the potential to significantly change globalisation as we know it. The Gulf countries offer an illustration of the especially pronounced interaction between both trends. On one hand, Gulf Cooperation Council (GCC) countries have made it a priority to usher in this new economic era. On the other, GCC countries are some of the world’s most dependent countries on migrant labour. How can GCC countries ensure a smooth labour market transition as they shift to this new economic model? And how can the primary migrant countries of origin to the GCC – mostly in South and Southeast Asia – navigate the changes they will face in the main destinations for their labour migrants?
An opportunity and its risky fallout
New technologies have provided GCC countries with the opportunity to strengthen their efforts to diversify and reduce their dependence on oil. In fact, all six GCC member states have developed long-term strategies that aim at further developing their capital and technology-intensive industries, transforming and expanding major sectors such as finance, telecommunications and tourism. The COVID-19 pandemic has further strengthened this resolve.
At the same time, a substantial number of migrants from South and Southeast Asia are highly dependent on the current versions of GCC economies, for jobs, income and stability. They remit the millions of USD they earn every year to their countries of origin, ranging from an equivalent of 3% in India to 24% of GDP in Nepal. A significant drop in the demand or a shift in the type of migration can mean a disruption of the positive links between migration and development for these countries. The silver lining: to usher in the projected technological change, GCC economies will need labour of all types, and likely from beyond the GCC area. Asian countries of origin must seize this opportunity by leveraging their knowledge and networks in the region or they run the risk of losing out to other emerging regions in the global race for talent.
Adapting to the changes: are sending countries ready?
Most Asian sending countries are not entirely ready for the change however. Agriculture remains the primary source of employment in many Asian countries, with high rates of lower skilled labour, and significant amounts of people without any formal type of education. Science, Technology, Engineering, and Mathematics (STEM) education is not popular amongst students. But there are signs of positive change in the region:
- Educational trends are going in the right direction, including at the university level, as enrolment rates in tertiary education have increased since 2000. Indonesia, the Philippines, India and Viet Nam have relatively higher and increasing university graduation rates. The share of people graduating from STEM-related programmes has also slowly increased: 11 % in Bangladesh, 23% in Viet Nam, 32% in India, 19% in Indonesia and 29% in the Philippines.
- National strategies are in place to ensure that ICT and STEM skill transmission is prioritised among the new generation of workers. Recent strategies in India, Indonesia, the Philippines and Viet Nam aim at adopting advanced technologies in industrial sectors, and such efforts have accelerated since the COVID-19 pandemic began.
- Employers, both in sending and hosting countries, are increasingly embracing life-long learning.
A long list of questions: will countries answer?
The change in regional ecosystems raises and will likely continue to raise a number of fundamental questions for all actors, on both sides.
For instance, what skills will be in demand in the future? The most in demand sectors will be those involving advanced logistics, high-speed internet connectivity, sophisticated infrastructure and highly specialised tasks. The loss of routine jobs will likely be offset by the creation of jobs requiring more complex tasks. The most in demand skills are slated to be more technology-related, in the STEM and ICT fields, but also much more focused on soft skills. These include languages, analytical and critical thinking, the ability to learn and solve problems, flexibility, communication, creative thinking, teamwork and leadership; abilities that are inherently hard to define and transmit. They are essential, however, as soft skills provide human workers with a comparative and complementary advantage over technology.
How can sending countries prepare for the imminent change? The pressure on people in South and Southeast Asian countries to find jobs abroad will not abate in the short-term. Adapting to the future demand in skills will mean changing the type of skills taught in these countries but also the ways they are transmitted throughout the entire education system, both for domestic and international needs. This also includes re-tooling migrant pre-departure orientation programmes to ensure their relevance in the context of increasing use of new technologies.
Ensuring all sides benefit from the transition
Navigating major disruptions brought on by megatrends and ensuring no one is left behind is precisely the reason multilateral organisations exist. Regional consultative processes on migration, such as the Abu Dhabi Dialogue in Asia, play a crucial role in fostering dialogue and partnerships between countries, particularly on the issues of credential certification, skills development, and collaboration between educational institutions and employers.
Regional consultative processes can facilitate the transition to a dramatically different future of work and labour migration through five policy areas:
1. Implementing migration mechanisms that ensure that employers in countries of destination recognise existing migrant education and skills credentials.
2. Mapping skills development programmes in countries of origin and harmonising them with labour demand in countries of destination.
3. Creating skills partnerships – bilateral labour migration agreements through which people are trained in the country of origin and provided the choice between migrating and finding a job locally – to fill labour shortages in both countries of origin and of destination.
4. Spurring dialogue between educational institutions and employers at the national level to ensure coherence in the supply and demand for skills.
5. By ensuring and encouraging data-sharing across member states for joint evidence-based planning.
Several concrete examples developed over recent years offer a pathway on which to continue building, such as Enabel’s PALIM mobility partnership, or the skills mapping programmes being setup for India’s corridors with both the UAE and Saudi Arabia. But each corridor has its own specificities, cultures, expectations and ultimately uniqueness. And while principles may be distilled from the growing body of good practices across the world, an organic and genuine process is necessary to build a sustainable regional dialogue on migration.
Development strategies are increasingly accounting for the change in global industrial processes, but few account for its impact on global labour mobility. As development strategies adjust to these changes, they must also account for the new skills demand they entail, and in turn the impact this has on labour migration, translating into concrete policy action in both countries of origin and destination.