Challenges for vietnam’s human resources on the threshold of the industry 4.0

Nội dung text: Challenges for vietnam’s human resources on the threshold of the industry 4.0

1. CHALLENGES FOR VIETNAM’S HUMAN RESOURCES ON THE THRESHOLD OF THE INDUSTRY 4.0 * Le Thi Mai Anh 1 ABSTRACT: Industry 4.0 which started off as Germany’s brainchild is expected to minimize the labor cost advantages of traditional low-cost locations, making it attractive for manufacturers to bring previously offshored jobs back home. The revolution will require more ‘talented’ workers who can adapt to technology rather than traditional ‘skilled’ workers. Manual workers will face many disadvantages. Although Vietnam has been recognized as a country with abundant labor resources, backed by the young population. However, many big international organizations in the country still find themselves in difficult situation to recruit a sufficient amount of skillful staffs. Therefore, the shortage of quality employees is one of the biggest disadvantages of Vietnam’s human resources market. By using secondary data, the paper sheds light on the challenges of Vietnamese human resources in the context of Industry 4.0. From the results of this research, the author also offers some suggestions to improve the quality of human resources in Vietnam in the industrial revolution. Keywords: Industry 4.0, human resources, workers. 1. INTRODUCTION The fourth Industrial Revolution (Industry 4.0) is an opportunity to fulfill the aspirations for a prosperous country. Like other nations, Vietnam is a late comer so with lessons learned from other nations we can take a short cut. We will be able to utilise opportunities presented to us while bypassing certain stages of development. However, disruptive changes to business models will have a profound impact on the employment landscape over the coming years. Many of the major drivers of transformation currently affecting global industries expected to have a significant impact on jobs, ranging from significant job creation to job displacement, and from heightened labour productivity to widening skills gaps. In many industries and countries, the most in-demand occupations or specialties did not exist 10 or even five years ago, and the pace of change is set to accelerate. In such a rapidly evolving employment landscape, the ability to anticipate and prepare for future skills requirements, job content and the aggregate effect on employment is increasingly critical for governments, businesses, and individuals in order to fully seize the opportunities presented by these trends—and to mitigate undesirable outcomes. Given high dependence on low - skilled workers in Vietnam, re-skilling or up-skilling will be required by the country to make ready for the new requirements. The development of science and technology can lead to mass unemployment, as a large number of Vietnamese labourers will not be able to adapt to new technologies, resulting in a bigger gap between the rich and the poor, and ultimately in potential social conflicts. In the first part, the paper will discuss the human resources in Industry 4.0, and the situationsof Vietnam’s human resources in the period of 2012 – 2017. After that, the paper will provide some suggestions to deal with the challenges for Vietnamese labors. * Department of International finance, Academy of Finance, Number 1, Le Van Hien street, Duc Thang precinct, Bac Tu Liem district, Hanoi, Vietnam. Anh Le Thi Mai Tel.: +84 948648799, E-mail address: maianhtcqt@gmail.com
2. 634 HỘI THẢO KHOA HỌC QUỐC TẾ KHỞI NGHIỆP ĐỔI MỚI SÁNG TẠO QUỐC GIA 2. METHODS The paper uses secondary data from the General Statistical Office, World Economic Forum, in which, human resources data are collected from 2012 to 2017. The purpose of this article is to determine what has been researched so far about the effects of Industry 4.0 on Vietnamese human resources. To achieve this objective, a comprehensive review of journal articles, edited volumes, books, conference papers, and other materials were reviewed. 3. RESULTS 3.1. The human resources in Industry 4.0 Industry 4.0 is believed as the integration of the Internet of Things (IoT), cloud computing, advanced data processing and other technological advances into the heart of production and manufacturing systems. It allows the merging of the virtual and embedded production process physical worlds through cyber- physical systems, enabling intelligent objects to communicate and interact with one another. Industry 4.0 brought a new era of technology automation, remotely control robotics connected with machine learning workstation, artificialand augmented reality, self-control robotics which requires minimal input from operators, etc. One common terminology is “smart factory” – the concept of establishing a connection between humans, machines and objects via the internet, thus merging the cyber systems with the physical, industrial world, enabling people to make decentralised decisions in real time. To simply put, a smart factory has the capability to take into account all the data and pinpoint the exact uncertainties within the entire supply chain, from the suppliers to the customers. Smart factory responds to requests and adapts itself in real time, provides a fluid and constant communication from the market to the production line, thus offers a competitive edge for any clientele. Industry 4.0’s primary appeal lies in its ability to act as an economic game-changer which would open up a myriad of opportunities for companies to revamp or create entirely new offerings and business models. Technologies such as mass customization and 3D printing offer greater flexibility to companies to meet varied demand from their customers, who are increasingly favoring more flexible and customizable outputs over standard product offerings. Adoption of Industry 4.0 will result in elimination of lower skilled jobs through automation and the increase in productivity could result in an overall reduction in the number of jobs available. With the increased automation levels, Industry 4.0 will result in shifting of key value adding activities back to the developed economies which will result in further reduction of jobs in the low cost manufacturing countries. The Fourth Industrial Revolution is interacting with other socio-economic and demographic factors to create a perfect storm of business model change in all industries, resulting in major disruptions to labour markets. New categories of jobs will emerge, partly or wholly displacing others. The skill sets required in both old and new occupations will change in most industries and transform how and where people work. It may also affect female and male workers differently and transform the dynamics of the industry gender gap. As per Future of Jobs survey conducted by World Economic Forum, it is expected that a number of skills that are not considered to be significant in today’s context will form one-third of the desired core skill sets of most occupation in 2020. Such a shift in the skill requirement is expected with increased digitalization. The ability to work with data and make data-based decisions will play a pivotal role in the jobs of future.
3. INTERNATIONAL CONFERENCE STARTUP AND INNOVATION NATION 635 Table 1. Scale of skills demand in 2020 Cognitive Abilities 15% Systems Skills 17% Complex Problem Solving 36% Content Skills 10% Process Skills 18% Social Skills 19% Resource Management Skills 13% Technical Skills 12% Physical Abilities 4% Source: Future of Jobs Survey, World Economic Forum With regard to the overall scale of demand for various skills in 2020, more than one third (36%) of all jobs across all industries are expected by the respondents to require complex problem-solving as one of their core skills, compared to less than 1 in 20 jobs (4%) that will have a core requirement for physical abilities such as physical strength or dexterity. However, along with the impact of disruptive changes on these sectors, it is anticipated that complex problem solving skills will become somewhat less important in industries that are heavily technical today—such as Basic and Infrastructure and Energy—in which technology may automate and take on a bigger part of these complex tasks going forward, and will ascend in those industries, such as Professional Services and Information and Communication Technology, that are expected to become more complex and analytical due to these trends. With such a shift in skill requirements, the basic educations level and teaching models are bound to change. Only countries which are able to improve the overall enrolment levels and stay updated with the evolution of the industry technology will continue to stay competitive as manufacturing hubs. 3.2. The current status of human resources in Vietnam Vietnam is considered as a country with demographic bonus in 2017, with a population of about 95.145 thousand people and the estimated population of working age of 55.162 thousand people. Table 2 shows that the number of working-age people of Vietnam in the period from 2012 to 2017 increased from 53.698 thousand people to 55.162 thousand people (an increase of 1.464 thousand people), the average increasing of 1.1 million people per year. This can be seen as a period of “golden population” of Vietnam. Golden population structure is enormous strength contributing to promoting economy-society development. This opportunity appears only once during the history of the development of a country and lasts a maximum of 40 years. According to calculations by population experts, Vietnam finished “young population structure” period in 2017, entered the “golden population structure” period and will reach peak around 2025. Table 2. Vietnamese population in the period of 2012-2017 Unit: 1000 people Year 2012 2013 2014 2015 2016 2017 Population 88.776 89.716 90.400 91.400 92.650 95.145 The number of working age people 53.698 54.370 54.426 54.644 54.745 55.162 Sources: General Statistics Office, Vietnam Taking advantage golden population structure will contribute to create the volume of enormous social wealth, create great value for the future accumulation of the country. In other words, if taking advantage of this opportunity, it will create tremendous growth of social economy, promote the comprehensive development for Vietnam. This can be seen in the phenomenal growth period of Japan, Korea, Singapore and fast development
4. 636 HỘI THẢO KHOA HỌC QUỐC TẾ KHỞI NGHIỆP ĐỔI MỚI SÁNG TẠO QUỐC GIA period of the new industrial countries associated with the period of “golden population structure”. This is young labor source having advantages such as good health, activeness, reception to new things, grasp the echnology quickly, easily moving. If they are methodically trained, equipped with the necessary knowledge and skills, they will promote and encourage the ability of the process of international economic integration. This is a very favorable factor for economy-society development and contributes to increase labor productivity of Vietnam. However, according to the report on Global Competitiveness 2017 (WEF,2016), Vietnam university – level education and training was assessed at the intermediate level, ranking 83 out of 138 countries, extremely lower than other regional coutries like the first position of Singapore or the 41st, 62nd, 63rd of Malaysia, Thailand, and Indonesia respectively. Based on the work force classified by qualification in Vietnam, untrained labors accounted for 80% of employees, less than 10% of them completed universities and higher education. The situation of human resource is a huge challenge to Vietnam companies to transfer from resource – intensive to technology – intensive with renovation. Fig.1. Vietnam’s employment structure by professional level (%) Source: Geneneral Statistics Office Moreover, about 38% of hired-employees were unskilled, nearly 40% were working in primary sectors such as personal services, security, and sales (16.6%); trained labors in agricultural and forestry and aquatic sector (10.3%); craft and other related jobs (12.8%). On the contrary, the rate of skilled and high-qualified labor was only 10%. The ratio implies that it will be difficult for Vietnam to take advantage of Indutry 4.0’s achievements if there are no significant changes in human resources (table 3). Table 3. The number of labours and occupational structure of employed people in Vietnam, 2017 Occupation Number of people employed Percentage (thousand people) (%) Total 53.302,8 100 Leaders 555 1,0 Advanced technical expertise 1.639 3,1 Staff 991,9 1,9 Personal services, security guard, sales staff 8.861,4 16,6 Skilled workers in agriculture, forestry and fishery 5.470,9 10,3 Craftsman 6.827 12,8 Mechanizer and machine operator 4.921,6 9,2 Simple labor 20.247,8 38 Others 129,2 0,2 Source: Geneneral Statistics Office (GSO,2017)
5. INTERNATIONAL CONFERENCE STARTUP AND INNOVATION NATION 637 3.3. The challenges of Vietnamese human resources Vietnam has realized the importance of skill development in achieving economic growth in the future and have taken various measures to bridge the skill gap. From increasing education expenditure to increasing network of vocational trainers by launching nation-wide programs, initiatives have been launched to make the labor force industry-ready. - Vocational education and skill development in Vietnam is primarily supply driven i.e. the skills imparted by training institutes may not be in line with the industry requirement. - Lack of access to vocational education has also contributed to the skill gap that exist today because a number of students are unable to pursue vocational education as sufficient number of vocational schools and training institutes across the country does not exist. - Lack of industrial training is another important challenge. Vocational education in Vietnam is primarily introduced in upper secondary level. At present, the vocational education comprises of courses in vocational schools while apprenticeships are not included as mandatory part of education programs. - Vietnam also faces challenges in terms of having inflexible and outdated curriculum, shortage of qualified teachers and trainers and unavailability of proper, up-to-date infrastructure (building and equipment). 3.4. Some suggestions for Vietnamsese government to improve the quality of human resources Vietnam needs drastic measures to reform the basic, comprehensive education system and training to meet the requirements of industrialization and modernization of the country in the international integration. Renewal of education and training systems in terms of: - Reorganize education and training network, rearrange the national education system both in the scale of training, career structure, training facilities and plan the network of vocational education, university education associated with the planning of economic development — regional society, local and national. - Conduct training follow the need of society, increase practice time, focus on content, skills learners, businesses and society need. Diversify training methods. The training institutions should collaborate with businesses, link theory with practice, encourage employers to participate in formulating, adjust and implement training programs and competency assessment learners. - Develop specific measures aimed at economic restructuring in Vietnam in the direction of industrialization and modernization, such as increasing the percentage of the GDP value of the industry, constructing and trade — service breast; declining relative rate of value in GDP of agriculture, forestry and fisheries; and deleting the distance in urban and rural areas, the plains and the mountains, in order to improve the living standards of the rural population. - Enhance labor productivity. Vietnam should focus on scientific and technological innovation, especially invest, develop auxiliary industries. Increasing investment for scientific research, manufacturing, improving machinery and equipment to enhance labor productivity, reducing manual labor, promote international cooperation, technology transfer and the developed country; Catch up with the technological level of the countries in the region and around the world, requiring speed technology innovation for ourcountry right now at about 20%/year. CONCLUSION In a nutshell, the biggest challenges faced by Vietnam in participating and benefiting from the fourth industrial revolution are the low skill levels of its labor force and poor investment in science and technology. It’s
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