A World Bank lead economist warns that 26% of the Philippine workforce could be replaced by AI. To adapt, employees must learn how to use AI to become more productive, an IT and business process management industry leader says.
MANILA, Philippines – With companies pouring billions into artificial intelligence, could AI replace jobs in the IT and business process management (BPM) industry? And how can students and employees prepare for a work environment being rapidly reshaped by AI?
If you ask IT and Business Process Association of the Philippines (IBPAP) President Jack Madrid, generative AI (Gen AI) won’t replace people yet, but people who use Gen AI will certainly replace people who don’t.
According to the IBPAP president, AI adoption is well underway in 67% of their member companies, representing 60 local and international firms and over 800,000 employees. These AI initiatives span across a range of functions, including customer support, data entry and processing, quality assurance, business services, workforce management, and sales and marketing.
“The impact of AI on operations has been mostly positive, with companies reporting improvements in productivity, operational efficiency, service quality, and revenue generation,” Madrid said at the International IT-BPM Summit 2024 on Wednesday, October 2.
“However, challenges still persist, and these include the cost of implementation, system integration with legacy systems, data privacy, and the lack of skill now being the most significant barriers to adoption.”
AI adoption has mostly led to job gains and shifts in roles, according to an IBPAP survey on member companies:
- 8% reported a reduction in headcount
- 13% reported workforce growth
- 24% said that jobs are changing
- 26% said that employees require “significant reskilling and upskilling”
- 29% said that AI has had no impact on jobs
Based on the data, Madrid said that the industry isn’t facing an immediate risk. However, AI is reshaping the workplace. Workers need to adapt by learning how to work with AI, particularly as certain roles — like data entry and basic customer service — could be most vulnerable to change or elimination.
“AI is here to stay, but it is not negatively impacting our industry yet, as the media likes to say. But yes, AI is changing our industry,” Madrid said. “Gen AI will not replace people. But people who use Gen AI will replace people who don’t.”
At-risk jobs
The World Bank takes a more cautious approach. Gonzalo Varela — World Bank lead economist and program leader of the equitable growth, finance and institutions practice group for Brunei, Malaysia, the Philippines, and Thailand — warned that more than a quarter of the Philippine workforce could be at risk of being replaced by AI, with limited chances of these jobs being complemented by new technologies.
“What I’m going to tell you is 26% of the labor force in the Philippines is exposed [to the AI shock] with low chances of complementarity, so at risk of being substituted. So that’s not a negligible amount of people, and so we need to look into what is it that can be done,” Varela said during the summit.
Among the at-risk jobs identified by Varela were general and keyboard clerks, customer services clerks, numerical and other recording clerks, and sales workers.
The World Bank economist also said that the country “has a long way to go in being prepared” for AI, particularly lacking in AI-related skills and infrastructure. The Philippines currently ranks 76th out of 187 countries in AI preparedness, according to the International Monetary Fund.
Despite these risks, Madrid argued that if AI affects higher-wage jobs in developed countries, offshoring destinations could absorb some of those displaced roles.
“Only 30% of total jobs that can be offshore has been offshored. There are more call center agents in the US than in the rest of the world. So if AI is going to affect jobs, it’s the American agents that will be affected first. And where will those jobs go? To the best place that delivers those services: It’s either Philippines or India. So we will continue to grow,” Madrid said in an interview on Wednesday.
Wanted: AI skills
So how can you protect your job from being disrupted or even stolen by AI? For Madrid, it’s all about “skills, skills, skills.”
Among IBPAP member companies, 21% identified the skills gap in areas like AI, data analytics, and programming as a top concern. For Madrid, embedding AI-related skills into the education system is critical for preparing the next generation of workers.
“AI is the totality of creativity, problem-solving, critical thinking, comprehension. Those are the skills I want our Filipino students to concentrate on,” Madrid said in the interview. “Now that AI is here, it’s time to complement those skills of Filipinos with more technical skills.”
Madrid even went on to say that it was “dangerous” for schools to try to keep AI totally out of classrooms.
“It will set yourself back. It reminds me of the days when schools prohibited calculators in classrooms. It’s the same thing, except the consequences of this is going to be faster and riskier. The AI train has left the station. We need to catch it as fast as possible. We don’t need to fear it,” he said.
“I’m taking a prompt engineering course now….Even an old guy like me has to study and improve my skills,” he quipped. “So should all of us. Our country needs this.”
The IT-BPM industry is projected to end 2024 with $38 billion in revenues and 120,000 new jobs, bringing total employment to 1.82 million. The Philippine IT-BPM industry grew by 7% — double the growth rate of the global average. – Rappler.com
