AI, AUTOMATION AND
THE FUTURE OF JOBS AND SKILLSThe role of the CEO in shaping tomorrow’s workplace in Asia

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AI, automation and the future of jobs and skills
The role of the CEO in shaping tomorrow’s workplace in Asia

Preface“AI, automation and the future of jobs and skills: The role of the CEO in shaping tomorrow’s
workplace in Asia” is an Economist Corporate Network (ECN) management brief. It is based ona survey of the primary members (regional/country CEO/president) of the 500+ ECN clients
based in the Asia-Pacific region, as well as discussions at focus groups conducted in Hong Kong,
Shanghai, Singapore and Tokyo. The report was sponsored by Hays and WeWork. The findings
and views expressed in this report are those of the ECN alone and do not necessarily reflect theviews of the sponsors.
The report was written by Lauren Altria and edited by Florian Kohlbacher in Tokyo, witheditorial input from Mary Boyd in Shanghai, Robert Koepp in Hong Kong and Pamela Qiu in
Singapore. Gaddi Tam in Hong Kong was responsible for design.
We would like to thank all the respondents and focus-group participants for their time andinput.

October 2018

© The Economist Corporate Network. All rights reserved. All information in this report is verified to the best of theauthors’ and the publisher’s ability. However, the Economist Corporate Network does not accept responsibility for
any loss arising from reliance on it. Neither this publication, nor any part of it, may be reproduced, stored in a retrieval
system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise,
without the prior permission of the Economist Corporate Network.

© The Economist Corporate Network 20181

AI, automation and the future of jobs and skills
The role of the CEO in shaping tomorrow’s workplace in Asia

Contents

2

3

Key findings
A quick read of the brief and its findings

4

Introduction
Asia’s business leaders share their thoughts on how AI and automation are affecting theirbusinesses, workers and jobs

5

Perceptions of AI, automation and their impact
How do business leaders believe AI will shape the wider workforce and the nature of work itself?

9

Imagining the future of jobs and skills
How will AI and automation change the jobs and skills necessary for the future?

15

The role of the CEO in shaping the workplace
What strategies are businesses adopting to prepare for the workplace of the future, and how dobusiness leaders position themselves within those strategies?

22

Appendix© The Economist Corporate Network 2018

AI, automation and the future of jobs and skills
The role of the CEO in shaping tomorrow’s workplace in Asia

Key findings
A quick read of the brief and its findings
We asked: What are business leaders’ perceptions on the impact of automation and artificial intelligence(AI)?
 How will automation and AI reorient the way we work and the skills necessary in future?
 What obstacles do businesses face in preparing for the new world of work, and what are theirstrategies in dealing with them?
 How do business leaders position themselves in shaping the future workplace?

We learn that: For businesses, AI represents the here and now. Perceptions are increasingly varied, but the
majority of CEOs expect the full effects and scale to be felt within three years from now.
 Automation and AI are overwhelmingly identified as big opportunities for businesses, yet few
CEOs feel highly prepared to deal with the technological transformations.
 CEOs believe that the impact of AI and automation on their businesses will result in
improvements in productivity and efficiency. The impact on workers is conversely associatedwith threats to job and income security.
 CEOs are aware of how AI and automation are affecting work spaces, and employees’ growing
demand for flexible environments that reflect these changes and provide opportunities forconstant learning.
 CEOs feel that their businesses lack the right structures to skill up their workforces effectively.
The consensus among business leaders is the need for greater collaboration between
businesses, governments and academic institutions.
 People skills remain the most important skill for the future, despite the growing need for data
scientists to help to devise strategies centred on new technologies.
 CEOs realise that automation and AI are no longer the future. They are increasingly committed
to strategies that accelerate their arrival, rather than soften their impact.

© The Economist Corporate Network 20183

AI, automation and the future of jobs and skills
The role of the CEO in shaping tomorrow’s workplace in Asia

Introduction
Asia’s business leaders share their thoughts on how AI
and automation are affecting their businesses, workers
and jobs.
AI and automation have penetrated almost every aspect of the new world of work. The fourthindustrial revolution, which signals a massive technological disruption that will fundamentally
alter humanity itself, has forced more and more businesses to embrace the mantra of “adapt
or die”. Fast-paced and inevitable are the words now used to characterise the confluence oftechnologies over the past decade, and despite not knowing how the transformation will unfold,business leaders recognise that the physical world and the digital world are coming together. As aresult, the response must be integrated, comprehensive and timely.
From their inception, AI and automation have been tied to a narrative centred on thedisplacement of humans. The dominant perception of AI and automation as forces thatwill disrupt and displace, however, is increasingly being contested. Many CEOs anticipate
the opportunities that technology will bring to markets and societies constrained by acutedemographic issues. Concerns about AI’s threat to jobs, privacy and humanity are not without
merit, yet the degrees to which they comport with reality vary across countries/regions andindustries.1 The overwhelming sense of optimism placed in AI and automation among the CEOssurveyed certainly signals a growing, or even natural, attitude to embrace and accelerate theirarrival, despite the negative impact on workers that these technological shifts may initially bring.

The Economist Intelligence
Unit (2017): Risks andrewards: scenarios aroundthe economic impact ofmachine learning.
1

The Economist Corporate
Network (2017): Automation,
AI and the future of work:
The role of the CEO inshaping tomorrow’s
workplace in Asia; ECN(2016): Skills 4.0: How CEOs
shape the future of work in
Asia.
2

4

But how exactly do business leaders believe AI will shape the wider workforce and the natureof work itself? What skills and attributes will be required to use, rather than be used by, AI? And
what is the strategic imperative stemming from this fundamental shift? How can CEOs start
preparing their firms—and their employees—for this new world of work and proactively shape
the future of their organisations? Despite the overwhelming shortage of data scientists, manybusiness leaders claim to seek employees with “people” and “soft” skills. As AI radically reorientsthe nature of work, the economy that emerges will increasingly rely on workers to tap into theirmore “human” talents.
This new study from the Economist Corporate Network (ECN) examines the implications of
AI on the workforce and the nature of work in Asia from the CEO’s perspective. The report also
makes comparisons with findings from our studies in 2016 and 2017 in order to gauge the pace,magnitude and extent of development in this crucial area.2 In our fifth annual Global TalentManagement Initiative, the ECN conducted a survey of regional CEOs and country heads at its
500+ member companies across Asia, as well as focus-group discussions with senior executives
across Tokyo, Shanghai, Hong Kong and Singapore to explore how AI and automation arechanging the nature of skills and work, and how CEOs should go about preparing their firms andtheir workforces for this new world of work.
© The Economist Corporate Network 2018

AI, automation and the future of jobs and skills
The role of the CEO in shaping tomorrow’s workplace in Asia

Perceptions of AI, automation and theirimpactHow do business leaders believe AI will shape the wider
workforce and the nature of work itself?
The tipping point
Business leaders have long touted that we stand at the brink of a technological revolution. In 2017
our survey findings demonstrated that over 70% of respondents expected their businesses to feelthe full effects of automation and AI within the next five years. In 2018 this figure dropped to 58%.
CEOs have taken a more varied perspective towards their expectations on AI and automation.
For a greater number of business leaders, AI and automation are no longer the future, with 12.2%
claiming that their businesses are already experiencing the full impact and scale, compared with
only 5.9% in 2017. For 23.2% of respondents, however, the full effects are predicted to take holdin five to ten years’ time, increasing from 16.8% in 2017. Furthermore, patterns across subregionsin Asia are noticeably different. Whereas the majority of respondents in mainland China (40%)
and South Korea (50%) believe that the full impact will be experienced within the next three tofive years, most business leaders in Hong Kong (58.3%) anticipate that the effects will occur muchsooner, in one to three years’ time.

It is increasingly
difficult to preempt the emerging
changes brought
about by AI and
automation—it is amoving target.

When do you think the full impact and scale of automation and AI will be felt by your business?
(% of respondents)

Now
Within a year from now
One to three years from now
Five to ten years from now
More than ten years from now
2017 5.9
2018 12.2

7.9
2.4

38.6
36.6

Three to five years from now

25.7
19.5

16.8

5.0

23.2

6.1

Source: Economist Corporate Network.

Familiar technology
A large majority of CEOs are aware of emerging technologies. Nonetheless, disparities persist
among the types of technology. In our 2017 survey, over 84% of CEOs claimed to have a moderate
to high level of awareness on how AI can both disrupt and challenge, and provide opportunities
for their business. Of the business leaders surveyed across Asia in 2018, 82.1% responded thatthey are aware about how to leverage AI to shape the future of work. Furthermore, a substantial
86.8% of CEOs note a firm understanding of how to leverage big data in particular. Few, however,feel confident in dealing with the less mature technologies: cryptocurrencies and blockchain.
In 2017 only 7% of CEOs felt a strong level of familiarity with cryptocurrencies and blockchain.
Although a greater number of business leaders believe that they are aware of how to leverage© The Economist Corporate Network 20185

AI, automation and the future of jobs and skills
The role of the CEO in shaping tomorrow’s workplace in Asia

such technologies compared with 2017, AI and big data still command the attention of CEOs toa greater extent. Furthermore, different subregions across Asia demonstrate varying degrees ofconfidence in certain technologies. In mainland China, for example, 45% of CEOs strongly agree
that they are aware of how to leverage big data. In comparison, CEOs in Singapore took the leadin AI and those in Japan for cryptocurrencies, with 37.5% and 20% of those surveyed respectively
claiming to have a strong level of awareness.
As CEO, I am aware about these technologies and how my business can leverage them to shape
the future of work.
(% of respondents)

Strongly disagree

AI 1.5Blockchain 1.5
Big data
Other(please specify)

Neutral

16.4

IoT 1.5 5.9
Cryptocurrencies

Disagree

Agree

Strongly agree

64.2

17.9

22.1

7.4

57.4

14.7
13.2
13.2

44.1
41.2
55.9

19.2 3.9

13.2
27.9

5.9

36.8

7.4
30.9

57.7

15.4 3.9

Source: Economist Corporate Network.

Optimistic and unprepared
Automation and AI are overwhelmingly identified as big opportunities for businesses. Of thosesurveyed, over 70% perceive automation and AI to present an opportunity compared with athreat, with 47.6% within that figure identifying the technology as a big opportunity. By contrast,
only 7.3% of respondents indicate automation and AI as a big threat. This follows a similar pattern
to responses in 2016 on megatrends andskills, in which 54.4% of respondents saw
To what extent do you perceive automation
and AI to present a threat or an opportunity?
technological progress as a big opportunity,
Pleaseindicate how strongly your company
compared with only 7.4% who perceived it
is affected.
as a big threat. Across subregions in Asia,(% of respondents)
Singapore is the most optimistic, with an
Big threat
overwhelming 75% of those surveyed claiming
7.3
Small threat
AI as a big opportunity for their business.
12.2
Neither/nor
Despite the vote of confidence, very few
Small opportunity
47.6
7.3
Big opportunity
CEOs feel prepared to face the disruptions,challenges and opportunities that arise from25.6
AI and automation. Our survey shows that
only 7.3% feel highly or fully prepared, withthe majority responding that they feel only
Source: Economist Corporate Network.
6© The Economist Corporate Network 2018

AI, automation and the future of jobs and skills
The role of the CEO in shaping tomorrow’s workplace in Asia

moderately prepared. In fact, a greater number feel completely unprepared, rising from only 1.2%
in 2017 to 8.5% in 2018. At the very least, a disjunction between the perception of AI as a threat oran opportunity and a business’s level of preparedness appears to be emerging.

Demographics countMany executives in the Tokyo focus-group discussion referred to AI as an opportunity for Japan,
regardless of the challenges that individual companies and industries may face. This attitude
stems from Japan’s acute demographic issues, which are dispelling popular concerns related to AI
and automation in terms of the displacement of labour. In the healthcare industry, for example,
AI is now being used to solve both the problem of the labour shortage and the ageing population.
Diagnosis and drug discoveries are being made increasingly accurate and more regularly as aresult of technology, which will only grow in importance alongside the number of elderly living
beyond 100 years. Technology is filling widening gaps in Japan’s labour market, in part explaining
executives’ exceedingly optimistic stance towards AI and automation, despite their inability to
predict what the future might entail.

Technology isfilling widening
gaps in a numberof shrinking labour
markets.

To what extent are you ready to face the disruptions, challenges and opportunities that arise
from automation and AI?
(% of respondents)

Completely unprepared

Somewhat prepared2017 1.2
2018 8.5

Moderately prepared37.2

Highly prepared
46.5

41.5

Fully prepared
14.0

1.2

42.7 6.1 1.2

Source: Economist Corporate Network.

Business impact
CEOs identify an array of different potential effects from automation and AI to their business.
The majority (34.2%) of those surveyed think that the primary impact that automation and AI will
have on their business is in increasing productivity, compared with 23.8% in 2017. Respondents
to a recent survey conducted by The Economist Intelligence Unit (EIU) also revealed an
overwhelmingly optimistic stance towards the economic benefits that AI will bring. Over the
next five years, survey respondents expected AI to have a positive impact on growth (90%),
productivity (86%), innovation (84%) and job creation (69%) in their country/region and industry.3
In addition, the CEOs surveyed by the ECN think that automation and AI will improve relations
with their customers, reduce costs and create new types of jobs. However, automation and AI
do not always have a positive impact on business. Among the potentially negative effects are
creating redundancies, making certain job categories obsolete and changing existing work habits
and patterns. Only a small number of CEOs think that automation and AI will increase costs orcreate more positions in their business.
© The Economist Corporate Network 2018

The EIU (2018):
Intelligent economies: AI’stransformation of industries
and society.
37AI, automation and the future of jobs and skills
The role of the CEO in shaping tomorrow’s workplace in Asia

Please choose the top three impacts or potential impacts from automation and AI to yourbusiness.
(% of respondents)

Increase worker productivity
Lower costs
Increase costs
Create more positions/increase headcountCreate redundancies/reduce headcountCreate new jobs (eg types of jobs that do not yet exist)
Make some existing jobs obsolete
Change work habits (eg full-time, fixed-hours, etc)
Improve relations with customers
Optimise training and learning
Increase scale and speed of operations
No 1 34.2

6.1 1.2 6.1

No 2 11.0
No 3 9.8

17.1
17.1

4.9

1.2 3.7

4.9

17.1
6.1

8.5

6.1 1.2

15.9

7.3

13.4

11.0

13.4 4.9

24.4
11.0 3.7

14.6
24.4

Source: Economist Corporate Network.

The workspace
AI and automation
are enabling
new kinds ofworkplaces as aresult of wideranging impacts.

It is clear that AI and automation are enabling new kinds of workplaces as a result of wide-ranging
effects on the way businesses are handled. The managing director at a multinational businessservices consultancy in the Hong Kong focus-group discussion remarked that his company had
just completed a three-year process of turning its workplace into a “workspace”. The workspaceconcept involves creating a more open, collaborative environment based around fluid spaces anddigital connectivity. Other than such business benefits as speed and convenience, digitisation has
reduced materials printing which, in turn, lowers costs and the carbon footprint of operations.
The move has been well received overall, but also has required careful attention to enhancing
communications security in the new, open environment.
Summary points
 CEOs have taken a more varied stance on their expectations of AI and automation, but agreater proportion believe that businesses are already experiencing the full effects.
 CEOs feel increasingly aware of familiar technologies such as AI and big data, but lackawareness about immature technologies such as cryptocurrencies and blockchain.
 Very few CEOs identify AI and automation as a threat towards their business. The vast
majority see changes as a big opportunity, despite their lack of preparedness.
 CEOs continue to believe that the most important effects of automation and AI will bepositive: improving efficiency, increasing worker productivity and lowering costs.

8© The Economist Corporate Network 2018

AI, automation and the future of jobs and skills
The role of the CEO in shaping tomorrow’s workplace in Asia

Imagining the future of jobs and skills
How will AI and automation change the jobs and skills
necessary for the future?
Tomorrow’s workplace
A large majority of those surveyed believe that automation and AI will affect the way theiremployees work. In accordance with 2017 responses, 62.8% of CEOs think that the biggest change
automation and AI will have on the workplace is bringing in more flexible working arrangements
and less formal employment types. 32.1% of those surveyed indicate that less job security is
the biggest secondary impact to the way people work. Although a flexible labour market can inmany contexts be an asset for countries/regions, businesses and workers, job insecurity fromtechnological changes risks threatening workers’ quality of life and could translate into unstable
incomes. In addition, job insecurity for workers could mean lost loyalty for businesses due to highturnover rates and the potential of being replaced quickly. Some of the positive effects manybusiness leaders cite include: higher wages, the ability to work from home, the possibility toretrain and learn new skills, and a greater chance to influence and contribute towards change insociety. As AI and automation increase productivity and efficiency, moreover, the typical workday
and workplace as we know it may become things of the past, which explains why over 15% ofCEOs cite shorter working hours as the top potential impact of automation and AI.

As AI andautomation
increaseproductivity andefficiency, thetypical workday
and workplace
as we know it will
become things ofthe past.

Please rank the top three impacts or potential impacts from automation and AI to the way
people work in your business.
(% of respondents)

Shorter working hours
Longer working hours
More flexible work arrangements (less formal employment types)
Less flexible work arrangements (more formal employment types)
More job security
Less job security
More non-wage compensation
Less non-wage compensation
OthersHigher wages
Lower wages
No 1 15.4

1.3

No 2 15.4

2.6

No 3 9.0

5.1

62.8 1.3
19.2
7.7

5.1

1.3

6.4
23.1

10.3

2.6

11.5

1.3
1.3 3.9
1.3

32.1

12.8

1.3
3.9 3.9
1.3

19.2

2.6

15.4

Source: Economist Corporate Network.

Who will be affected?
Our survey finds that CEOs expect some workers to be more affected by automation and AI thanothers. Responses in 2017 suggest that CEOs believed automation and AI would have a greater
impact on older workers than on younger staff, with 23.6% anticipating that older workers would
be extremely affected. Although this perception remains, comparatively only 9% in the 2018
© The Economist Corporate Network 20189

AI, automation and the future of jobs and skills
The role of the CEO in shaping tomorrow’s workplace in Asia

survey believe that older workers will be extremely affected. On the whole, fewer respondents
perceive demographic differences as a significant marker that will be affected by automation and
AI. Of those surveyed, the number of respondents who expect gender and age to be a variableinfluenced to a high degree by the effects of AI and automation has markedly decreased.
To what extent do you think workers within your business will be affected by automation
and AI?
(% of respondents)

Not affected at all
Low-skilled workers 1.3

Somewhat affected
10.3

Moderately affected

12.8

High-skilled workers 16.7

46.2
43.6

51.3 7.7 1.3

20.5

Younger workers 9.0

51.3 10.3
38.5

21.8

2.6

29.5 7.7 2.6

24.4

Male workers 16.7

Older workers 5.1

26.9

42.3

Female workers 15.4

Extremely affected

48.7

Middle-skilled workers 1.3 7.7

Despite thechronic shortageof data scientists,
people skills
remain the mostvalued for businessleaders.

Strongly affected

30.8
33.3

1.3

20.5 1.3
30.8

9.0

Source: Economist Corporate Network.

In terms of skills, CEOs continue to expect low-skilled workers to be the most affected, with an
overwhelming 75.6% expecting them to be strongly affected or extremely affected. Furthermore,a markedly higher proportion (40%) of business leaders in mainland China expect low-skilledworkers to be extremely affected, compared with only 10% of those surveyed in Japan. Meanwhile,
all respondents feel that middle-skilled workers will be affected to some, albeit to a lesser,
degree. Interestingly, the number of respondents who believe that high-skilled workers will not beaffected at all has increased from 6.7% in 2017 to 16.7% in 2018, suggesting greater confidence inthe stability of high-skilled labour in the face of tasks and jobs that risk being automated or maderedundant by AI.

Future skills
People skills remain the most important skill for the future based on advances in automation and
AI. Of those surveyed, 46.2% rate people skills as extremely important, closely followed by soft
skills, at 41%. Compared with the 2017 responses, however, a greater number of CEOs believethat business skills will be extremely important, increasing from 14.6% of those surveyed to38.5%. A similar rise can be seen in the importance CEOs place on technological skills. Meanwhile,
hard skills remain one of the least valued by business leaders. Only 6.4% of CEOs think that
hard skills are extremely important, and 18% believe that they are only somewhat important. A
10© The Economist Corporate Network 2018

AI, automation and the future of jobs and skills
The role of the CEO in shaping tomorrow’s workplace in Asia

larger proportion (50%) of CEOs in both Singapore and South Korea think that business skills are
extremely important compared with other countries/regions across Asia. Furthermore, 70% of
those surveyed in Japan, compared with only 25% in South Korea and 16.7% in Hong Kong, deem
people skills as extremely important, suggesting cross-cultural differences depending on thebusiness environment.
Based on advances in automation and AI, how important do you think the following skills
will be in future?
(% of respondents)

Not important at all

Somewhat important

Soft skills 5.1

Moderately important

7.7

41.0

38.5
10.3

Technological skills 6.4

Extremely important

46.2

Hard skills 18.0
People skills 1.3

Strongly important

37.2

42.3

46.2

15.4

48.7

Business skills 1.3 7.7

6.4

52.6

29.5
38.5

Source: Economist Corporate Network.

Jobs vs tasks
CEOs have a less radical notion of change than is often associated with AI and automation. Our
survey found that only a small number of CEOs (9%) think that automation and AI will only affectentire jobs. Of those surveyed, 44.9% expect automation and AI to affect certain jobs entirely
and specific tasks within other jobs, whereas 46.2% think that only specific tasks within jobs will
be affected. These results reflect similar findings to responses in 2017, indicating that businessleaders understand that the effects of automation and AI are complex and gradual. Rather
than making a number of jobs redundant, AI and automation are more closely associated withassisting humans in certain tasks and optimising specific processes, which may go on to shape andreorient some of the primary roles and duties of many jobs.
In my business, automation and AI will:(% of respondents)
Mostly affect entire jobs
Mostly affect specific work/tasks
Affect certain jobs entirely and specific work/tasks within other jobs
2017 11.2
2018 9.0

41.6
46.2

47.2
44.9

Source: Economist Corporate Network.

© The Economist Corporate Network 201811

AI, automation and the future of jobs and skills
The role of the CEO in shaping tomorrow’s workplace in Asia

Summary points
 The majority (62.8%) of CEOs continue to think that the biggest change automation and AI
will have on the workplace is bringing in more flexible working arrangements and less formal
employment types.
 In 2018 fewer CEOs believe that older workers will be extremely affected by AI and automation.
In general, demographic differences are perceived to be less significant than in the past.
 CEOs increasingly believe that high-skilled workers are at less risk of being made redundant asa result of AI and automation.
 People skills and soft skills remain the most valued by employers.
 Only a small number of CEOs (9%) think that automation and AI will only affect entire jobs.
The majority (46.2%) think that only specific tasks within jobs will be affected.

12© The Economist Corporate Network 2018

AI, automation and the future of jobs and skills
The role of the CEO in shaping tomorrow’s workplace in Asia

The picture in mainland China
Policy background and digital ecosystem
Coincidentally, the focus-group discussion
in Shanghai coincided with the city’s hostingof the 2018 World Artificial Intelligence
Conference. This global conference
comes a year after mainland China’s StateCouncil (the cabinet) issued guidelines ondeveloping AI. In keeping with mainland
China’s traditional approach to industrial
planning, the State Council 2017 document
set targets: by 2030 mainland China should
be a global innovation centre in AI, with thetotal output value of AI industries reaching
Rmb1trn (US$151.5bn) by that year. In linewith this goal, the government is providing a
supportive policy environment and financial
support for industrial upgrading throughautomation, as well as for AI development.
Meanwhile, several companies (including
Microsoft of the US) have recently
announced investment in new AI technology
projects and labs in mainland China.
What makes mainland China’s digital
ecosystem unique?
The sophisticated and omnipresent digital
ecosystem that has developed in mainland
China was the starting point of the Shanghai
focus group. This discussion acknowledgedthat mainland China’s pioneering use of AI
software for surveillance purposes, alongwith ongoing concerns about intellectualproperty issues and the integrity of data,
adds to the complexity of this topic, as does
the speed and scale of mainland China’s
adoption of digital systems.
The use of mobile-based payment,
messaging and informational systems has
become ubiquitous in mainland China, andthe accompanying changes to lifestyles areoften hard for overseas corporate visitors
to comprehend. The contrast is particularlymarked for senior management executives
who live in a “pre-digital bubble”—in fact
one focus-group participant recounted© The Economist Corporate Network 2018

deliberately stranding a corporate visitor
to experience a “deep-end” cashless,omnichannel digital economy. The resulting
disorientation prompted the executive toreorganise a number of business functions to
be more in tune with the digital lifestyles ofclients and employees in mainland China.
However, newly evolved digital lifestyles andcorporate practices in mainland China may
be a source of contention with corporate
headquarters. For companies directlyinterfacing with consumers, such as in fastmoving consumer goods, they are probably
already pursuing customer-centric digital
engagement, and the global team maywell be viewing the Chinese model as an
incubator for even more innovation that caneventually be adopted by the global teams.

Mainland China
is providing a
supportive policy
environment andfinancial support
for industrial
upgrading throughautomation, as
well as for AI
development.

However, many industrial companies
operating in mainland China are facing
reverse challenges, as traditional global
corporate practices and marketing
approaches may become more and more
estranged from fast-paced, localised (justfor mainland China) digital adaptations. A
danger is that parallel systems will evolve—
one for internal, mainland China-based use,
and one for global use—which may stretch
both compliance and integration with
global payment and administrative systems.
Many mainland China-based operations
now routinely conduct business processes(including price negotiations, exchange ofcontracts, strategy sessions, communication
with local government etc) entirely on the
WeChat messaging platform, with payments
via Alipay—but must then revert to corporate
email for a formal summary that will be on
the corporate server’s memory.
Other examples of “disconnects” cited byfocus-group participants focused on theincomplete nature of digital adoption—for example, awkward combinations of13

AI, automation and the future of jobs and skills
The role of the CEO in shaping tomorrow’s workplace in Asia

e-documentation with requirements forpaper-based signatures. Such instances werefelt to be reflective of a “lag” in regulatory
processes in keeping pace with technologicalchange.

Companies thathave embarked on
the transformation
to digital platforms
reported an
expansion ofmanagement
efficiency and arethinking of client
relationships.

14

Also noted were companies (bothmultinational corporations and Chinesestate-owned enterprises) that are late to
the AI discussion, and are now having to
respond to a top-down directive to enact“digital transformation”, without many clues
as to what this could or should entail. One
discussant described CEOs in this situation
as “internally challenged and externallypressured”.
By contrast, companies that have embarked
on the transformation to digital platforms
and AI-enabled process reported an
expansion of management efficiency (forexample, use of digital communication toenhance employee communication) as well
as a rethinking of client relationships (such asuse of client recommendations and referrals
to identify new customers).
What is the role of the CEO in managing
this far-reaching and multifaceted
transformation? The enormity of thechallenge to corporate culture necessitates
the inclusion of stakeholders throughout thecompany in innovating and troubleshooting
new solutions. Rather than merely relying on
existing business unit functional allocations,discussants cited examples of companies
rewarding grassroots involvement inrethinking processes and discovering newmarkets. Blurring traditional lines will
require a reorganisation of roles, and eventhe transition of some roles into more fluid
project-based assignments, in keeping withthe pace of change.

© The Economist Corporate Network 2018

AI, automation and the future of jobs and skills
The role of the CEO in shaping tomorrow’s workplace in Asia

The role of the CEO in shaping theworkplace
What strategies are businesses adopting to prepare forthe workplace of the future, and how do business leaders
position themselves within those strategies?
Communication is key
In general, CEOs are still not confident that their automation and AI strategy is consistentthroughout their organisation. Of those surveyed, 33.9% confess that they do not believe that
their automation and AI strategy is clearly communicated to their employees, whereas only
22.1% agree that it is. This result remains consistent with responses in 2017, suggesting that clearlycommunicating a strategy to all workers remains a big challenge for businesses. If they want
to shape the future of work in their companies successfully, CEOs need to find better ways ofmaking sure people further down the hierarchy get the message. Without a clear strategy among
the workforce, it is no wonder that many businesses struggle to feel prepared in facing the digital
disruption.

Many businessleaders remain
reluctant to
involve external
specialists intheir recruitment
processes.

Our automation and AI strategy is clearly communicated to our employees.
(% of respondents)

Strongly disagree2017 10.3
2018 7.4

Disagree

Neutral

38.5
26.5

Agree
32.1
44.1

Strongly agree
17.9

1.3
22.1

Source: Economist Corporate Network.

How do companies build tomorrow’s workforce?
Among CEOs in our focus-group discussions, the lack of talent and difficulties in obtaining
talent were cited as major obstacles for businesses when facing digital disruptions. Despite
such challenges, many business leaders remain reluctant to involve external specialists in their
recruitment processes. Only 23.6%, down from 29.5% in 2017, often or regularly use external
training. Outsourcing firms and recruitment specialists are even less commonly used, with only
20.6% and 10.3% of respondents, respectively, saying that they often or regularly involve external
specialists. According to our survey, preparing workers for the realities of tomorrow’s workplaceoccurs mostly through internal and on-the-job training.

© The Economist Corporate Network 201815

AI, automation and the future of jobs and skills
The role of the CEO in shaping tomorrow’s workplace in Asia

When preparing our workforce for automation and AI, we make use of:(% of respondents)

Never
Internal training 5.9

Rarely

11.8

Often

35.3

External training 7.4

25.0

44.1

On-the-job training 2.9 5.9

35.3

Recruitment specialists 17.7

39.7

IT tools/software 2.9 2.9IT consultants/technicians 7.4

Sometimes

38.2

8.8

22.1

1.5

48.5

7.4

32.4

42.7
17.7

Outsourcing firms 10.3

Regularly

42.7
29.4

42.7

8.8

25.0

7.4

19.1

1.5

39.7

Other (please specify) 52.9

7.4

8.8 1.5

30.9 4.4 4.4

Source: Economist Corporate Network.

CEO involvement
In general, CEOs understand the importance of their involvement in order to make sure that theircompany continues to leverage technology to shape tomorrow’s workplace. Of those surveyed,
61.7% claim that they are closely involved with making sure that their company has the rightapproach. Despite this, there is room for improvement and more CEO involvement. A sizeable
share of CEOs, around 38%, responded that they are neither closely involved or otherwise. This
trend follows on from responses given in 2017, suggesting that CEOs themselves will need to
become more involved in order to communicate their strategy to the workforce clearly.
I am closely involved with making sure our company has the right approach to automation
and AI.
(% of respondents)

Strongly disagree2017 2.7

13.5

2018 1.5 5.9

31.1
30.9

Disagree

NeutralAgree

Strongly agree
43.2

9.5

52.9

8.8

Source: Economist Corporate Network.

The race to implement AI
Interestingly, a large proportion of CEOs have changed their approach to automation and AI
within the past year. Of those surveyed in 2017, 58.1% stated that their approach was to soften theimpact on work from automation and AI, while only 40.5% said that they preferred to accelerate
16© The Economist Corporate Network 2018

AI, automation and the future of jobs and skills
The role of the CEO in shaping tomorrow’s workplace in Asia

the arrival of automation and AI to the workplace. But this trend has been bucked. 64.7% ofCEOs now believe in an approach based on accelerating their arrival, compared with only 35.3%of those who say that their approach is to soften the impact. The race to adopt and implement
AI in business processes reflects such a shift in attitude. In a recent study conducted by The EIU,
for example, more than one in four respondents (27%) said that their organisations had alreadyincorporated the technology into key processes and services, while another 46% had one or more
AI pilot projects under way.4
My approach to automation and AI is closest to:(% of respondents)

Accelerating their arrival
2017
2018

Softening their impact

40.5

Delaying their arrival
58.1 1.4

64.7

35.3

Source: Economist Corporate Network.

Corporate inertia
The ability dramatically to change the culture of their company to thrive in a digitally competitive
business environment is one major challenge shared by CEOs in the Singapore focus group. Thereis a huge amount of inertia in many large multinationals, and especially those with 100-year-old
histories. The senior executives discussed a number of ways they are working to ensure that theirteams remain at the forefront of innovation. It was clear that through all the examples shared,
partnerships were a crucial element. “We are educating ourselves by working with government,
academia and business including start-ups, extending our reach across the entire ecosystem,”shared one CEO. “We are working hard to build our network and collaborate with partners, fromthe big—such as the likes of Google—to the small, such as the start-ups or in incubator labs,” said
another CEO.

CEOs now believe
in an approach
to automation
and AI based on
accelerating theirarrival, rather thansoftening theireffects.

Leading others
To encourage their employees to embrace automation and AI as realities of tomorrow’s
workplace, CEOs must also lead by example, as many are already doing. Our survey finds thatan overwhelming majority of CEOs in both 2017 (81.1%) and 2018 (76.5%) claim that they would
lead by example and gladly automate parts of their job if AI was better at doing them than theyare. Furthermore, 80.9% of CEOs agree or strongly agree that they spend more time on thinking
about what skills their business will need in the future than they did in the past. The fast-paced
nature of technological change, which the majority of business leaders anticipate within the next
three years, thus requires CEOs to consider how their industry itself will transform and the skills
necessary for the new world of work.
© The Economist Corporate Network 2018

The EIU (2018):
Intelligent economies: AI’stransformation of industries
and society.
417

AI, automation and the future of jobs and skills
The role of the CEO in shaping tomorrow’s workplace in Asia

As CEO, I would lead by example and gladly
automate parts of my job if AI was better atdoing them than I am.

I seem to spend more time on thinking about
what skills our business will need in future
now than I did before.

(% of respondents)(% of respondents)
7.5
16.2

30.9

Strongly disagree
Disagree
NeutralAgree
Strongly agree

45.6

More and more
corporates arebeing forced tooffer a different
kind of work
environment
and experience
to remaincompetitive.

18

Source: Economist Corporate Network.

22.1

5.9
13.2

Strongly disagree
Disagree
NeutralAgree
Strongly agree

58.8

Source: Economist Corporate Network.

Incentivising skills training
Echoing calls by the Japanese prime minister, Shinzo Abe, executives in our Tokyo focus groupstressed a number of structural reforms necessary to create a fluid labour market in Japan.
Firm specific skills, which have been propped up by Japan’s traditional emphasis on the lifetime
employment system, are a thing of the past. The lack of fluidity has led to small, internal labour
markets deprived of the incentive to skill up and remain employable. This incentive issue,
however, was noted to be offset by a new type of graduate and employee that executives are
increasingly witnessing. The popularity of workspaces such as those offered by Google andApple of the US are causing more and more corporates in Japan to offer a different kind of work
environment and experience to remain competitive. The millennial generation is frequently
prioritising opportunities to train and upgrade
their skill set over salaries. Companies,
We have the right structures in place to skill
therefore, must offer more learning
up our existing employees.
opportunities to attract the right talent. The(% of respondents)
response from business leaders in our survey
Strongly disagree
also reflects an ambivalence about whether
1.5
Disagreecompanies have the right structures in place
22.1
Neutral
27.9
Agree
to skill up existing employees, with a larger
Strongly agree
proportion of those surveyed in disagreement
than agreement. Indeed, although companies
48.5
may have a vision of what they need to
become and how to do it, very few have theresources to implement that plan in reality, one Source: Economist Corporate Network.
respondent in the focus group observed.

© The Economist Corporate Network 2018

AI, automation and the future of jobs and skills
The role of the CEO in shaping tomorrow’s workplace in Asia

Summary points
 The majority (44.1%) of CEOs still feel ambivalent about whether their AI strategy is clearlycommunicated across their company.
 Companies remain reluctant to involve external specialists in preparing their workforce, with
only 23.6% often or regularly using external training.
 A greater proportion (64.7%) of CEOs now believe in an approach based on accelerating thearrival of AI and automation, compared with only 35.3% of those who prefer to soften theimpact.
 Partnerships between governments, academia and businesses are a crucial element to thrive
in a digitally competitive business environment.
 An overwhelming majority of CEOs would lead by example and automate parts of their job if
AI was better at doing them than they are.
 An increasing number of graduates and employees demand constant learning within thecompany in order to upgrade their skills and remain employable in fluid labour markets.

© The Economist Corporate Network 201819

AI, automation and the future of jobs and skills
The role of the CEO in shaping tomorrow’s workplace in Asia

Skills in Asia
Collaboration
across borders
is increasingly
important, withmany executives
demandingemployees who
can work in multigeographical,
multi-cultural
settings.

The global mindset
As a technologically advanced country, thebarriers facing Japan go beyond mattersof software, information technology andautomation. The focus-group discussion inTokyo emphasised cultural and linguistic
concerns for Japan’s business world.
One of the major challenges involves
transcending a Japan-centric businessmodel in which strategies and products areprimarily designed for the domestic market.
Transitioning towards an international
market, in which joint ventures and mergers
and acquisitions play a key role, requires
what many of our executives termed the“global mindset” and the ability to work in a
multi-geographical, multi-cultural setting inwhich questions and issues are often framed
differently.
Bilingualism
Collaboration across transnational
borders requires a high degree of cultural
understanding and co-operation. The
majority of executives in our Tokyo focus
group remarked on the difficulties infacilitating the management of culturaldifferences in Japan’s business environment,
whereby the majority of employees lack aglobal or bilingual background. Althougha number of measurements have been
deployed by companies, such as overseas
training and the use of English as theofficial internal language, it appears thatefforts made at executive level are often
undermined within the workplace or are
ineffective in creating the changes expected.
The lack of bilingualism, in particular, poses
problems regarding the accessibility of
information. In a world characterised by
fast-paced change, information and data
have been dubbed “the new oil”. Bridging
the gaps between language and accessibilityof information could, therefore, lead to amore proactive stance towards technological

20

changes and create the sense of urgency
necessary to deal with AI and automaton.
The inability to do so could go so far as tohinder the intelligence function of firms,
whereby companies fail to get the signals
early enough or the information necessary toplan for the future.
Hiring the skills of the future“We are hiring differently. We are hiringfor capability, but more importantly foragility and adaptability,” said one CEO in
the Singapore focus group. This was met
with agreement by the other leaders, andall emphasised the need for workers to beable to “unlearn old habits” and to be able toadapt to new technologies and ideas quickly.
From an organisational perspective, senior
executives believed their role to set theexample, and prepare the organisation forchange. “The shadow of the leader always
follows,” said one CEO, who believed indeveloping a culture in his organisation of
deploying new ideas quickly, failing fast andlearning from it to build better prototypes.
“We need to be curious and externallyfocused, and connect to the people atthe edge; we need to more deliberately
communicate that failure is not a bad thing,but that it is important to fail and learn
quickly,” shared another CEO.
Hybridisation of roles
Although “people” and “soft” skills were ranked
the most important among surveyed CEOs,
Tokyo executives agreed on the need fortechnology-savvy workers across all sectors
and industries. If data is indeed the new oil,business people must have the technicalknowledge and knowhow necessary to devise
strategies that effectively use data, AI and theInternet of Things, among other technologies.
Conversely, software engineers and workers
with tech-based backgrounds are expected
increasingly to branch out into management© The Economist Corporate Network 2018

AI, automation and the future of jobs and skills
The role of the CEO in shaping tomorrow’s workplace in Asia

based positions, facilitating a greater
crossover of skills and hybridisation of roles.
Optimising jobs
Executives in the Singapore focus-group
discussion also noted the use of data
analytics and machine learning in helping
senior leaders to make more informed
decisions around market demand, risk andforecasting. Of course, it is not the case thatall parts of the organisation are embracing AI
at the same speed. The Asia head for one of
the world’s largest pharmaceutical companies
said that, at present, technology adoption
is highest at the frontlines of the business,where it is already changing the way sales
representatives interact with the customer.
“We are using AI to help salespeople to plan
their strategy and territory, and to point themin the right direction,” he revealed.
Lagging education systems
At governmental level, moreover, Japan
recognises the lack of resources geared

towards educating students about machinelearning and data analytics. However,the lack of professors qualified to teachsuch courses will require greater global
collaboration across universities in order toprepare students with the right skill set andknowledge for the future world of work.
Similarly, in the focus-group discussionin Hong Kong, a board representative ofa professional association and former
president of a university in mainland China
stated categorically: “education is notkeeping up with trends in automation. For
training students in Hong Kong, we are atleast ten years behind where we shouldbe.” Her recommendation is to add “dataengineering” to university curricula and makesure that managers are trained to adopt tochanging needs for new operating models.
Indeed, few countries/regions have begun toaddress the impact of automation througheducational policy, in part because of the lackof multi-stakeholder dialogue on adapting
educational systems.5

Education is
not keeping up
with trends inautomation, inpart owing to
the lack of multistakeholder
dialogue.

The EIU (2018): The
automation readiness index:
who is ready for the coming
wave of automation?
5© The Economist Corporate Network 201821

AI, automation and the future of jobs and skills
The role of the CEO in shaping tomorrow’s workplace in Asia

Appendix
Participant data

How would you describe the industry of yourcompany? Please choose the most appropriate
one that describes your primary business(eg the largest part of the business).

Where is your firm’s global HQ?
(% of respondents)
1.6(% of respondents)

20.3

14.1
28.1
29.7
14.1

Consumer products
manufacturing
Industrial products
manufacturing
Consumer service
Industrial service
Other

37.5

4.7

Asia
Australasia
EuropeNorth America
South America
Middle East/Africa

35.9

Source: Economist Corporate Network.

14.1
Source: Economist Corporate Network.

Where is the location of the entity that you
manage?

What was your firm’s global revenue for its
latest financial year?

(% of respondents)(% of respondents)

6.3

1.6
6.3

12.5

31.3

7.8
15.6

18.8

Source: Economist Corporate Network.

22

Australia
China
Hong KongJapan
Malaysia
Singapore
South Korea
Other

1.6
6.3
1.6

4.7
9.3

43.8
25.0
7.8

Less than US$10m
US$10m to US$50m
US$50m to US$100m
US$100m to US$500m
US$500m to US$1bn
US$1bn to US$5bn
US$5bn to US$10bn
US$10bn or more

Source: Economist Corporate Network.

© The Economist Corporate Network 2018

AI, automation and the future of jobs and skills
The role of the CEO in shaping tomorrow’s workplace in Asia

What was the revenue for the entity that you
manage (regional/country) for the latest
financial year?

What is the geographical scope of yourresponsibilities?
(% of respondents)(% of respondents)
1.6

10.9

23.4

10.9
14.1

14.1
25.0

Less than US$10m
US$10m to US$50m
US$50m to US$100m
US$100m to US$500m
US$500m to US$1bn
US$1bn to US$5bn
US$5bn to US$10bn
US$10bn or more

Global CEO/president
Regional CEO/president
Country CEO/president

12.5
48.4
39.1

Source: Economist Corporate Network.
Source: Economist Corporate Network.

For how many years have you been an
executive (C-suite)?
(% of respondents)
6.3

7.8
14.1

Up to one year
One to three years
Three to five years
Five years or more

71.9

Source: Economist Corporate Network.

© The Economist Corporate Network 201823

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