a low unemployment rate averaging 3. 5 % over the past two decades. however, there is a continued reliance on low - cost, labourintensive business models as our core competitive advantage. this has constrained wage and productivity growth. in 2023, 57 % of workers were classified as semi - skilled and 12 % as low - skilled. wage growth and productivity gains have relatively been sluggish. bnm's study found that post - pandemic, the median starting salary is lower by more than 20 % at rm1, 624 in 2022 than pre - crisis at rm2, 066 in 2019. the difference 1 / 3 bis - central bankers'speeches in median starting salary of graduates and non - graduates also narrowed to rm101 per month in 2022 from rm568 in 2018. therefore, the pragmatic adoption of technology can be a game - changer for our economy, both in terms of productivity gains and improved competitiveness. here's another perspective : traditional product life - cycle theory suggests that " laggard " firms grow by imitating the technology and practices of the " frontrunners " in the industry. 3 over time, the gap narrows. however, there is an emerging view that the technology revolution may bring opportunities for nimble " laggard " firms that are unconstrained by legacy costs to leapfrog technologically. and we are increasingly seeing this from fashion to finance, where new firms using technology are disrupting legacy traditional firms. i therefore urge our local firms to try and adopt technological progress. in this regard, bnm has set up a rm2. 6 billion high - tech and green facility as well as a rm1. 3 billion sme automation and digitalisation facility in order to facilitate the technology upgrades of malaysian firms. i have no doubt that ai will lead to large - scale disruptions. and that these disruptions can stretch our collective capability to adapt. and here's my third point : there is a role for policy to maximise the technological opportunities, while minimising the risks. a khazanah research institute study in 2017 estimated that more than half of current jobs in malaysia are at high risk of being affected by automation within the next two decades. 4 bnm's survey of 25 financial services institutions5 found that 84 % of these institutions have at least one ai project in active use. ai is transforming tasks like customer analytics, digital onboarding, and

marzunisham omar : future of work in east asia - jobs and technology opening speech by mr marzunisham omar, deputy governor of the central bank of malaysia ( bank negara malaysia ), at the " future of work in east asia : jobs and technology " workshop, organised by the asian institute of chartered bankers, kuala lumpur, 11 november 2024. * * * when we talk about ai, machine learning, and automation, it is natural to focus on what these innovations can offer. yet, many policymakers face a delicate challenge in managing the impact of technological advancements on jobs, and therefore, livelihoods. on this, let me touch on three points. first, technological advancement is a constant feature of our modern economy, and the pace of technological change will, in my opinion, accelerate. it took around 20 years for the internet to reach more than 80 % household adoption in the united states. 1 but it only took 8 years for smartphone usage to achieve the same. now, improvements in large language models are felt annually, if not sooner. while each new wave of technological advancement brought major shifts in the types of jobs available, the net impact has been more and better jobs. our living standards have also improved dramatically. deloitte's 2014 study of occupational census data in england and wales dating back to 1871 found that technological advancement led to the decline of'muscle power jobs '. but it also found an increase in'caring professionals'jobs such as health and teaching professionals. however, there are valid concerns that today's technological progress is different. ai and quantum computing are allowing for unprecedented innovations in fields from communications to cybersecurity. while past innovations displaced jobs defined by routine tasks such as assembly line work, today's potential disruptions extend to cognitive and non - routine tasks. the imf estimates that almost 40 % of global employment is exposed to ai. 2 it suggests that even'skilled'jobs will need to adapt to new technologies. we cannot even rule out that one day genai might take over the jobs of many of us in this room. this brings me to my second point : in the face of such rapid change, we can choose how we respond to it. at this stage of our economic development, malaysia has so much more to achieve. as such, we can neither afford to be fearful of technological progress, nor can we be passive by - standers in face of the technology revolution. malaysia's has historically experienced