Dao Ngoc Dung

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Dao Ngoc Dung
Minister of Labor, Invalids and Social Affairs, Viet Nam and Chair of ASCC Council 2020
26 Jun 2020
Digital Transformation, Education, Labour and Future of Work

The ASEAN Declaration on Human Resources Development for the Changing World of Work has been adopted by the 36th ASEAN Summit in June 2020. Minister Dao Ngoc Dung explains why Viet Nam, as ASEAN Chair, believes preparing the region’s workforce is a priority.

Why is human resources development a priority of ASEAN?

Minister Dao Ngoc Dung

The Fourth Industrial Revolution (4IR), marked by modern scientific and technological advancements, has led to robust development in all areas and the ongoing transformation of the global economy from natural resources-based to knowledge-based. These days, underdevelopment can be addressed through human innovation, which, unlike natural resources, is an unlimited resource.

ASEAN, which has a population of 650 million people, is now the 5th largest economy in the world. Yet, its Member States are at varying levels of human development. The 2019 Human Development Report shows that Singapore, Malaysia, and Brunei have very high human development index (HDI) values (above 0.8); Thailand, Philippines, Indonesia have high HDI values (0.7-0.8); while Viet Nam, Cambodia, Lao PDR and Myanmar are still in the average HDI group (0.56 – 0.9) despite the considerable progress they have made in recent years.

ASEAN is also emerging as a center of development and innovation of the world. Yet, there is high disparity in terms of the human capital index (HCI), a tool that “measures the contribution of health and education to the productivity of the next generation of workers.” The Global Human Capital Report 2017 shows that Singapore, with HCI of 73.28, is ranked 11th in the world. Viet Nam and Indonesia, with a score of 62.19, are ranked 64th and 65th, respectively. Meanwhile, Lao PDR is in 84th place with HCI of 58.36; Myanmar in 89th with 57.67; and Cambodia in 92nd with 57.28.

ASEAN Member States are seeking to improve the quality of their human resources since they are the drivers of innovation and productivity in a knowledge and digital economy. Viet Nam has made human resources development a priority of the ASEAN Socio-Cultural Community and the Economic Community for the same reasons. It is also in keeping with the theme of ASEAN Chairmanship 2020—enhancing a responsive ASEAN—and the stated goals of the ASEAN Charter.

How prepared do you think are Viet Nam’s human resources and those of other ASEAN Member States for the future of work, one that is technologically driven and oriented?

Minister Dao Ngoc Dung

Digital technology and automation are changing ASEAN economies and societies. Many conventional jobs with low productivity are now diminishing, while technology￾based jobs are emerging. Workers equipped with technical skills are poised to take advantage of these newly formed jobs.

A recent research reveals that in the next 10 to 15 years, about one-third of current jobs will change due to the impact of information technology, robotics, automation and artificial intelligence. Moreover, about 40 per cent of global workers will not have job-appropriate skills. Currently, the shortage of skilled workers and skills mismatch have resulted in six per cent GDP loss, equivalent to 5 trillion US dollars globally, every year. If countries concentrate on labour skill development, GDP growth can be boosted by up to two per cent.

Competition will be increasingly intense under a knowledge-based and digital economy. This will require better human resources development to take advantage of regional cooperation on one hand, and withstand or prevail over competition on the other hand.

The ASEAN community, including Viet Nam, recognises that developing human resources through knowledge, capacity and skills building is the foundation for increasing the competitiveness of value chains across different industries of each country. To develop ASEAN human resources successfully, innovation and reforms must be carried out in various areas.

First, vocational education and training must meet the requirements of the labour market, with focus on high-quality skills that match the occupational standards of developed countries. ASEAN Member States must also promote mutual recognition of skills to accelerate intra-regional movement of workers and maximise workers’ contribution to development.

Second, lifelong learning must be encouraged to upgrade skills, maintain employment and adapt to new forms of work.

Third, countries must improve labour market governance to balance and regulate the supply-demand relations better.

Fourth, countries must craft policies that encourage decent work to protect employees’ rights and dignity in the workplace.

What does Viet Nam expect to achieve through the implementation of the ASEAN Declaration on Human Resources Development for the Changing World of Work and its Roadmap?

Minister Dao Ngoc Dung

The development of the ASEAN Declaration on Human Resources Development for the Changing World of Work with a specific roadmap is the result of the consensus of the ASEAN community. It will be the basis of Member States’ efforts and cooperation to develop human resources amid the new trends, developments, and challenges in the world of work.

In implementing this Declaration, Viet Nam and the Member States will have opportunities to develop their human resources according to regional and international standards. Participation in the ASEAN Technical and Vocational Education and Training (TVET) Council and the sharing of knowledge, experiences and good practices on human resources development among Member States as well as non-ASEAN partners are expected to offer valuable insights for Viet Nam and the rest of ASEAN in developing their human resources development for national development even beyond 2030.

What role do you think the private sector plays in improving the competitiveness of ASEAN human resources?

Minister Dao Ngoc Dung

In most Member States, the private sector is the main driver of economic growth and development. The private sector also acts as a lever that can facilitate the upskilling and reskilling of human resources so that companies and workers remain competitive.

For Viet Nam, a transitional economy, the private sector is emerging as the main driving force of economic growth and development, comprising 96.7 per cent of the total number of enterprises nationwide and creating 60.7 per cent of the total jobs in the business sector. Private enterprises in Viet Nam, in particular, and ASEAN, in general, are expanding their participation in production networks, and regional and global value chains.

However, like many others around the globe, Viet Nam and Member States are confronted with a number of challenges, such as the educational qualification of workers, skills underutilisation and skills–jobs mismatch. Thus, job recruiters cannot find suitable candidates to fill employment vacancies even though there are many young adults who are out of work and are actively looking for jobs. About four of 10 employers believe that such mismatch is the reason for their inability to recruit from among the new crop of graduates. This situation limits the region’s capacity to create economic value from their human resources, according to the Human Capital Index Report. Meantime, Mckinsey & Company said that about 40 per cent of young applicants consider themselves unfamiliar with the conditions and requirements of the labour market. Among employed young adults, only 55 per cent can find jobs that are related to their training.

Efforts to develop ASEAN human resources for the changing world of work will not be successful without the participation of the private sector. Member States need to continue improving mechanisms and policies that enhance the leadership of the business sector and industrial sectors in human resources development. They must promote the partnership between the private sector and the government and between the business sector and the vocational education and training system. This cooperation will improve the quality and create a linkage between education and human resources utilisation.

What are the top three areas of investment on human resources by the government of Viet Nam to prepare its national workforce for the future?

Minister Dao Ngoc Dung

Viet Nam prioritises human resources development by involving enterprises, developing labour market, and ensuring social protection. In response to the rapid changes in the world of work, the government of Viet Nam has various priorities to prepare its national workforce for the future, focusing on the following top three investment areas:

(i) Human resources development connected to businesses, 4IR labour markets, and international integration; increasing the number of trained workers, especially highly skilled workers, contributing to the improvement of productivity and national competitiveness.

(ii) Labour market development, with focus on forecasting and identifying labour demand by sector, occupation and qualification, especially future skills and new occupations; enhancing information technology in demand￾supply matching to increase the effectiveness of training and use of the workforce; and promoting decent work.

(iii) Developing a multi-layer and cohesive social protection system, with focus on social insurance, unemployment insurance, medical insurance, and proactive labour market programs to provide timely and effective support for unemployed, vulnerable and disadvantaged workers in finding employment and raising incomes.

Under the theme of cohesive and responsive ASEAN in 2020, Viet Nam, which holds current chairmanship, wishes to collaborate with other ASEAN Member States in developing dynamic human resources who can respond flexibly to the new requirements of the world of work towards ASEAN Vision 2025.