Two forces of change that threaten Hong Kong jobs

Janet Pau identifies global trends that should worry those steering the Hong Kong economy: a reversal of globalisation, in favour of protectionism, and technological advancements that are making traditional jobs obsolete

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Janet Pau

Published: 5:14pm, 24 Jan 2017Updated: 8:53pm, 24 Jan 2017

The rapid adoption of systems powered by artificial intelligence will reshape the human job landscape more quickly than most societies are able to comprehend. Illustration: Craig Stephens

Two forces of change will define 2017, to which Hong Kong is not immune. In the next five years, the chief executive will need to lead Hong Kong through a time of “deglobalisation” and rapid automation, and ensure the city creates enough jobs for economic prosperity.

First, the global economy is facing a trend of “deglobalisation”. Trade growth is at its lowest since the global financial crisis in 2008, due in part to weaker global demand and slowing investment. Given the antiglobalisation sentiments that led to Britain’s vote to leave the European Union and the election of Donald Trump in the US, the outlook is likely to remain bleak. Protectionism is on the rise. In addition, Hong Kong is also vulnerable to slowing growth in the Chinese economy, as it makes a transition to a consumption-led model. Jobs in industries supporting trade and investment are at risk as a result.

Job prospects for new Hong Kong graduates decline

People watch a TV screen showing the live broadcast of the Google DeepMind Challenge Match in Seoul, South Korea, in March last year. DeepMind has already beaten some of the world’s best Go players. Photo: AP

Why 2017 will be Asia’s year for artificial intelligence

At the same time, Hong Kong’s economy is subject to a second force – the accelerating use of artificial intelligence (AI). In 2016, intelligent virtual assistants and neural machine translation went mainstream, and Google’s Go-playing AI beat some of the best human players. The rapid adoption of AI-powered systems that can be trained to recognise more complex speech and images, reason, and perform various work activities will reshape the human job landscape more quickly than most societies are able to comprehend.

According to a University of Warwick study, it is technically possible to automate a third to half of all current jobs. In Hong Kong, the impact on jobs can be directly felt in the banking and finance industry, where fintech, or financial technology, is on the rise. The automation and digitisation of industries in China also has knock-on effects on jobs in transport, logistics, retail and business services in Hong Kong.

Don’t fear the robots; they won’t kill jobs

As Hong Kong navigates this era of uncertainty, a new social compact needs to be forged, addressing the interests and needs of those who are left behind or experiencing downward mobility. When whole categories of jobs and whole industries are being eliminated, displaced middle-class workers, and even young graduates and professionals, will struggle to make ends meet. A programme to provide temporary basic income could be piloted on a diverse group, including employed and unemployed people, followed by analysis of how it affects recipients’ financial health and behaviour. Funding could come from venture capital, crowdfunding, and savings from reductions in social programmes with redundant benefits.

While technology should be embraced and adopted, it also needs to serve people broadly and not just a small group of winners

In addition, businesses can be encouraged to set up corporate universities that retrain workers for jobs that are needed