Name

: Hilda Saputra
Country: Lithuania
Committee: International Labour Organization (ILO)
Topics: Mitigating the Negative Impacts of Automation on Employment in Developing Countries

The formidable technology development is reshaping our society into a digital society. Without a
doubt technology have a profound impact on our society and the economy. The technology
breakthroughs in the form of artificial intelligence and automation indeed have potential to bring
benefits towards the economy. They can help increase the productivity and improve the quality of
goods, while reducing operation cost. However, there are some concerns that industrial automation
may lead to the displacement of a significant number of human workforce. According to PWC
(2018), certain sectors such as manufacturing, transportation and storage will have the highest rates
of automation by 2030, while health and education sectors are predicted to have the lowest
automation rates. In addition, professionals and senior manager are estimated to face much lower
risk of automation compare to low-medium skilled job such as machine operator and assemblers.

Lithuania is on the rapid move towards industrial automation. The country is expected to have
reform on the employment structure as several automation technology giants continue to expand
their businesses in Kaunas and other major cities (Invest in Lithuania, 2017). Some might argue that
the automation will threat the existence of human workforce. However, in countries like Lithuania
where ageing population can be foreseen in the near decades (Valalytė, 2016), automation might just
become the right solution. According to Fitzgerald (2018), the deployment of automation is higher in
the countries where young and middle aged workers are scarce. In such countries, industries, which
rely heavily on middle age workers (25-50), use automation to cope with the scarcity and boost the
productivity. As a matter of course, the wave of automation will shift the labor demand in Lithuania.
Valalytė (2016) forecasted that automation in Lithuania will lead to the declining of low-skilled labor
demand and the rise of high-skilled labor demand to create and manage the automation technology.

Understanding the potential of employment displacement by automation, Lithuania proposes 4 main
solutions, which include as follows:
1. Lithuania believes that automation is inevitable, hence automation shouldn’t be restrained,
but instead it should be embraced and contained at the same time. The main focus for both
policy maker and private sectors will be preparing the workforces for automation by
upgrading their skill based on the demand. Skill training is important to ensure that
workforces can adapt and work with the latest technology in a complementary way. The key
success is determining new skills that are in accordance with the new labor demand such as
skills related to the creation and management of advanced technologies.

2. We also suggest on finding new employment opportunities and allocating the human
workforce into sectors that has a low risk of automation such as in health sector. According to
Valalytė (2016), the demand of health and palliative care sector will increase as the
population in Lithuania continues to age. However, recent study shows that Lithuania is facing
shortage of labor in health sector. Allocating the workforce into health sector will not only
help move the unemployment caused by the automation, but also solve the shortage of labor
problem. In addition, government side by side with private sectors can invest more on health
sector to create more of job opportunities as well as improving the quality of goods and
services in the health sector.


 3. Education system reform will help our society adapt to the new age of automation starting
from the early stage. As the employment structure is shifting, the education sector should
focus more on STEM, while at the same time balancing with the soft skills to ensure the
development of digital knowledge and technical skills as well as reinforce innovation and
creativity in youth.

4. Lithuania propose that policy makers start enhancing the social safety net to support labors
during the transition of automation. Some might not be able to cope with the wave of
automation. A strong the social safety net will help and protect labors, who are induced into
displacement or early retirement by automation, adjusting during transitional periods. We
suggest that social safety net program to focus on unemployment insurance and pension plan
program.



REFERENCE

Fitzgerald, J. (2018, July 20). Are Workers Get Older, Are Robot the Answer? Retrieved from
www.weforum.org: https://www.weforum.org/agenda/2018/07/automation-can-be-a-
response-to-an-aging-workforce

Invest in Lithuania. (2017, April 5). German Automation Technology Giant to Double its Service Centre
in Kaunas. Retrieved from Invest in Lithuania: https://investlithuania.com/news/german-
automation-technology-giant-to-double-its-service-centre-in-kaunas/

PWC . (2018). Will Robots Really Steal Our Jobs? An international analysis of the potential long term
impact of automation. PricewaterhouseCoopers.

Valalytė, L. (2016). Lithuania and Labour Market Trends of 2016. Review and The Short-Term
Prospects. Lithuanian Labour Exchange under the Ministry of Social Security and Labou.