KUALA LUMPUR: Automation and artificial intelligence (AI) advancements are expected to reshape professional sectors in the labour market in the coming years.
Economist Dr Geoffrey Williams said there will be a huge hollowing out of many currently high qualification and high paid sectors.
"Automation and AI will likely replace millions of jobs in professional work particularly.
"Accounting for example will be automated through e-invoicing which also tracks transactions through the blockchain, so accountants and auditors will be less in demand," he told Business Times in an interview at Bank Negara Malaysia's (BNM) Sasana Symposium 2024 here recently.
To counter this, Williams said that re-skilling in technology-resistant jobs will be necessary.
He added that freeing up the labour market and encouraging micro-enterprises as alternatives to formal jobs will be essential. "This is not the job of the government; it will be driven by the market and by individual choices.
"People are already doing this, and millions of people are in the informal or gig-economy, almost as many as in formal employment," he said.
On that note, Williams said deregulation of the labour market is necessary to create an agile, competitive and market-driven environment.
He emphasised that focusing on new ways of making a living is essential.
"The government has no role to play in this, the market is already solving it. Education and training do not create jobs.
"If the jobs are not available then more education and training will just create more underemployment," he added.
Speaking on the challenges in Malaysia's labour market necessitate reform, Williams said there is a great deal of underemployment in Malaysia with almost two million people over-qualified for the jobs they have.
He also noted that wages in the country are very low and this causes problems, half of private sector employees earn less than RM2,900 per month and a big portion of that.
"We also see issues such as poor terms and conditions of work are still far too common including long hours, inflexible working conditions, poor opportunities for career development and 'boss knows best' top-down management.
"For all of these reasons many people are leaving formal employment and choosing better options in the informal market.
"This is a revealed preference and people are doing this out of free choice because options are better if they are not formally employed," he noted.
Therefore, Williams said the government should acknowledge this and design policy in-line with this reality rather than pushing to regulate the informal or gig-economy.