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The Philippines and the Imminent Automation Shift

Automation has been a prominent buzzword in the Business Process Outsourcing (BPO) industry in the Philippines this past year, mostly because it has incited fear about job security, especially in the contact center workforce. But what does automation really mean and how will it affect the BPO industry and the Philippine economy?

Automation is the movement of utilizing artificial intelligence (AI), robotics, and sophisticated systems to replace the human element in jobs that can be taken over by machines. 72% of the BPO workforce is composed of the “lower value” sector, which call center agents fall under. And while this threatens millions of jobs, industry experts are optimistic that there is an opportunity for more growth for the Philippines.

The period of automation has already begun abroad. In the United States alone, the top 1000 companies are already piloting automations. 90% of companies engaged in outsourcing are looking for ways to invest in Robotic Process Automation (RPA), and two-thirds have already partnered with robotic vendors. The US is paving the way for mass adoption and deployment of automation.

In the Philippines, there is a general perception that automation will not be arriving soon, but an estimated one million jobs will be hit within the BPO industry. The majority of these jobs are low-value, meaning they tend to be heavily structured, repetitive, and predictable, as in the call center and transcription services. The remaining 28% are medium- to high-level jobs that require more analysis and decision making will feel the effects of automation much later. However, bidding documents of clients from the United States are already requiring RPA to be used by agents, so the automation is expected to come as soon as new contracts are created and renewed.

What can be done to curb the job loss in the industry? As higher value jobs are not as susceptible to automation compared to the lower value ones, there has to be a focus on the 72% to be trained even more to elevate their work value. The projected rate of the elimination of jobs is much faster than the rate of creating jobs, so it is vital that companies develop a workforce skilled in augmented intelligence—the combination of artificial intelligence and human intelligence—to climb the value chain much quicker. Preventing massive job loss is a matter of preparation.

CEO of A.I. Pros George Yang has partnered with the SM Group and Dado Banatao, a Filipino venture capitalist based in Silicon Valley. He said that they know that the BPO sector is a major growth driver for the Philippine economy, and people in this industry have to be protected and equipped to weather any changes. He said that Filipino agents are known to outperform international counterparts, as exhibited during the development of their automation tools, indicating that Filipinos can acquire millions of jobs from the US, Europe, and other developed countries, possibly gaining billions of dollars for the economy. That is if companies are able to prepare their workforce early to offset the job loss.

He also added that augmented intelligence has no limitations as the technology being imported from Silicon Valley gets smarter each day. Transcription machine learning and voice recognition previously had only around 80% accuracy, but are now close to 100%. AI is meant to outperform humans, but human intelligence coupled with AI is a much better option than just pure AI. Yang also said that his company is developing AI tools which they will be opening to all BPO companies in the Philippines. They encourage these companies to use their technology with their existing workforce expected to be automated, to acquire a high standing in the value chain, and ultimately to save the industry from being crippled by massive job loss. There is still an opportunity in automation for the Philippines to sustain its reputation as one of the largest outsourcing hubs in the world.

Flat Planet sees this automation shift as an opportunity for growth in productivity. There are particular automation tools that Flat Planet already uses, such as Xilch, which is an online bookkeeping service that manages invoices and accounts payables with precision, all in the cloud. Testimonials from both the Australian and Philippine teams say that Xilch has increased productivity, ultimately giving more success for Australian companies, and more jobs for Filipinos.

History tells us that there is nothing to fear when new technology looms in the horizon. The Luddites in Britain during the Industrial Revolution were strongly opposed to new technology, not realizing that machines are productivity multipliers. The industrial revolution eventually pulled the country out of poverty and the Luddite resistance diminished. As a company, Flat Planet believes that new technology such as AI should not be feared but embraced as technology is always a pathway to a better future. And for the Philippines, this new automation ultimately spells out better living standards for all those who work specifically in the BPO industry, as well as the millions of Filipinos who are part of this burgeoning economy.

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