New technologies drive job creation despite economic headwinds

The report, released during an online conference on Tuesday, reveals that despite concerns over automation-related job losses, the adoption of industrial robots and artificial intelligence (AI) has led to unexpected employment growth in the region.

"Between 2018 and 2022, the integration of robotics into manufacturing processes generated approximately 2 million skilled positions in formal employment sectors," said World Bank East Asia and Pacific chief economist Aaditya Mattoo. "While this technological shift did displace about 1.4 million low-skilled workers, the net effect on employment has been positive, particularly in driving the creation of higher-skilled roles."

Technology and Labour Market Transformation

The report presents a nuanced picture of technological impact across the region. The prevalence of manual task-based work in East Asia and Pacific (EAP) means that a smaller proportion of jobs face AI-related displacement compared to advanced economies. 

However, the region faces its own unique challenges, as only 10% of regional jobs involve tasks complementary to AI, compared with approximately 30% in developed nations.

"The region faces a critical challenge in bridging the skills divide. To fully capitalise on the productivity benefits of new technologies, we must prioritise upskilling and reskilling initiatives across all sectors," Manuela V Ferro, World Bank vice-president for East Asia and the Pacific, noted.

Regional Economic Outlook

Against this backdrop of technological transformation, the World Bank projects overall regional growth at 4.8% in 2024, moderating to 4.4% in 2025. China, the region's largest economy, is expected to see growth decline from 4.8% this year to 4.3% in 2025, affected by property market weakness and structural challenges.

Growth in other regional economies is forecast to increase from 4.7% in 2024 to 4.9% in 2025. This growth is expected to be supported by several factors working in concert: a marked rise in domestic consumption, a steady recovery in goods exports, and a significant resurgence in tourism across the region.

Thailand's Technology Transition and Economic Prospects

Thailand's outlook reflects both opportunities and challenges in this technological shift. The World Bank forecasts real GDP growth of 2.4% in 2024, primarily driven by private consumption recovery and tourism resurgence.

"Thailand stands at a crucial junction in its economic development. While the country has shown readiness to embrace technological advancement, it must accelerate its adaptation to remain competitive. The rebound in consumption and tourism is encouraging, but long-term growth requires decisive reforms, particularly in digital transformation and workforce development," Mattoo explained. 

Several key factors are currently affecting Thailand's economic outlook. The country is experiencing a cautious uptick in goods exports and fiscal spending, though recent floods in northern Thailand pose significant challenges to the agricultural sector.

Inflation remains subdued, with a July headline rate of 0.8%, while persistent high household debt, which stands at nearly seven times average income, continues to constrain consumer spending.

Future Trajectory

The report emphasises that the region's traditional development model, heavily reliant on labour-intensive production and open global markets, faces unprecedented challenges from both technological disruption and trade tensions.

"East Asia's path forward lies in embracing technological change while ensuring inclusive growth. The best strategy is twofold: deepening trade agreements whilst equipping people with the skills and mobility to harness new technologies effectively," Mattoo stressed.

As the region navigates this complex landscape, the World Bank underscores the critical importance of several key initiatives. The report advocates for substantial investment in digital infrastructure, alongside comprehensive reforms to education systems to meet future skill demands. 

Additionally, it emphasises the need to foster innovation-friendly regulatory environments that can support and accelerate technological adaptation.