Digital Work in East Asia

Abstract

Recent developments and the actual status regarding Digital Work are described for the East Asia/Pacific region, based on data and analyses available for the region. This includes aspects like decent work, the effects of digital technologies on tasks, competences, labor market opportunities, the effects of digital work and labor platforms, and issues of gender (in)equality. Challenges and political actions taken by national governments are described by looking at the example of Taiwan, one of the most advanced economies in East Asia and worldwide.

1 Introduction and Background

1.1 Decent Work in the Asia-Pacific Region

In their Asia–Pacific Employment and Social Outlook 2020, the International Labour Organization (ILO) describes the impact of the COVID-19 pandemic with respect to the, as they perceive it, weak foundations of decent work and inclusive growth in many Asia-Pacific economies (ILO 2020). Even before the pandemic, employment growth did not keep pace with general economic growth in the region, and labor income shares stagnated or decreased. Only in East Asia, where most of the advanced economies of the Asia-Pacific region are located, the average annual labor income share grew marginally in the period between 2011–17. In the other subregions – South-East Asia, South Asia, and Pacific Islands –, labor income shares fell in that period (ILO 2020). Whereas on the one hand, well-paid high-skill work was pushed by foreign investment and the development of urban centers, there is still, on the other hand, a high percentage – 68% of the total workforce – of low-wage workers in the informal sectors of the regional economies. Of the world’s 2 billion informal workers, 1.3 billion live in the Asia–Pacific region (ILO 2020). As collateral of this, labor market institutions and means of collective bargaining are generally weak in the region, which contributed to workers’ vulnerability as they were confronted with the COVID-19 crisis. Consequently, dramatic losses of working hours, jobs, and, correspondingly, labor income have occurred during the pandemic, with the worst losses in South Asia. Due to this crisis, there are an estimated 20–25 million additional poor working people in the Asia-Pacific region. Losses in working hours/jobs affected women and young people (15–24 years) above average (ILO 2020). Governments in the region have tried their best to compensate and help companies to retain workers. But, as advanced economies have much more resources for crisis response and compensation measures than low-income economies, inequalities in the region have risen (ILO 2020).

For future development, the ILO Asia–Pacific Employment and Social Outlook 2020 refers to the Sustainable Development Goal (SDG) 8 for “sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all” (ILO 2020; UN online). As a corresponding pathway towards social inclusion and decent work, action is recommended towards the human-centered future of work outlined in the ILO Centenary Declaration for the Future of Work and its three areas (ILO 2019a,b;2020):

• (i) increasing investment in people’s capabilities

• (ii) increasing investment in the institutions of work and

• (iii) increasing investment in decent and sustainable work.

1.2 Technology Affecting Jobs in Asia

In their Asian Development Outlook 2018, the Asian Development Bank focused specifically on how technology affects jobs. Concerning job losses due to new technologies, the report states that there is a very low probability of jobs being replaced by automation (ADB 2018, p 66ff). There are, however, substantial changes regarding tasks and respective skills due to digitalization effects.

Table 1 shows five categories of tasks occurring in a variety of occupations, which are subject to changes in their relative importance during the digitalization process.

Table 1. Categories of tasks within occupations and industries (ADB 2018, p. 90)

Some of these different task categories become more, others less important in the process of digitalization. Figure 1 shows, for selected Asian economies, the annual growth rates of employment depending on the intensity of the respective task categories in the respective jobs. Data are also shown separately for all workers – wage and self-employed together – and for wage workers alone. As an example, employment in Indonesia – considering all workers – grew in jobs with a high intensity of nonroutine cognitive tasks, whereas employment contracted in jobs with a low intensity of nonroutine cognitive tasks (Fig. 1, upper left; ADB 2018, p. 89ff). For Indonesian wage workers alone, employment in jobs with a low intensity of nonroutine cognitive tasks did not contract, but grew considerably less than employment in jobs with a high intensity of nonroutine cognitive tasks.

Fig. 1.

Annual employment growth by task intensity (selected Asian economies, own illustration base on ADB 2018, p. 92)

The general pattern shows that ….

• … occupation grows most in jobs with a high intensity of nonroutine cognitive, socially interactive, and ICT tasks, and a low intensity of manual tasks, whereas …

• … occupation grows less or even contracts in jobs with a high intensity of manual tasks.

In a similar line of analysis, Khatiwada and Veloso (2019, ADB 2018) analyzed emerging occupations in selected Asian countries by identifying new job titles. Figure 2 shows that these emerging occupations are especially prevalent in ICT and other science and technology-based domains. Wages also tend to be higher in occupations with new as compared with occupations with old titles. This emergence of new occupations is also one of the reasons for the assertion mentioned above, that a reduction of employment – across all occupations – due to automation is not very probable.

Fig. 2.

source: Flaminiano et al., forthcoming)

Occupations with the highest proportion of new job titles (selected Asian economies, own illustration based on ADB 2018, page 86, data

1.3 Work and Wellness

In the context of the COVID-19 pandemic, the Asian Development Bank focuses – in their Asian Development Outlook 2020 Update: Wellness in Worrying Times – on the issue of wellness as a crucial factor for maintaining physical and mental health, and for past pandemic recovery (ADB 2020b).

In the report, four cross-cutting wellness policy domains are distinguished (ADB 2020b, p. 117ff):

• 1. Create a healthy built environment

• 2. Enable and support physical activity

• 3. Encourage healthy eating

• 4. Enhance wellness in the workplace

In their background paper on workplace wellness to this report, Yeung and Johnston (2020) perceive Asia’s workforce as ‘unwell’, based, among other sources, on comparative occupational health and safety data, which show a worse status in Asia as e g. compared to OECD countries (cf. also Fan et al. 2020). There is a strong tendency towards excessively working overtime in East Asia, with different patterns across countries: In Japan, for example, the higher, managerial ranks of the workforce are more affected by excessive overwork, whereas in the People’s Republic of China, this holds more for low-rank, low-skilled workers (Tsai et al. 2016). This excessive overwork appears to be a crucial precondition for cardiovascular diseases (Chang and Lin 2019).

As a holistic framework for workplace wellness, Yeung and Johnston (2020) suggest a fourfold approach:

• 1. Ensure physically safe working conditions and healthy work environments.

  • a. Reduce hazards and prioritize safe and healthy work conditions

  • b. Create healthy and wellness-enhancing (built) work environments

• 2. Promote healthy behaviors at work

  • a. Use design (e.g. ergonomic design of tools, equipment, and work systems) and amenities (e.g. on-site fitness facilities) to drive healthy behaviors during the workday

  • b. Cultivate healthy relationships and encourage friendships among colleagues

• 3. Cultivate a healthy work culture

  • a. Recognize and mitigate overwork and stress

  • b. Integrate wellbeing into leadership

  • c. Align work with personal values, intrinsic motivations, and purpose

• 4. Support healthy habits outside work

  • a. Address diverse employee needs and cultural contexts

  • b. Extend wellness benefits beyond immediate employees to families and community issues

1.4 Digital Work and Labor Platforms in Asia

Digitalization has made it possible to source/outsource tasks globally. In Asia, especially India, the Philippines, and Pakistan receive a substantial inflow of work and earnings from abroad, via freelance platforms (Fig. 3).

As defined in the ILO World Employment and Social Outlook 2021, “Digital labour platforms can be classified into two broad categories: online web‑based and location‑based platforms. On online web-based platforms, tasks or work assignments are performed online or remotely by workers. These tasks may include carrying out translation, legal, financial and patent services, design and software development on freelance and contest‑based platforms; solving complex programming or data analytics problems within a designated time on competitive programming platforms; or completing short‑term tasks, such as annotating images, moderating content, or transcribing a video on microtask platforms. The tasks on location-based platforms are carried out in person in specified physical locations by workers and include taxi, delivery and home services (such as a plumber or electrician), domestic work and care provision” (ILO 2021b, p. 1).

Fig. 3.

Inflow of work and earnings via freelance platforms (own illustration based on ILO 2021a, p. 45, data collected by Fabian Braesemann, Oxford Internet Institute, iLabor project. For country codes, please see referenceFootnote

Country codes: Albania (ALB), Algeria (DZA), Argentina (ARG), Armenia (ARM), Australia (AUS), Bangladesh (BGD), Belarus (BLR), Benin (BEN), Bolivia, Plurinational State of (BOL), Bosnia and Herzegovina (BIH), Brazil (BRA), Bulgaria (BGR), Cameroon (CMR), Canada (CAN), Chile (CHL), China (CHN), Colombia (COL), Costa Rica (CRI), Croatia (HRV), Cyprus (CYP), Denmark (DNK), Dominican Republic (DOM), Ecuador (ECU), Egypt (EGY), El Salvador (SLV), Ethiopia (ETH), Finland (FIN), France(FRAU), Georgia (GEO), Germany (DEU), Ghana (GHA), Greece (GRC), India (IND), Indonesia(IDN), Ireland (IRL), Israel (ISR), Italy(ITA), Jamaica (JAM), Japan (JPN), Kazakhstan (KAZ), Kenya(KEN), Madagascar (MDG), Malaysia (MYS), Mauritius(MUS), Mexico (MEX), Morocco (MAR), Nepal (NPL), Netherlands (NLD), New Zealand (NZL), Nicaragua (NIC), Nigeria (NGA), North Macedonia (MKD), Norway(NOR), Pakistan (PAK), Peru (PER), Philippines (PHL), Poland (POL), Portugal(PRT), Republic of Moldova (MDA), Romania(ROU), Russian Federation (RUS), Saint Lucia (LCA), Senegal (SEN), Serbia (SRB), Singapore (SGP), Slovakia (SVK), South Africa (ZAF), Spain (ESP), Sri Lanka (LKA), Sweden (SWE), Thailand (THA), Tunisia (TUN), Turkey (TUR), Uganda (UGA), Ukraine(UKR), United Arab Emirates (ARE), United Kingdom (GBR), United States (USA), Uruguay (URY), Venezuela (VEN), Viet Nam (VNM).

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According to the ILO World Employment and Social Outlook 2021, about 96% of the investment in digital labor platforms is concentrated in Asia (US$56 billion), North America (US$46 billion), and Europe (US$12 billion), compared to 4% in Latin America, Africa and the Arab States (US$4 billion) (ILO 2021a, p. 20).

The demand for work on online web‑based platforms largely originates from developed countries, while the labor supply originates predominantly from developing countries (ILO 2021b, p. 3). Furthermore, “Digital labour platforms globally generated revenue of at least US$52 billion in 2019. About 70% of the revenues generated were concentrated in just two countries, the United States (49%) and China (23%), while the share was much lower in Europe (11%) and other regions (17%)” (ILO 2021b, p. 3).

The rise of digital labor platforms has provided new opportunities for work, earnings, and livelihood, predominantly for workers in developing countries. At the same time, it has brought about challenges for workers, e.g. …

• … “regularity of work and income,…

• … working conditions, …

• … social protection, …

• … skills utilization, …

• … freedom of association …

• … and the right to collective bargaining” (ILO 2021b, p. 2).

As a way forward to improve the status and rights of digital platform workers, it has to be taken into account that digital platform work is by its very nature international and cuts across different legal and administrative systems. The ILO Maritime Labour Convention, set up in 2006, can be regarded as a precedent as it concerns, in a similar way, an industry with multiple parties operating across different jurisdictions (ILO 2021b, p. 9).

The People’s Republic of China is one of the world’s largest platform economies, which, as described above, also holds for digital labor platforms (Chen 2021). Unlike in Western countries, digital platforms and platform work have been promoted by PRC’s government and state-sponsored media (Chen 2021, p. 6). Furthermore, “whereas Western platform models were construed as primarily a business solution, the developer of China’s first platform, K68.cn, viewed platform work in China as a mutually beneficial exchange that came to be known as ‘Witkey,’ a term derived from a combination of the words ‘wisdom’ and ‘key,’. He envisioned platforms as providing an infrastructure to effectively match those in need of wisdom, ideas, input, or assistance with the sources that could provide the ‘keys’ in the form of solutions” (Chen 2021, p. 6). Chinese digital labor platforms also offer a type of service – craft and assembly work– usually not found on Western digital labor platforms; this work is typical industrial work, but mediated by a digital platform (Chen 2021, p. 7).

A survey performed on behalf of ILO with more than 1,000 participating Chinese digital platform workers found that Chinese digital platform workers, as compared with their Western counterparts, are more dominantly male (about 70% of all digital platform workers) and a bit younger (25–27 years) (Chen 2021, p. 13).

One issue to be solved in the future is fees for the platform services charged by the platforms to workers, thus reducing their income. In China, some platforms additionally require workers to provide a guarantee deposit, which might be confiscated if the work is not done sufficiently. This practice of charging fees is in conflict with international labor standards (Chen 2021, p. 39).

Wood and co-authors (2019) investigate the social situation of digital workers in the gig economy in Southeast Asia and Sub-Saharan Africa. They find two sides of social (dis)embeddedness of digital platform workers. On the one hand, they are normatively disembedded from labor regulations, workers’ rights, collective bargaining, and social security systems, as their work is largely commodified. On the other hand, they are embedded in trust-based networks with other digital platform workers and clients.

1.5 Gender Issues

Labor market participation is generally lower for women as compared to men. Additionally, motherhood and fatherhood have very different effects: While fathers’ employment rates tend to be higher than those of men without children, mothers’ employment rates are lower than those of women without children (Fig. 4). A major factor behind these differences is the uneven distribution of unpaid work, especially care work. While more than 50% of women who are not participating in the labor market indicate unpaid care work as the main reason, this holds only for less than 10% of men staying outside the labor market; while unpaid care work is the most important reason for women to stay outside of the labor market, it is the less important for men, for whom reasons like being in education, sick or disabled are more important (UNESCAP 2019, p. 18).

Fig. 4.

Male and female employment-to-population ratios, by motherhood/fatherhood and world regions (own illustration based on UNESCAP 2019, p. 20, data collected by ILO, 2018). ESCAP: Regions in Asia and the Pacific as defined by the United Nations Economic and Social Commission for Asia and the Pacific.

While the differences between male and female employment-to-population ratios are bigger in Asia and the Pacific as compared to Europe (and also, to a lesser extent, as compared to the Americas), they are very close to the world averages (Fig. 4).

Huge differences, however, become evident when Asian/Pacific subregions are differentiated (Fig. 5). While the gender gap in employment is rather small or moderate in the Pacific Islands (below 10 percentage points) and East Asia (between 10 and 20 percentage points), it is very big in South Asia (over 50 percentage points).

Fig. 5.

Male and female employment-to-population ratios, by Asian/Pacific subregions, 2019, percentages (own illustration based on ILO 2020, p. 3)

This pronounced gender gap in South Asia can be at least partially explained by the so-called Indian paradox: While educational achievement of women is rising, women’s employment is declining (Chatterjee et al. 2018; Desai, Joshi 2019). In India, the relationship between the education level achieved by women and their labor market participation is U-shaped: It declines from low to moderate education levels, and then rises from moderate to high levels of education. Based on their research, Chatterjee and co-authors suggest several reasons for this – seeming – paradox:

• 1. A medium level of education allows women to marry well-educated men with higher incomes, which allows them to withdraw from the labor force; there is strong empirical evidence for this income-effect.

• 2. Also, there might not be enough salaried positions being perceived as suitable by women with intermediate education levels. In this context, the curvilinear relation between women’s education levels and labor force participation appears to be the integral of three linear relationships, two negative and one positive: A negative relationship for work in family businesses and farms, also a negative relationship for wage work, and a positive relationship with salaried work.

• 3. Furthermore, culturally determined gender norms attribute higher status to non-working women.

Although the female employment-to-population ratio is higher in South Korea than in India, it is still the lowest among OECD member countries. Especially for highly educated women, the employment rate of Korean female college graduates is the lowest (about 60%) among OECD nations with the widest gender gap of almost 30 percentage points between male and female graduates (Kang, Wang 2018).

Korean – and Japanese – women often interrupt their careers when becoming mothers, then returning to work in their mid-forties, when their children attend school. Consequently, their labor force participation pattern over time resembles the letter M, in contrast to the inverse-U-shaped curve found for women in developed Western countries. After their career interruption for childcare, they tend to be offered positions on a lower level as compared to their earlier positions. For highly educated Korean women, the career curve may even be L-shaped: They cannot find suitable employment at all after their career interruption, which then turns out to become a career termination (Kang, Wang 2018; Jung 2018). Wang and Kang (2018) – in a qualitative research approach – look into the specific challenges for married, highly educated Korean mothers to achieve work-life balance. Two challenges are salient: Firstly, the traditional, Confucian values regarding marriage and family strongly emphasize women’s roles in the domestic context, as spouses and mothers. Secondly, work culture in Korea – with excessive overtime, after-work socializing, company dinners, etc. – is oriented towards male breadwinners with a minimum of domestic – household, family – obligations, or none at all. Married, highly educated Korean mothers need resources to navigate these challenges. Often, these resources – in terms of time and energy – are not provided by their husbands, but rather by their mothers and mothers-in-law, who invest and engage heavily to take major responsibilities in caring for their daughters’ or daughters’-in-law children – up to raising them completely in their own homes during the week. Finally, Wang and Kang (2018) articulated some optimism with respect to the younger Korean generation, where these cultural norms tend to change, and where young fathers are more prepared to take responsibility to care for their children.

Another source of optimism might be specific effects of digitalization on the situation of female workers (Chun and Tang 2018). The authors find – for the economy of Vietnam – that companies’ adoption of broadband internet and similar ICT increased their relative demand for female and college-educated workers. This effect is specifically strong in sectors heavily relying on manual tasks; here, ICT tends to replace these manual tasks, predominantly performed by male workers, by more non-routine and communicative tasks, where women have a comparative advantage. In sectors with the highest demands for technical ICT skills, however, this trend is weaker, highlighting the need for more participation of women in STEM² education.

1.6 Key Challenges and Policies in Taiwan

After this general overview of digital work in Asia, Taiwan will be considered in more detail as a case study. Taiwan is among the most advanced economies in Asia and worldwide. Consequently, Taiwan’s digitalization strategies focus on maintaining and fostering this advanced position. In a cross-departmental approach, Taiwan has addressed …

• … talent development for advanced digital technologies, especially AI,

• …increased research activities, especially in international contexts,

• …bringing together talents, research institutions, and industry to boost innovation, with a special emphasis on tailored support for small and medium enterprise (SMEs) and …

• … providing a favorable legal and regulatory framework.

As a world-leading semiconductor manufacturer, a core issue of Taiwan is to promote AI-on-Chip technologies, to further develop the country’s competitive edge. This is a core aspect of the strategic approaches mentioned above.

2 In-Depth Analysis: Taiwan

2.1 Trends in Beneficial Infrastructure and Smart City for Digital Innovation

According to the 2021 World Competitiveness Yearbook released by the Switzerland-based International Institute for Management Development (IMD), Taiwan has emerged as the eighth most competitive economy (Taiwan News 2021). Digital economy and COVID-19 have increased the demand for digital technologies and also pushed the government to increase the pace toward digital transformation. For Taiwan, key opportunities will arise from the incoming need for facilities, services, and talent. Reassessing the use of applications such as remote technology, AI (artificial intelligence), big data, IoT (Internet of Things), and hybrid cloud infrastructure is a must for all sectors to sharpen their adaptive abilities in these ever-changing times. Taiwan’s broadband infrastructure is near mature after a series of Information and Communications Technology Initiative (ICT) policy promotions. To compete with other advanced countries in the development of innovative applications and services, Taiwan is continuously optimizing broadband infrastructure, intending to complete the ICT ecosystem in Taiwan, thereby promoting the development of the digital economy.

In 2017, the Executive Yuan³ started promoting the Digital Nation and Innovative Economic Development Program (also known as “DIGI⁺”) as an administrative blueprint for leading digital development and innovation. The goals of the DIGI⁺ program (Development, Innovation, Governance and Inclusion) and the Smart Cities/Townships Regional Innovation Action Plan are to promote urban and rural joint ecosystems and create high quality of life for sustainability. The future appearance of smart cities/townships includes environmental sustainability, convenient transportation, safety and disaster prevention, and regional innovation. The expected benefits include the expansion of Taiwan’s digital economy to US$213.73 billion, the penetration rate for broadband internet connections of 2 gigabits per second will be rolled out to cover 90% of users, and citizens will be guaranteed the basic right to 25 megabits per second broadband service (BOST 2018). With a shift in focus toward IoT technology, Taiwan’s domestic industries will continue to lead the world in the digital age, further bolstering Taiwan’s international competitiveness.

Today, 55% of the world’s population lives in urban areas, by 2030, the world is projected to have 43 megacities with more than 10 million inhabitants, most of them in developing regions (UN 2018). With the increasing urban population, traffic congestion, environmental problems, and climate change, applying ICT technologies in urban governance can enhance the quality of life of citizens and assist industrial development. The population of Taiwan is concentrated in six major cities. Although the population is below Megacity level (at least one million people), the population density of several metropolitan areas, especially Taipei City (9,934 people per square kilometer), is similar to or even exceeds the level of international Megacities. Therefore, in terms of population density, such urban areas in Taiwan also share the common governance issues faced by Megacities.

The government has invested in fostering industrial development of 5G/B5G wireless communication networks and 6G technology for the continued expansion of wireless communication coverage. Over the last four decades, Taiwan’s tech industry has been a global leader in this revolution, most notably in the areas of semiconductors, cutting-edge ICT, and comprehensive supply chains. As the world continues toward a digital future of 6G, autonomous vehicles, space technology, and other digital innovations, facilities, services, and talent are drivers of the digital transformation. Taiwan is positioned to maintain its leadership role in the digital era by integrating facilities and services; supporting the research and development of AI, big data, and advanced telecommunication networks; and providing funds for forward-thinking research projects in the semiconductor industry. Taiwan’s digital transformation will continue to redefine traditional conceptions of industry and lead the country toward becoming a world-class digital nation and a land of intelligent technology.

2.2 Current Level of Digitalization in Taiwan

To accelerate industrial Innovation and create the “Digital Nation, Smart Island”, Taiwan’s government has promoted the “Digital Nation & Innovative Economic Development Program (DIGI⁺) 2017–2025”, which is intended to enhance digital infrastructure, re-construct a service-based digital government, and realize a fair and active internet society with equal digital rights. The government has approved a 4-year, US$ 658 million spending plan for 5 G technologies to increase the region’s digital competitiveness. Based on the Taiwan E-Competitiveness Annual Report (BOST 2018), the government has initiated “DIGI⁺ program” and “AI Taiwan” program to achieve a vision of becoming a high-value digital nation, the “DIGI⁺ program” has set out three major indicators: “Active Internet Society”, “Innovative Digital Economy”, and “Advanced Broadband Environment”.

• (1). Active Internet Society:

  • By 2020, the digital living service adoption of the general public will reach 60% and further reach 80% by 2025.

  • By 2020, Taiwan hopes to acquire top 12 of the global national e-competitiveness ranking and reach top 6 by 2025.

• (2). Innovative Digital Economy:

  • Digital economy is estimated to contribute 25.2%, or NTD 4.8 trillion, of Taiwan’s GDP in 2020, up from 20.3%, or NTD 3.4 trillion in 2015 and expected to reach 29.9%, or NTD 6.5 trillion, in 2025.

  • Production value of digital software economy will increase from NTD 1.1 trillion in 2015 to NTD 1.7 trillion in 2020 and further to NTD 2.9 trillion in 2025.

• (3). Advanced Broadband Environment:

  • By 2020, broadband internet is to reach speeds from the current 100 Mbps to 1 Gbps (with 90% internet coverage), which is 10 times faster; by 2025, the speeds are to reach 2 Gbps (with 90% internet coverage).

  • By 2020, Taiwan is set to make “broadband human rights” a reality while ensuring disadvantaged people have access to 10 Mbps broadband services and further to 25 Mbps by 2025.

The “AI Taiwan” program aims to achieve three main objectives through five action plans and strategies (Table 2).

• (1). Cultivate 1,000 high-end AI talents to develop AI technology by 2021, alongside 10,000 pioneers to broaden AI application in different industries.

• (2). Use the AI Pilot Project to promote AI on Device, allowing Taiwan to become one of the top 3 AI chip manufacturers in the world.

• (3). Enhance the promotion of talent and industry cultivation to help Taiwan achieve number one in specific AI application industry sectors.

Table 2. AI Taiwan’s five action plans and strategies

In 2019, 60% of Taiwan’s enterprises have implemented digital transformation plans, yet only 13% of Taiwan’s SMEs have initiated digital transformation-related projects due to resource and budgetary constraints (CPC 2020). According to the report of Taiwan’s digital imperative (McKinsey 2017), knowledge-intensive industries are highly digitized, financial services such as banking and insurance, and high-tech, are the most highly digitized sectors of Taiwan’s economy. Public industries are notably advanced digitally. Taiwan’s government has invested at least US$200 million every five years since the 2000s in digital assets and processes. Service industries vary widely in their level of digitalization. Transportation is the most digitized among Taiwan’s service sectors because of a booming e-commerce market and an increase in online services and transactions. Other service sectors such as wholesale and retail trade are relatively less digitally advanced. Manufacturing industries in Taiwan have been slow to digitize. Chemical manufacturing represents approximately 10% of Taiwan’s GDP but is less digitized than other manufacturing sectors (Fig. 6.).

Fig. 6.

data source: Gartner, Taiwan Directorate General of Budget).

The Taiwan Digitazation index, 2016 or latest available data, only displayed sectors with GDP contribution at 2% (own illustration based on McKinsey 2017, p. 13;

In recent years, Taiwan’s government has joined forces with manufacturers to promote distinctive, differentiated, high-value-added products and applications that will drive the next wave of the nation’s digital industrial transformation and expansion. Several accomplishments have been reached through the process of digital transformation as the followings (MOEA undated):

• (1). Smart manufacturing in printed circuit boards: the time to eliminate defects is reduced from 30 days to 7 days (Time-saving: 75%) and the false alarm rate of defect detection is reduced by 50%.

• (2). Smart manufacturing in the textile industry: increase 20% of defect-free units, the success rate of the initial color matching is increased by 5% and the energy saving is 15%.

• (3). Smart manufacturing of aerospace machine tool industry: shorten product delivery time by 30%, increase productivity by 10% and reduce production costs by 10%.

• (4). Smart manufacturing of servo motors: drive 2.5 times of daily output (Increase the units from 150 to 525 units per 8 h day).

• (5). Smart manufacturing of water hardware and hand tool industry: increase 60% of output per capital of labor force (from US$ 60,000 to US$ 96,000).

• (6). Smart manufacturing of automotive and motor vehicle industry: the total equipment efficiency has increased from 80% to 85%.

2.3 Digitalization of the Labor Market in Taiwan

Under the transformation of the digital industry, three major phenomena can be detected in the changes in Taiwan’s employment market: the need to upgrade talents, especially those with cross-domain digital skills; the industry lacks the awareness regarding digital talent training; the gap between industry and academia is widening, which signifies that reducing the learning gap has become the key to the efficiency of the employment market in Taiwan. According to a survey report by the Taiwan Economic Research Institute (2019), about 60% of enterprises in Taiwan have tried to introduce new technology. Most of such technical fields take smart manufacturing as their mainstream, followed by IoT security, big data analysis, and artificial intelligence; based on corporate investment with regard to the level of digital transformation, companies generally believe that the demand for employment driven by various new technologies is greater than the demand for saving manpower. Taking electronic information as an example, future areas of manpower that companies need to increase will be focused on cloud computing and information security in the IoT. Companies believe that, on the one hand, internal employees are still inadequate in their grasp of new technological capabilities; on the other hand, it is difficult to hire suitable talents from outside. The development of digital technology has changed manufacturing behavior in global industries and has also accelerated the demand for the upgrading of talents and skills.

In the future, talent cultivation needs to attend to the skills of professionalism. What is more, digital skills that solve problems via information technology should be duly cultivated. Taiwan is dominated by small and medium-sized enterprises, and most smart systems and equipment are huge investments, which turn out to be a burden for corporate transformation. Limited by the company size and the impact of industrial Original Equipment Manufacturer (OEM), the digitalization of most companies’ industrial investment ends up being relatively conservative; coupled with the introduction of digital smart equipment, relevant skill training is required, albeit these companies can only afford limited means in independently training their digital talents, hence external assistance is still indispensable. In addition, the rapid changes in technology also make it difficult for companies to predict what type of digital capabilities they need in the future, while the existing knowledge or skills may end up insufficient in response to the development of an innovation economy in a timely manner. How to keep the digital skill and expertise edge depends on continuous skill training conducted in a scrolling style. Changes in the quality of Taiwan’s labor force have been unable to effectively meet the needs of industry employment. Consistent with the trend of the popularization of higher education, the age at which young people enter the workforce has been delayed. How to reduce the gap between learning and employment has become the key to activating the efficiency of Taiwan’s employment market. The main purpose of enterprises participating in the cultivation of talents for industry-university cooperation is to recruit the talents needed for current jobs and to cultivate the reserve talents needed for the future. However, the gap between learning and employment has reduced enterprises’ willingness in engaging in industry-university cooperation.

To face labor and talent shortages, the government needs to strengthen the coordination mechanism of its digital skills development policy, connect the cultivation mechanisms in both major systems, i.e., integrate resources to initiate cooperation between the supply and demand of talents, design digital talent training standards and incentive mechanisms, promote corporate investment in talent training, establish a new form of industry-university cooperation model, establish a learning certification system, and gradually guide the transformation of talents. Talent competitiveness can be continuously maintained through a wider range of opportunities for lifelong learning.

2.4 Talent Development and Cultivation in Taiwan

Digital competences are the cornerstone of a digital economy, talent development accompanied by industrial innovations is the key to a country’s competitiveness. In Taiwan, digital talents have been recognized in the DIGI⁺, the AI Taiwan action plan, and the nationwide six core strategic industries policy. Taiwan’s government educates digital talents by augmenting the IT infrastructure and constructing an e-learning environment. Most importantly, building a talent supply chain from compulsory education to universities, internships, and on-the-job training has facilitated digital competences on different levels and paved the way for the transformation into a digital economy.

The action plan for the development of cross-disciplinary digital talents consists of five venues: elementary schools, junior high schools, colleges and universities, on-the-job training, and introduction of software competences from overseas. The purpose is to accelerate the development of professional know-how in both hardware and software, in support of innovation and development of industries.

• 1. Construct a smart learning environment for high and elementary schools: Taiwan’s government implements the deployment of smart networks on campus, strengthening a digital teaching and learning environment, and the improvement of broadband connectivity and speeds for the Taiwan Academic Network.

• 2. Establish the foundation of K-12 education and explore the potential elite: deepening of IT education as part of 12-year compulsory education by developing computing concepts and digital literacy for students, assisting teachers in primary and junior high schools regarding the enhancement of IT expertise and discovering students’ IT potential with a development mechanism included into the national curriculum.

• 3. Expand the cultivation of university student’s inter-disciplinary digital skills: the action plan includes the development of 5G networking and application competences, administering of the integration of academic, industrial and research efforts, and internationalization of digital economy professionals by fostering the links between corporations and the new generation of international talents.

• 4. Support the cultivation of inter-disciplinary digital skills of the workforce: the organization of training and education programs for multi-disciplinary digital talents in order to support the innovation and the development of industries and the encouragement of on-the-job training and education schemes by companies for cross-disciplinary digital competences are two major programs to support the transformation of the digital economy.

• 5. Link international open innovation resources to facilitate the talents’ ability to design and develop: the government sponsors R&D projects on open source software and encourages active participation in open source initiatives to enhance Taiwan’s contribution to the global community.

Aligning with the national policy directory “Digital Nation, Smart Island,” the expected outcomes of talent development are as following:

• I. Cultivation of 1,000 Elites in Intelligent Technologies: this includes 1,000 high-caliber talents in intelligent technologies by 2021, 800 AI talent prospects from the universities, 200 high-caliber talents in intelligent system technologies from the research organization, and encourage international enterprises to establish AI R&D centers.

• II. Training of 10,000 Pioneers in Intelligent Applications: this includes 5,000 talents in practical intelligent technologies, 2,000 university talents per year in cross-domain intelligent applications, 2,000 corporate employees per year in intelligent applications, and 1,000 people per year trained in secondary skills.

• III. Recruiting Global AI Talents: the government implements New Act for the Recruitment and Employment of Foreign Professionals, expand programs for attracting worldwide AI talents and promote the innovative clusters of AI talents and provide a convenient living and educational environment.

2.5 National Promotion Strategy for Digital Economy

Artificial intelligence (AI) has fundamentally transformed human life and industry and created boundless business opportunities. Taiwan government rolled out the AI Taiwan Action Plan (2018–2021) in 2018 to sharpen Taiwan’s advantages. Several national promotion strategies are implemented to propel Taiwan into the ranks of the world’s leading smart nations.

• 1. Digital culture and creativity: Promote the sound development of cultural industries through technological tools and develop diversified digital content and innovative applications.

• 2. Data economy: create a data application atmosphere and develop data economy value-added services and guide the transformation of the existing industry to provide data service.

• 3. Digital e-commerce: promote cross-border e-commerce and develop international business opportunities, provide convenient financial and technical service, and popularize and promote SME mobile payment.

• 4. Software and hardware integration: accelerate the exchange between domestic startup teams and international communities and establish a comprehensive soft-landing mechanism in Taiwan to increase the incentives for international teams to come to Taiwan. Promote digital service innovation and incubate flagship teams with the capacity to output software and hardware integration service internationally.

• 5. Digital base: construct national-level AI R&D and cloud service infrastructure, develop the software/hardware technology and service of forward-looking smart application, and bridge AI ecosystem to industrial application and talent cultivation.

• 6. Developing AI talent: Smart-tech researchers for senior-level positions are being trained by universities and research institutes, while more than 10,000 AI technicians and applications specialists are produced each year.

• 7. Promoting Taiwan’s lead role in AI: Taiwan’s government is working aggressively to expand the nation’s world-leading position in the semiconductor chip industry.

• 8. Building Taiwan into an AI innovation hub: As international AI innovation clusters are formed in Taiwan, Microsoft, Google and other big names have set up AI R&D bases on the island to build connections with the local AI industry.

• 9. Liberalizing laws and opening test grounds: Taiwan announced the Unmanned Vehicles Technology Innovative Experimentation Act, the first of its kind in the world covering autonomous vehicles on land, at sea, and in the air.

• 10. Transforming industry with AI: AI talent will be matched to industrial needs to develop AI solutions and accelerate industrial innovation and digital transformation.

2.6 Outlook

The digital economy has deepened into the global economy as a key factor driving national and global economic growth, and it also has led to great impact and changes in the whole society, economy, social interaction, and work. The scope of application includes the establishment of IT-based operation, R&D of virtualized products and services, development of digitalized financial transaction and e-commerce. This not only shortens the distance among the global participants but also opens a new type of economic system that leads the global industry to cross-generation, cross-border and cross-domain.

However, SMEs are lacking relevant competences, applications, and innovations in responding to the rapid changes in digital industries. For awareness creation, the Ministry of Science and Technology (MOST) has promoted the AI Innovation Research Program and established four AI research centers, including the Artificial Intelligence for Intelligent Manufacturing Systems Research Center (AIMS). The goal of AIMS is to establish a world-class AI research center that will build on Taiwan’s traditional strength in manufacturing and make critical contributions to advance it to the next level in the global market. AIMS has coordinated many outstanding research teams and projects in Taiwan in the field of intelligent manufacturing, including promising areas and applications such as AI, deep learning, machine vision, machine network, big data analysis, intelligent agriculture, intelligent machinery, etc. (AIMS 2018).

Digitalization has become a key reengineering process to regain Taiwan’s companies’ competitiveness and tap into digital economy opportunities. The adaptation of new process technologies and the development in manufacturing intelligence capabilities have profound effects on the management and operations, including cycle time reduction, defect diagnosis, demand forecast, support decision-making, equipment management, and human’s talent extension. The support from government policy and the collaboration with academy sectors are key driving forces to engage in the digital innovation process. The need of cultivating digital talent and the right skills is also an essential element during the digital innovation process. Therefore, it is necessary to establish relevant forward-looking technologies and applications, we believe the following methods will strengthen the cooperation among industries, academic sectors, and society and drive the sustainability of a digital economy.

• 1. Upgrade and transform current industries: create opportunities for experts in artificial intelligence, statistics, manufacturing, management, science and technology law, social sciences, etc. to work together to promote interdisciplinary research and innovation.

• 2. Cultivate AI talents: collect and maintain manufacturing big data, organize AI competitions for intelligent manufacturing solutions, and utilize these events to train or cultivate AI talents that will help to enhance competitive advantages and profitability of the domestic industries.

• 3. Build partnerships between academia and industry for innovation and entrepreneurship: establish strategic alliances with industry associations and institutions, integrate and utilize academic resources, bring in domestic and foreign venture funds, and accelerate the growth of startup companies.

• 4. Elevate national global visibility and influence in AI: building on national strength to promote cooperation with leading research centers and multinational companies worldwide, and invite domestic and foreign experts to interact, share and collaborate.

• 5. Export effective AI solutions for intelligent manufacturing: promote the development and application of advanced technologies in artificial intelligence in the field of intelligent manufacturing, help the domestic industries to adopt AI or even create a brand-new AI industry, and export these technologies to other countries.

3 Conclusion and Outlook

Not surprisingly, the world of work shows many different faces in a region as large and diverse as East Asia, or the Asia-Pacific.

However, an issue affecting several countries in the region refers to ‘unwell’ working conditions: Occupational safety and health indicators are worse for Asia as compared to other continents (Yeung and Johnston 2020; Fan et al. 2020). One reason for this is excessive overwork, which is frequently encountered across Asia, while local patterns vary: In Japan, rather managerial staff is affected by excessive overwork, while in the People’s Republic of China this holds more for low-rank, low-skilled workers (Tsai et al. 2016).

A crucial phenomenon for Asian labor markets and working conditions is the rise of digital work and labor platforms: Roughly 96% of the investment in digital labor platforms is concentrated in Asia (US$56 billion), North America (US$46 billion), and Europe (US$12 billion), compared to 4% in Latin America, Africa and the Arab States (US$4 billion) (ILO 2021a). Thus, Asia attracts the lion’s share of this investment in a global comparison. This rise of digital labor platforms has provided new opportunities for work, earnings, and livelihood predominantly for workers in developing countries in the Asia Pacific region, but has also brought about challenges for workers regarding e.g. their regularity of income, working conditions, social protection, and freedom of association (ILO 2021b).

Technology and associated task structures also affect job markets and working conditions across Asia; some patterns appear to show up for several countries in the region: Occupation seems to grow most in jobs with a high intensity of nonroutine cognitive, socially interactive, and ICT tasks, and a low intensity of manual tasks, whereas occupation seems to grow less or even contract in jobs with a high intensity of manual tasks (ADB 2018).

Regarding gender inequality, the situation varies widely between Asian sub-regions. Male-female differences in labor market participation are very low in the Pacific Islands, rather low in East Asia, but extremely high in South Asia, especially India (UNESCAP 2019, ILO 2020).

Challenges for the future refer to using the potential of digital technologies for socio-economic development, and for improving the world of work at the same time.

The in-depth analysis of Taiwan has shown how this might look like in a very advanced economy, approaches need to be and are different elsewhere in the Asia-Pacific.

But, among all this diversity, the ILO Centenary Declaration for the Future of Work and its three areas of action (ILO 2019a, b; 2020) might show a common pathway:

• (1) increasing investment in people’s capabilities

• (2) increasing investment in the institutions of work and

• (3) increasing investment in decent and sustainable work

And, it might be added, research and monitoring activities are needed in every country to be able to track status and development in each of these domains, in a country-specific way.

Of course, this needs to be implemented in very different ways between the East Asian and Pacific countries, but failing to address any of the three areas will most probably have detrimental effects on the socio-economic development of any country in the region.