Vietnam needs to develop vocational education and training in transition to Industry 4.0

Vietnam needs to develop dedicated technical and vocational education and training for its transition to the fourth industrial revolution.

Reaping the benefits of industry 4.0 in Vietnam examines domestic logistics and agro-processing industries which can be viewed as both important for growth, employment, international competitiveness, and 4IR.

The investigation finds that 4IR technologies can eliminate between a quarter and a third of jobs across these industries, although these losses would be more than offset by fresh labour demand which could ultimately lead to positive job gains in these sectors.

“While applications of 4IR technologies will help the country move up the value chain in products and services, Vietnam should consider new approaches to ensure inclusion and social protection for entry-level workers, especially those at risk of job displacement, and those who need upskilling,” said Andrew Jeffries, country director for Vietnam of ADB. “Adequate and timely investments in skills development can help the country not only to harness the potential of 4IR to increase productivity but also ensure that 4IR will benefit workers at large.”

Due to the severe impact of the novel coronavirus (COVID-19) on supply and value chains, the country’s agro-processing industry will need to make adjustments to adapt to shifting consumer behaviour. While logistics are likely to witness a post-pandemic upswing due to the growth of e-commerce and the changing nature of retail, both agro-processing and logistics must embrace digital supply chains. Indeed, they must launch attractive new digital initiatives, with these factors meaning that the need to upskill and reskill local workers is even more urgent.

The study is part of a four-country report conducted on ASEAN member states, including Cambodia, Indonesia, and the Philippines.

While 68% of training institutions in the country reported feeling well-equipped for 4IR, this was a lower rate than Cambodia who recorded 73%, the Philippines with 81%, and Indonesia at 95%. In addition, there is also a mismatch in perceptions between training institutions and employers in terms of the readiness of graduates to work. Only 4% of domestic training institutions reported using online training platforms, while 18% reported using augmented reality and virtual reality tools for training purposes.

“As 4IR technologies spread rapidly, extensive investments in digital skills will improve the chances of the young and old to access higher-quality jobs and lower the risk of job losses,” said Shanti Jagannathan, principal education specialist of ADB. “Now is the time to rethink delivery of skills using virtual platforms and mobile technologies, and to develop agile training institutions with courses and credentials that match labor market needs.”

Moving forward, ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and Pacific region, while simultaneously sustaining its efforts to eradicate extreme poverty. Originally established in 1966, it is owned by 68 members, including 49 from the region.