Future of Work in East Asia: Robots, AI, and Digital Platforms Driving Change

A comprehensive research authored by Omar Arias, Daisuke Fukuzawa, Duong Trung Le, and Aaditya Mattoo is a collaborative work under the World Bank’s East Asia and Pacific Chief Economist Office, partnerships with Fulbright University Vietnam, Harvard Kennedy School, Binghamton University, University of Tokyo, and University of Cambridge unpacks how automation and digitalization are reshaping labor markets across one of the most economically diverse regions in the world. Rather than presenting a one-size-fits-all narrative, the study explores country-specific responses to the spread of industrial robots, artificial intelligence (AI), and digital platforms, highlighting both opportunities for productivity gains and the risks of rising inequality, informality, and job polarization.

Robots Rise, But So Do Jobs For Some

A major insight from the study is that the introduction of robots in EAP countries has not led to mass job losses; in fact, in many places, it’s creating more jobs than it’s displacing. Between 2018 and 2022, robot adoption in five ASEAN countries led to the displacement of 1.4 million low-skilled formal workers engaged in routine manual tasks. Yet, at the same time, it created around 2 million skilled jobs in nonroutine manual and cognitive work. The manufacturing sectors of China, Vietnam, and Malaysia, in particular, have seen strong employment and wage growth alongside rising robot penetration, especially in electronics, automotives, and electrical equipment. These benefits, however, are not evenly distributed. Low-skilled and older workers are more likely to experience job displacement or slide into informality, while younger, tertiary-educated workers gain higher wages and better job security. Robot adoption is most economically viable in middle-income countries where labor costs have risen, whereas in low-wage economies like Cambodia and Myanmar, automation is progressing more slowly due to limited cost incentives.

AI: Potential Giant, Present Tension

While the effects of robots are now measurable, AI remains a looming force. The report finds that only 10 percent of jobs in the EAP region involve tasks that are complementary to AI, far lower than the 30 percent seen in advanced economies. This suggests the region may be underprepared to fully harness AI’s augmentation potential. At the same time, roles most exposed to AI, typically involving routine cognitive tasks, tend to be associated with lower pay and higher displacement risks. AI exposure is not uniform: women and tertiary-educated individuals are more likely to hold AI-exposed jobs, especially in Malaysia and the Philippines. Crucially, when adjusting for job types, those most exposed to AI often earn lower wages. This challenges the idea that AI exposure is necessarily a pathway to better income and instead highlights a potential for downward pressure on wages if AI adoption is not paired with upskilling and task transformation. The key message is clear: AI can augment or replace jobs, depending on how countries prepare their workforces to adapt.

The Digital Platform Revolution: Inclusive, Yet Precarious

Beyond automation, digital platforms are transforming employment in the region, reshaping how people work, earn, and access markets. The platform economy accounted for between 5 and 7 percent of GDP in several EAP countries in 2023. In Indonesia, workers in digital-intensive roles, even in the informal sector, are earning wages comparable to those in formal, nondigital jobs. This reflects a shift where digitalization narrows income gaps across sectors and increases opportunity for underrepresented groups. Women in particular are benefiting: in Indonesia and Vietnam, digital jobs provide wage premiums twice as high for women as for men. However, the story is not universally positive. In Viet Nam, the rise of ride-hailing apps displaced formal taxi drivers while boosting incomes for informal motorbike drivers, highlighting how platforms can promote earnings at the cost of formal job stability. This paradox illustrates the need for tailored social protection measures for gig and platform workers who fall outside conventional labor regulation.

EAP’s Counter to Deindustrialization

Globally, developing countries often face the risk of premature deindustrialization, but many EAP economies are bucking this trend. China and Viet Nam, where robot adoption has surged, have simultaneously seen increases in industrial employment. This suggests that rising productivity from automation can translate into expanded output and new jobs if supported by strong demand and global competitiveness. In contrast, countries like Malaysia and Thailand show more mixed results; employment shares in industry have flattened or declined, even with high robot penetration. The report attributes the success stories to dynamic export-oriented manufacturing, a relatively high supply of medium-skilled labor, and openness to trade and foreign direct investment. However, it warns that sustaining this trajectory will depend on enabling a similar transformation in the services sector, where digital skills and AI-readiness will be critical.

Rethinking Policy for the Tech-Driven Future

To ensure technology becomes a driver of inclusive growth rather than exclusion, the report proposes a broad policy agenda. First, countries must invest in digital, socioemotional, and advanced technical skills. Models like Korea’s Meister high schools and large-scale mindset interventions in Indonesia show how early, targeted education reform can build future-ready talent. Second, labor and capital mobility must be enhanced. Barriers such as China and Vietnam’s household registration systems hinder migration, while licensing and bankruptcy laws restrict capital flows. Third, price distortions favoring capital over labor, often embedded in tax codes, should be addressed to avoid automation that undercuts employment. Lastly, countries must design innovative social protection systems for informal and self-employed workers. Malaysia’s voluntary insurance model and India’s awareness campaigns offer successful examples.

Ultimately,the report calls for proactive leadership. Technology’s impact will not be neutral, it will either deepen inequality or unlock new prosperity depending on the choices made today. For East Asia and the Pacific, the future of work is not just about adopting robots and algorithms. It’s about ensuring that workers are equipped, supported, and empowered to thrive alongside them.