How prepared are we for an AI-first future?

The Star

3 days ago

THE impact of artificial intelligence (AI) on the labour market and economy as a whole is a topic of debate. It is both a disruptor and collaborator.
Technological revolution, enabled by AI has the potential to reshape the labour market, shape the nature of work, job roles, the skills required to thrive, the available opportunities and employment dynamics across various industries.
With AI advancing at a rapid pace, the labour market and workforce will undergo significant transformation unlike any before.
The impact of AI on the labour market is multifaceted and complex; while it enhances productivity and increases process efficiency as well as creates opportunities, it comes with threats and challenges.
AI has the potential to automate tasks, enhance the decision-making process, and create new job opportunities in fields such as data analytics, machine learning and AI development.
Nevertheless, it raises concerns about jobs displacement, particularly in industries that rely heavily on routine and repetitive tasks; skill polarisation; and ethics.
Many established organisations and institutions have predicted the likelihood that jobs will be replaced by AI.
The findings and survey are striking: The United Nations Trade and Development estimated that up to 40% of all jobs could be affected by AI.
The International Monetary Fund analysis showed that almost 40% of global employment is exposed to AI, with about 60% of jobs may be impacted in advanced economies, and in emerging markets and low-income countries, by contrast, AI exposure is expected to be at 40% and 26%, respectively.
According to a report by the World Economic Forum, by 2025, AI will have displaced 75 million jobs globally, but will have created 133 million new jobs.
This means that there will be a net gain of 58 million jobs globally.
A report by McKinsey & Co says that AI is expected to create 20 million to 50 million new jobs globally by 2030.
These new jobs will be in a range of industries, including healthcare, manufacturing and finance.
AI is already spreading through the Malaysian economy.
The scale of its impacts is potentially significant. The uptake of AI technologies could occur in waves and at different phases of the AI development.
While a different forms of AI-powered tools and applications could be deployed across different occupations and sectors, there could be push-back by those whose businesses or employment are disrupted by the AI-based innovations.
Malaysia TalentCorp's impact study indicated that approximately 1.8 million Malaysian employees are expected to be affected by the transition to AI, digitalisation and green economy, with varying levels of exposure.
Of this, around 620,000 workers (18%) are projected to be highly impacted within the next three to five years, while another 1.2 million (35%) are expected to face moderate impact.
Together, these groups account for roughly 53% of the 3.5 million skilled and semi-skilled employees who are directly engaged in the core operations across key sectors.
The study focusses on 10 key sectors chosen for their significant contributions to Malaysia's gross development product, and they were aerospace, Chemicals, electrical and electronics, energy and power, food manufacturing and cService, global business services, ICT, medical devices, pharmaceutical manufacturing and wholesale and retail trade.
The Ipsos AI Monitor 2025 revealed that 62% of adults in Malaysia in 2024 think that AI will replace their current job in the next five years.
According to the Human Resources Ministry response in Parliament, between 2020 and September 2024, a total of 293,639 workers in Malaysia have already lost their jobs due to automation and AI.
The impact of AI on the workforce will vary by industry and state.
The transition to AI's transformative force in the labour market isn't seamless. Policymakers, society, businesses, employers, and employees must adapt to the changes and disruptions AI generates, ensuring its challenges are responsibly addressed.
Policymakers should proactively prepare their workforce and labour markets so that they are equipped to ride on the AI's disruption through education, training and skills development and adaptable labour market policies.
So, what roles should the Malaysian government play at this stage of AI uptake and development?
The government must act now and prepare our workforce for a more radical future. We should outline the following action plans to prepare our students, graduates and youth as well as workforce for adapting to the AI era.
> It begins with the integration of AI in our education system to future-proof Malaysia's next generation of workforce.
Schools curriculum must focus on AI-complementary skills, adapting to the changing landscape of AI, incorporating AI literacy, digital skills and critical thinking skills into the education system.
The application of AI-powered tools is being used for adaptive learning platforms, automate elements of lesson learning and grading, and intelligent tutoring systems as well as personalise the learning experience.
China will integrate AI applications into teaching efforts, textbooks and the school curriculum as it moves to overhaul education.
Integrating AI into Technical and Vocational Education and Training and apprenticeship programmes offer a powerful way to enhance learning, improve employability, and prepare students for the reality of the modern workplace.
> The most essential five skills that Malaysians must be equipped to survive and thrive in this dynamic, technology-infused work landscape are analytical skills, functional and job-specific skills, project management skills, creativity and innovation skills, and advanced digital skills.
> Combining research and development tax credits, research and development grants and a free, open-source products can support small and medium enterprises (SMEs) to adopt AI in their business operation, including incentivise a broader uptake of AI training assistants to help increase process efficiency.
AI assistants can significantly boost the productivity and performance of lower-performing workers by automating repetitive tasks, providing data-driven insights, and offering personalised learning opportunities
Dedicated public institutions can significantly facilitate the adoption and spread of AI within firms.
Firms have cited uncertainty over the return on AI investment as a critical obstacle for considering adopting AI.
These institutions can help SMEs find the information and give advice and guidance for the adoption of AI, for instance, provide guidelines or a framework to help SMEs navigate the vendor selection process, as well as create networking and collaborative platforms between public and private sectors to help businesses build AI capabilities.
> Encourage the broad adoption of AI across all firms, regardless of size through the development of a new AI-pathfinder or AI Accelerator programme – a structured initiative designed to support and accelerate the growth of startups and businesses focused on AI technologies.
These programmes typically offer mentorship, technical support, access to resources, and networking opportunities to help participants develop and scale their AI-driven products and services.
We can draw on the successful schemes in Singapore and Germany supporting business transformation through a new AI-powered personalised service.
For example, the Monetary Authority of Singapore (MAS) Pathfinder Programme for financial sector AI adoption, is a collaborative initiative between MAS and the financial industry that fosters knowledge exchange in AI implementations.
Participating financial institutions share their experience implementing AI solutions while also gaining insights from the collective experiences of their peers.
> An interactive labour market system to create early awareness and opportunity that helps our workforce to reskilling and upskilling equipped with required new skillset to better handle AI-driven task and take up new job opportunities created by AI.
This system provides real-time analysis of demand and supply of AI jobs, including the job roles that will be displaced by AI, the industries that will create new source of employment, what skills that will be in demand, and also which training courses that are suitable.
> Upskilling and reskilling programmes critical for facilitating workers transition to new employment opportunities, and equip individuals with the necessary skills to thrive in an AI-enhanced economy.
What is important is that the workers receive the right training and skills for transformation development.
The government and the private sector can collaborate to identify emerging skills gaps and develop targeted training programmes.
Lee Heng Guie is executive director of the Socio-Economic Research Centre. The views expressed here are the writer's own.