Embracing Automation: Addressing ASEAN’s Manufacturing Challenges
Lim Boon Choon, President, Hexagon Manufacturing Intelligence for Korea, ASEAN, Pacific The ASEAN manufacturing sector is at a critical juncture, teetering on the edge of unprecedented growth and formidable challenges. In 2023, foreign direct investment (FDI) inflows soared to a record-breaking $230 billion, a remarkable 24% increase from the annual average of $190 billion between 2020 and 2022, according to UNCTAD’s latest Global Investment Report. This surge in investment is a testament to ASEAN’s magnetic appeal to global investors, yet it also casts a spotlight on the pressing issues that could impede its progress. At the heart of these challenges lie quality assurance, manpower shortages, and cost efficiency. As the region grapples with these obstacles, the call for automation has never been louder or more urgent. Experts contend that automation is not merely an option but a crucial strategy for ASEAN to transcend these barriers and cement its status as a global manufacturing powerhouse. Manpower Shortages: The Growing Talent Gap Nowhere is the need for change more apparent than in Vietnam, where realised FDI reached $14.15 billion in the first eight months of 2024, with nearly 80% funnelled into manufacturing (Vietnam Ministry of Planning and Investment). Despite this growth, a severe shortage of skilled workers looms. A ManpowerGroup survey in 2023 ranked manufacturing as one of the hardest-hit sectors in Vietnam’s labour market. This trend isn’t limited to Vietnam. Across ASEAN’s six largest economies—Indonesia, Thailand, Malaysia, the Philippines, Singapore, and Vietnam—the talent gap is projected to hit 6.6 million skilled workers this year[1]. The scarcity has pushed companies into a “talent tug-of-war,” destabilising production lines as newer factories poach experienced workers from established ones. For instance, in Thailand, the automotive sector has been particularly affected, with companies like Toyota and Honda struggling to maintain production schedules due to skilled labour […]