‘New Collar’ Manufacturing: A New Fit For Vietnam As A Next-Generation Hub

- Feb 21, 2019-

One of the key drivers in Vietnam’s rise as one of the world’s top emerging economies has been the development of its manufacturing sector. Currently a major GDP contributor, the sector continues to post significant growth as the country strengthens its position as a global lower-cost manufacturing hub.

To maintain its competitiveness and continue its upward trajectory, however, Vietnam needs to respond to the evolving manufacturing landscape, specifically in light of the fourth industrial revolution, or Industry 4.0.

‘New collar’ workers as the future of manufacturing

One of the biggest changes that the fourth industrial revolution will bring to manufacturing is its transformation of factories into high-tech environments populated by automated machinery and robots. The increasing presence of technology in such industrial workplaces is expected to create new kinds of jobs and change the nature of existing ones, giving rise to what has been called the "new collar" worker.

This new kind of worker is set to replace the old divide between “blue collar” manual labor on the factory floor and “white collar” clerical and management jobs in offices. The “new collar” jobs of the future are intellectually demanding and require accuracy and dexterity. Workers, for their part, will be expected to be multi-skilled specialists - for instance, a welding expert might simultaneously serve as a quality control manager.

While this presents a variety of opportunities, it also poses a great challenge: the widening of the skills gap that is already affecting the manufacturing sector, both globally as well as in Vietnam. The World Economic Forum (WEF) estimates that by 2020, more than a third of core skills required by today’s occupations will have changed; according to one report, 65 percent of children entering primary school today will have jobs that do not yet exist and for which their educations will fail to prepare them.

To prepare students and workers for the future, the Vietnamese central government decided to allocate specific resources to education in its directive to strengthen the country’s ability to access Industry 4.0. The budget includes plans to promote STEM education in the public school system’s universal curriculum, as well as to revise vocational school curricula to offer classes that will help students develop the skills needed to succeed in the fourth industrial economy.

Creating the future of manufacturing through private-sector partnerships

If the “new collar” worker of the future is to become a reality, it will only happen with the buy-in of the private sector. The manufacturing industry, specifically, needs to commit to playing an active role in creating “new collar” workers in Vietnam – and worldwide – in order to build a deep talent pool and sustain its operations.

One way to do this is through scholarships and other partnerships with educational institutions. At Mitsubishi Heavy Industries (MHI) Group, education partnerships serve as a crucial part of social impact programming that gives back to the local communities in which it operates.

Vietnam’s partnership with the Ministry of Education and Training (MoET), which creates opportunities for Vietnamese students to study in Japan and complete internships at MHI, is one of MHI’s most active. Other sponsorships dedicate time and money to the creation of joint-training activities and short-term study programs, which give students and academics the opportunity to take seminars on advanced technologies in energy and aviation. These classes and experiential programs allow for MHI Group to help further build and nurture local industries in which it has expertise.

Companies can also commit to upskilling the Vietnamese workforce through the facilitation of technology transfers. Since MHI’s Vietnamese factories feed directly into its global manufacturing supply chain for aviation equipment and diesel engines, MHI Group has organically shared expertise and best practices across markets all over the world, including the new skills, knowledge and technologies that will help to power Industry 4.0.

By helping to create “new collar” workers, manufacturing companies can retain their growth while helping countries like Vietnam to skill up their workforce, access the benefits of the fourth industrial revolution and power the continued rise of their manufacturing economies.

This article first appeared online at Vietnam Investment Review.