The Demand for Digital and Complementary Skills in Southeast Asia

As the economies of Southeast Asia continue adopting digital technologies, policy makersincreasingly ask how to prepare the workforce for emerging labor demands. However, little is known about the skillsthat workers need to adapt to these changes. Skills profiles in low- and middle-income countries are typically derivedfrom data collected in the United States, which is known to inaccurately reflect their occupational skills. This paperuses online job postings data from Malaysia to identify the digital, cognitive, and socioemotional skills required fordigital and non-digital occupations. The skills profiles for each occupation are then merged with labor force survey datafrom Cambodia, Malaysia, Thailand, and Vietnam to sketch skills profiles of the workforces in these countries. Usingdescriptive statistics and linear probability model regressions, the paper finds evidence that highly digitaloccupations require not only digital skills, but also cognitive and socioemotional skills. Similarly, virtuallyall occupations, regardless of the digital intensity of the job, require some basic or intermediate digital skills.Pairwise correlations and a factor analysis confirm the complementarity between digital skills and different subsetsof cognitive and socioemotional skills. The data also confirm that, even with the excitement about the digitalrevolution, the bulk of employment in Southeast Asia is in low- (around two-thirds) or medium-digital (aroundone-third) occupations. Only between 1 and 5 percent of jobs are highly digital in the four countries studied. Thesefindings suggest that as education and training systems adapt to teach basic digital skills, they will need tocontinue to foster cognitive and socioemotional skills.