The economic growth of Southeast Asian countries will depend largely on the ability of governments to value their young people
Southeast Asia is one of the most dynamic and fastest growing regions in the world from a labor market perspective. With a total of about 700 million people, the region has a young, dynamic and increasingly educated population. From 1950 to 2020, the Southeast's working-age population grew from 95 million to 453 million. As the working-age population has grown faster than the non-working-age population, the economy's dependency ratio, i.e., the ratio of people considered "non-self-employed" due to age to people who are able to work, has declined leading to a phase of economic growth.
Unfortunately, however, this demographically favorable condition is not likely to last much longer. In Thailand, for example, it is estimated that as early as 2050 the number of people in the 20-64 age group will be 21 percent lower than in 2020. Moreover, if at the moment the average age in ASEAN countries turns out to be 30 in 2050 it will rise to 37.3 years showing that Southeast Asian countries will also move toward a phase characterized by a gradual aging of the population in which economic growth will depend more on the productivity and skill level of young people. As stated by Martijn Schouten, "workforce transformation leader" in Singapore for PWC, the need for a process process of skill adjustment and enrichment to create a workforce with digital and green skills has never been more urgent, considering the commitment made by many ASEAN countries to transition to a zero-emission economy. This transition will add roughly 30 million new jobs in Southeast Asia by 2030.
Therefore, it is critical that governments in the Southeast Asian region invest in the education and training of young people in order to increase productivity and innovation, fostering dynamic and competitive economic growth. An analysis conducted by PWC shows that extensive investment "in upskilling" would also have the potential to increase the region's GDP by 4 percent, thereby unlocking up to 676,000 new jobs by 2030. In terms of employment, the greatest benefits would be in Indonesia, Vietnam and the Philippines.
Taking note of the situation, many Southeast Asian countries are acting accordingly. For example, in Malaysia, where the under-35s make up about 60 percent of the population, the government has allocated 2.1 billion ringgit of funds in order to empower young people to become productive, innovative and socially responsible citizens; these include an allocation of 500 million for the National Digital Skills Program, aimed at helping young people upgrade their digital skills. There is also an allocation of 150 million euros for the Youth Entrepreneurship Program, aimed at supporting young entrepreneurs and their start-up initiatives. In contrast, the Singapore government has allocated $400 million in grants from the Financial Sector Development Fund (FSDF) through 2025 to support skills training for professionals in the financial sector. Thailand's Ministry of Labor has partnered with Microsoft Thailand to provide digital skills to 4 million people to support key sectors, including manufacturing, creating new jobs and business opportunities. The first phase of the partnership has boosted the digital skills of 280,000 Thai employees from 2020 to 2022, but a plan to create an additional 180,000 job opportunities is already in place.
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