Forecasting labor demand for industrial development in ethnic minority and mountainous regions
Duong Huong Lam (Thai Nguyen University of Technology - Thai Nguyen University)
Asbtract:
Industrial development is an important orientation for the social-economic development of ethnic minority and mountainous regions in Vietnam in the coming period. However, the industrial development in these regions have faced many challenges due to the sparse population and lower literacy levels compared to other regions. Therefore, forecasting labor demand is especially important for local managers to have appropriate policies to prepare human resources for the industrial development in the near future. This study forecasts the industrial labor demand of ethnic minority and mountainous regions up to 2030 by using the forecast model and data of Liu et al in the period 1986-2016. The dependent variable of this model is the natural logarithm of labors using in the region's industries while the independent variables are the industrial production value and the labor demand in the previous year. The study’s findings show that the industrial labor demand of ethnic minority and mountainous regions by 2030 tends to increase. By 2030, it is forecasted that the demand for industrial labor will increase to 3,136,549 in the scenario of the highest growth of industrial production value.
Keywords: Industry, forecast, labour needs, development; Ethnic minority and mountainous regions.
1. Introduction
Ethnic mountainous areas have rugged terrain and mostly high mountains. Travel is very difficult and the industrial development of this region is not simple. However, with the spillover of the remaining areas for the ethnic mountainous areas, the industrial development of these regions will be increasingly strengthened in the near future. Workforce is one of the important factors contributing to the output of the production process that ensures success in business. Therefore, human resource planning for development is indispensable in all economic development processes in general.
Because of the importance of human resource planning for industrial development in the future, the core subject of the research is focused on the forecasting the demand of industrial labor markets in ethnic mountainous areas to 2030. Forecast results shown that the industrial labor demands in ethnic mountainous areas increased by an average of 7.4% from 2017 to 2030. During this period, the industrial labor supply still met the demand. However, in 2030, the gap between supply and demand will significantly narrow. Therefore, the plan to develop and steady the labor supply for the increased demand is an urgent requirement that must be addressed.
2. Forecasting model
To forecast the labor demands for industrial development in ethnic minority and mountainous areas, the author used the forecast model that Liu et al (2016) used to forecast the human resource demand for the health sector until 2030 of all countries around the world. The dependent variable of the model is the natural logarithm of labor using in the region's industry, and the independent variables included in the model are the industrial production value and labor demand in the previous year. The labor demand in this year depends on the business results in the previous year and the number of employees hired from the previous year. Other variables could also be included in the model, such as labor productivity and wages. However, because of the absence of data on these two variables, the author only include the previous two variables. The forecasting model is as Equation 1.
In which “ln labort“ is the natural logarithm of labors working in the industry of ethnic minority and mountainous areas in year t, “ln labort-1“ is the natural logarithm of labors working in industries in ethnic minority and mountainous areas in year t-1, and “ln valuet-1“ is natural logarithms of industrial production value of region in year t-1, et the interference factor of the model; a0, b1, b2 are the parameters that need to be estimated in the model.
3. Forecasting results
The industrial production value of the region was actually collected until 2016 from the Vietnam General Statistics Office, because in the model it was assumed to be exogenous variable, so the remaining values from 2017 to 2030 were calculated based on the Vietnam Industrial Development Strategy to 2025. The vision to 2035 was approved under Decision No. 879 / QD-TTg of June 9, 2014. The Vietnam Industrial Development Strategy to 2025 and vision to 2035 set specific industrial value growth targets as follows: the growth rate of industrial production value in the period to 2020 reaches 12, 5-13.0% each year, the period of 2021-2025 reaches 11.0-12.5% each year and the period of 2026-2035 reaches 10.5% -11.0% each year. We also propose a scenario assuming that the industry of the ethnic minority and mountainous regions also grows at a rate equal to the country's industrial growth rate as set out in the Strategy.
The average growth rate of industrial production value from 1985 to 2016 of ethnic minority and mountainous areas reached 10.34%; Meanwhile, the whole country in this period was 12.36%. The growth rate of industrial production value of ethnic minority and mountainous region is 2.02% lower than that of the whole country. Therefore, the author proposed a second scenario to maintain the growth rate of production value of ethnic minority and mountainous areas lower than the whole country by 2.02% in the period after 2016 to forecast labor demand of the region's industry. On that basis, the author gave three prediction values of industrial labor demand of the region with corresponding names of low, medium and high growth. Low growth is that the author takes the two margins of the growth of the country's industrial production value under the Strategy and adds up the average to divide by 2.02% to add the industrial growth value of ethnic minority and mountainous region with the low growth scenario; the average growth is equal to the lower boundary value of Vietnam's industrial growth as outlined in the Strategy; and high growth is as high as the upper growth rate of the Strategy. After proceeding with estimating Equation 1, the author got the results as in Table 1.
Table 1. Estimating labor demand in industry in ethnic minority and mountainous region
Note: Standard errors in parentheses, *** and ** mean reliable statistical values at 99% and 95%; ln is natural logarithm; observations are the total number of observations; R-squared is the square of the smallest error.
Source: Author's Calculation
Based on the estimation results, it is clear that the industrial labor demand of ethnic minority and mountainous areas depends on two factors: the industrial production value of the previous year and the hired labor of the previous year with dependence such as after:
- The labor demand of the next year increases when the labor demand of the previous year increases and the corresponding increase is 0.842%. That is, when the labor demand of the previous year increased by 1%, the labor demand of the following year increased by 0.842%.
- The labor demand of the next year increases when the industrial production value of the previous year increases and the corresponding increase is 0.0984%. That is, when the industrial production value of the previous year increased by 1%, the industrial labor demand of the following year increased by 0.0984%.
Especially, the least squared error value of the model is up to 97.3% close to the value of 1, proving that the model was built in accordance with the data set using regression run up to 97.3%. The square R level is very high, reasonable to forecast the industrial labor demand of the region until 2030. The industrial value of the region from 2017 to 2030 based on the above scenarios was calculated and shown in Table 2.
Table 2. Growth scenarios of industrial production value in ethnic minority and mountainous regions till 2030
Unit: %
Source: Author's Calculation
With the scenarios of industrial production value as above and based on the estimation results of equation 1, the author forecast the region's industrial labor demand as follows (forecast results are provided in Figure 1).
Figure 1. Forecast of industrial labor demand in ethnic minority and mountainous areas by 2030 (Unit: person)
Source: Author's Calculation
From the industrial labor demand forecasts in ethnic minority and mountainous areas, the author compared the industrial labor market of this region with these regions with the given scenarios. The comparison helps us to determine whether in the period from now to 2030, the region's industrial labor market will be under pressure from a lack of supply or a lack of demand in order to develop the labor market most effectively. Detailed data on industrial labor demand forecast is presented in Table 3.
Table 3. Forecast of industrial labor demand in ethnic minority and mountainous areas till 2030 with 3 scenarios
Unit: Persons
Source: Author's Calculation
4. Conclusion
Labor is one of the important input factors for production, the more labor force increases, the more value of production increases. Accurate determination of labor demand to ensure a continuous and highly efficient production process is a necessary component in a region's socio-economic development plan. The paper has forecast industrial labor demand of ethnic minority areas with the results: industrial labor demand of ethnic minority and mountainous regions by 2030 tends to increase. By 2030, it is forecasted that the demand for industrial labor will increase to 3,136,549 according to the scenario of the highest growth of industrial production value. With the prediction of industrial labor supply and demand for ethnic minority and mountainous areas, the author hopes this forecast will be a useful reference for policy makers on planning for industrial development in ethnic minority and mountainous areas in the future.
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DỰ BÁO NHU CẦU LAO ĐỘNG CHO PHÁT TRIỂN CÔNG NGHIỆP VÙNG DÂN TỘC THIỂU SỐ VÀ MIỀN NÚI TẠI VIỆT NAM
ThS. Dương Hương Lam
Đại học Kỹ thuật Công nghiệp - Đại học Thái Nguyên
Tóm tắt:
Phát triển công nghiệp là định hướng quan trọng để phát triển kinh tế - xã hội vùng dân tộc thiểu số và miền núi Việt Nam trong giai đoạn sắp tới. Trong khi đó, dân cư thưa thớt và có trình độ dân cư thấp hơn các khu vực khác luôn là một trong những thách thức gây nhiều khó khăn cho phát triển công nghiệp ở khu vực này. Vì vậy, dự báo nhu cầu nhân lực cho phát triển công nghiệp là đặc biệt quan trọng để các nhà quản lý địa phương có những chính sách phù hợp để chuẩn bị tốt nguồn nhân lực cho quá trình phát triển công nghiệp ở giai đoạn sắp tới. Bài viết đã dự báo nhu cầu lao động công nghiệp ở vùng dân tộc thiểu số và miền núi đến năm 2030 bằng cách sử dụng mô hình dự báo của Liu và cộng sự và dữ liệu trong giai đoạn 1986-2016. Biến phụ thuộc của mô hình là logarit tự nhiên của lao động sử dụng trong ngành của khu vực và các biến độc lập trong mô hình là giá trị sản xuất công nghiệp và nhu cầu lao động trong năm trước. Kết quả nghiên cứu đã chỉ ra rằng: Nhu cầu lao động công nghiệp tại vùng dân tộc thiểu số và miền núi tới năm 2030 có xu hướng tăng. Đến năm 2030, dự báo nhu cầu lao động công nghiệp sẽ tăng lên 3.136.549 người theo kịch bản tăng trưởng cao nhất của giá trị sản xuất công nghiệp.
Từ khóa: Công nghiệp, dự báo, nhu cầu lao động, phát triển, vùng dân tộc thiểu số và miền núi.
