Kota Kinabalu: The energy industry’s future competitiveness will depend not only on attracting investment and adopting artificial intelligence (AI), but also on developing the next generation of skilled workers, said Boston Consulting Group (BCG) Managing Director and Partner Uday Vir Singh.
Speaking at the Sabah Oil, Gas and Energy Conference and Exhibition (SOGCE) , Vir Singh said governments, investors and operators must act together to address three interconnected challenges: growth, AI-driven transformation and workforce capability building.
“The future isn’t about one of these priorities in isolation. We as a community have actions along all these three dimensions, be it growth, be it AI, be it building capabilities,” he emphasised.
Vir Singh warned that years of underinvestment are beginning to affect industry performance and could constrain future growth if not addressed.
“There needs to be heavy investment that needs to come back to growth,” he said, citing opportunities across upstream energy, power and gas. However, he argued that traditional approaches will not be enough.
“We need to consider it with new paradigm, partnerships and investor models as we move on,” he stressed.
At the same time, he challenged a common perception among executives that artificial intelligence has yet to generate meaningful value.
“I have spoken to a lot of senior leaders and one theme comes back over and over again — that AI is not delivering meaningful value,” he said. To illustrate his argument, he pointed to productivity gains achieved by Amazon over the past decade.
He noted that a worker who handled about 175 packages 10 years ago now manages approximately 3,870 packages.
However, he stressed that technology alone is not the differentiator. Drawing on BCG research, Vir Singh said only around 5pc of companies are successfully capturing value from AI at scale, while the remaining 95pc are still struggling to move beyond experimentation.
“The difference lies in how organisations approach transformation. Most companies focus narrowly on technology, use cases and products currently available in the market.
“The most successful organisations instead start by imagining how work will be performed a decade from now.
“How will a piece of work be delivered in 2035? How will the world look like in 2035? So working backwards from that and then thinking about what does it take, what changes do I want to make in my business, in my processes, in my organisation, in my capabilities,” he explained.
While AI presents significant opportunities, Vir Singh also highlighted what he sees as one of the industry’s biggest risks: the erosion of human judgment and expertise.
Using generative AI tools as an example, he noted that experienced professionals can quickly identify incorrect outputs because of decades spent developing technical knowledge and practical judgment.
In this regard, he highlighted that the challenge for companies is ensuring that younger workers continue to develop critical thinking and technical judgment even as AI takes over more routine tasks.
The issue becomes even more urgent when viewed against the industry’s workforce needs. Vir Singh said the global energy sector will require an additional 15 million workers over the next decade, while many experienced employees are expected to retire within the next five to 10 years.
“These experienced workers who hold the knowledge and skills in their hands, they are going to walk out in the next five to 10 years,” he said. “Who is going to replace them?”
To meet that challenge, he called for greater investment in universities, talent programmes and workforce development initiatives.
“We need to invest in those people through universities, through talent programmes, and make it work,” he said.
Vir Singh concluded by urging all stakeholders to play their part. Governments must build talent pipelines and investor ecosystems, investors must bring new partnership models and capital, and operators must use technology to improve performance.
For Sabah and the wider energy industry, he said success will depend on advancing all three priorities simultaneously – growth, AI and capability building.
“That is going to help the energy sector make that step change in performance to be the next frontier, not only for Sabah and Malaysia, but also for the world,” he said.
