A convergence of trends will see the sun set on many low-skilled jobs to be replaced by a growing cohort of highly-skilled, mobile workers, new research says.
A report released this week by the Centre for Australian Economic Development says this new age of workers will be in the technical and professional services across the globe and will be often in the office virtually, via telecommute.
Australia’s Future Workforce? brings together the work of 28 researchers and business leaders across 20 articles examining the trends that are shaping our economy, industries and labour force.
On the downside, it predicts that more than five million jobs, about 40 per cent of the workforce will likely be lost in the next 10 to 15 years due to technological advances such as automation, Big Data, the Internet of Things and Smart systems.
A further 18.4 per cent of jobs are classified as having a medium probability of being eliminated.
The jobs most likely to be shed are those that involve low levels of social interaction, low levels of creativity, or low levels of mobility and dexterity.
By contrast, the jobs growth, according to several of the contributors will be in science, technology, creative industries, professional services contracting, information technology and personal services provision.
CEDA chief executive Professor Stephen Martin said there needed to be greater investment in innovation and appropriate education.
“The pace of technological advancement in the last 20 years has been unprecedented and that pace is likely to continue for the next 20 years,” he said.
Automation had replaced some jobs in areas such as agriculture, mining and manufacturing. But the health sector, “largely untouched” by technological change so far was likely to come in for a shakeup.
Professor Martin said a culture of innovation needed to be led by government through education, innovation and technology policies “funded adequately”.
“Our labour market will be fundamentally reshaped by the scope and breadth of technological change, and if we do not embrace massive economic reform and focus on incentivising innovation, we will simply be left behind in an increasingly competitive global marketplace.”
So far the commitment needed to link education and innovation policy with was “appalling” compared with other countries.
“For example the five Industry Growth Centres announced last year by the Federal Government should be critical in driving innovation but only $190 million has been allocated over four years.
“In comparison, the UK Catapult Centres, which they are based on, have been allocated almost $3 billion over the same period.
“The German Fraunhofer Network, the Netherlands’ Top Sectors Strategy and US National Manufacturing Institutes have had even larger allocations.
“If we expect to compete with countries such as these as a smart and innovative economy then we need to get serious about how we invest in driving innovation.”
Digital skills needed
Australian Workforce and Productivity Agency former head of Secretariat, Sue Beitz in her paper, Developing the capacity to adapt to industry transformation identified the need for strategic investment of public resources in digital skills, as there is currently a significant shortage in this area.
“In Australia, the composition of economic activity has shifted from goods producing industries (as reflected in the decline of manufacturing) to the rise of person and knowledge-based service industries,” Ms Bietz wrote.
She pointed to research by Wilkens and Wooden that showed that in the last two decades just two sectors had dominated in importance – professional, scientific and technical services, and healthcare and social assistance.
Economic change had favoured jobs in the most skill-intensive areas, she said.
“The digital revolution so far has mainly created jobs for highly skilled workers in entirely new occupations and industries. ‘Big Data’ architects, information operating system developers, digital marketing specialists and data scientists are all jobs that barely existed five years ago.”
Video and audio streaming, internet auctions and social networking services were all new industries driven by technological.
“Most of the jobs in these occupations and industries share one common characteristic: they are more skill-intensive than the jobs they replace,” Ms Bietz said.
The mobility of work, rather than workers, is a technology-driven trend she sees as playing a greater role in the future of work.
Flexible work arrangements such as teleworking, outsourcing, virtual teams, international placements and contracting, crowdsourcing and job sharing will be supported by technologies to make work, rather than workers, mobile.”
Enterprises could benefit from access to an expanded pool of resources and talent and lower costs for physical resources and energy.
There are challenges
Management challenges from this would include the need for new work practices to manage a global workforce and a huge variety of inputs.
“The 24/7 nature of work that will eventuate as workers in one location begin the work day just as those on the other side of the world are packing up for the day is likely to increase the intensity of work,” Mz Bietz said.
“Workers across the world still need to respond to each other’s emails, meet and teleconference occasionally, which will lead to some work outside regular working times. Managing the resilience of the workforce, the diversity of the team and minimising conflict is looming as a major concern for senior managers.”
Another trend likely to intensify would be for consumers to make “instant switch” between products or service providers, requiring greater innovation and flexible responses.
Individuals might need to treat their career as a business, taking on more responsibility for their own education and investing in skills and professional development.
“Evidence to the UK Digital Skills Taskforce showed that more employers were looking for creativity alongside technical skills, and that successful digital companies now ‘fuse’ the technical and creative skills of their staff.
Capital is short, so could super funds help?
The biggest barrier she identified to innovation in Australia is lack of access to funds, particularly venture capital, with Australia ranked 16th in the OECD for the number of venture capital deals relative to gross domestic product.
The national superannuation pool could potentially become a source of venture capital, and it is recommended the government could examine the rules and regulations ar9ound superannuation investment to ensure there are no barriers to venture capital investment.
In Where the jobs are, IBISWorld chairman Phil Ruthven pointed out that the nation has created more jobs than it lost over the past five years, and that the growth of both household and business outsourcing is creating new opportunities.
“We generally know where the jobs are being lost; and knowing which jobs are a lost cause is important to avoid investing expensive tertiary education in the wrong areas and scarce investment capital that could go into growth industries,” Mr Ruthven said.
“Ditto for any taxpayer-funded government subsidies and feather-bedding. But knowing the reason why more jobs are being created and where they are is more important.”
Key outsourced jobs, likely to grow, include in the road transport industry, cleaning, catering, property maintenance, engineering, painting, carpentry, security systems, surveillance services, HR functions such as recruitment and training, reception personnel for serviced offices, accounting, superannuation administration, software development and writing, cloud computing, IT outsourcing, property trusts, property management, marketing, warehousing and delivery, database services, strategic and other consulting, franchising and other activities.
“The value of these services in the new industries is valued at over $570 billion in 2015. Yes, there are net new jobs here, but less than the revenue figure might imply. This is due to the fact that much of the value pre-existed when these activities were done internally within businesses on a DIY basis,” Mr Ruthven said.
The major benefits of outsourcing include:
- Greater skilling of employees by specialist supplying firms where the activities are core to the new supplier, unlike the outsourcing firms;
- More focus by the outsourcers on their core activities; and
- Better services and lower costs in due course to businesses and the nation.
Big need for faster broadband
The major concern he identified in terms of the immediate future is Australia’s lack of fast broadband, “one of the keys to information dissemination, higher education, creativity and productivity.”
Australia might have a standard of living among the top 10 out of 230 nations and sovereign states, we dropped out of the top 40 for broadband speeds by 2014.
“This threatens our progress in the most dynamic regions of the world in which we are a member (the Asia Pacific and Indian subcontinent, the Asian mega-region)”
Jobs growth is not in question – what we need is creative investment
“Jobs growth is not in question for reasons outlined.
“We now need to ensure creativity, productivity and competitiveness in a freer trading world with the appropriate pervasive utility (ICT and fast broadband of over 100mb/second) that is already holding us back from faster growth through lack of investment and speed of availability to our 2.2 million businesses (over one million employing staff other than owners); and our 9.3 million households facing an inevitable online world for information, education, working, spending and communicating.”