Australia is in the grip of a skills shortage afflicting some of the most important areas of the economy.
The recently released Australian Universities Accord says that to meet future skills demands, “at least 80%” of the workforce will need tertiary qualifications by 2050. The current number of workers with post-high school training in Australia is less than 60%.
This has implications for the universities sector, but also the wider economy too.
The skills shortage list highlights that 36% of occupations have a shortage of qualified workers. Teachers and nurses are in particular short supply, with terrible implications for the state of the public health and education systems.
The IT and tech sectors are also suffering from widespread shortages. Boosting Australia’s tech sector has been a priority for successive governments, in part to address skills shortages within the public service itself.
Last year, 76% of government agencies reported a shortage of information communications technology (ICT) workers.
Cyber security is one of the areas of greatest shortage, with the private and public sectors alike struggling to attract talent.
Tech Council of Australia CEO Kate Pounder thinks we need to plan more to avoid skills shortages in the future.
Speaking at the Universities Australia Solutions Summit, Pounder said the tech council had been speaking to both the government and opposition about setting clear targets for the future of her sector.
She said failure to understand the way technology interacts with the jobs and skills market was holding back productivity.
“Tech jobs have been growing at two to four times the rate of the rate of the average job in the economy over the last few decades, but our training rates have been stagnant … That’s just a recipe for accumulating a big structural shortage in your economy,” she said.
“Ahead of the last election, we went to both parties and said ‘we’re going to ask you one thing, and that’s committing to a target of having a million Australians in tech jobs by 2025, 1.2 million by 2030. To their credit, they both agreed and it’s national policy now.”
One of the resistances Pounder has found to transition to a more technologically advanced economy is fear that robots and automation are going to take people’s jobs.
In her view, this misunderstands the way labour markets respond to innovation. Historically speaking, technological innovations like generative AI have spurred moral panics in the political class and the labour movement, with the fear jobs lost in one area will never come back.
In one of the most enduring economic theories in history, Austrian economist Joseph Schumpeter demonstrated this “creative destruction” generally results in a similar number of jobs being created in the mid to long term, albeit higher-skilled ones.
Films replacing Vaudeville entertainment, and the car replacing the horse remain favourite examples of this among economic historians. While the invention of the car was predicted to drive coach companies and farriers out of business, it created new jobs in making and fixing cars.
Pounder said conversations with politicians and stakeholders on this front had been frustrating because they failed to see the way greater efficiency in this area would lead to a different, but higher-skilled and potentially more equitable economy.
“If you chatted to people in the community or sometimes the media or politicians and you talked about tech and jobs, they thought you were talking about automation, and it was negating jobs. I think that was a barrier at the time to having a conversation about the opportunities for jobs,” she said.
“That was a shame, because not only are these jobs really critical to productivity and national security, I’m a big believer they’re really crucial for equity.
“These are some of the best-paid jobs in the economy, they’re some of the most dynamic, have the highest rates of flexible work, and offer some of the best job security over time because they’re so in demand.
“Particularly for people coming from disadvantaged backgrounds, it’s one of the main ways to get ahead in Australia today.”
On paper, this is a simple problem with a simple solution, but Australia’s demand-driven university system means it’s not easy for a government to simply decide they are going to have more tech graduates.
An attempt was made by the former government to redirect potential arts students into degrees it considered more economically productive.
The Job Ready Graduates Program increased fees for humanities and related degrees to encourage students to pick a major with better job prospects. Communications and human geography-related degrees increased by 113% as part of this policy, despite both having relatively high global demand.
The Universities Accord final document said the program had “failed”, and needed to be replaced.
Pounder said the failure of this program didn’t mean the government hadn’t had some success in getting a better match of graduates and jobs.
“We’ve actually made real progress, like the establishment of Jobs and Skills Australia and the very good work they’re doing on long-term workforce planning, particularly in emerging areas,” she said.
“It’s great to see us make progress with our immigration system.
“Everyone wants to change — I don’t think there’s a lack of consensus problem in that, but I think we haven’t always been as prepared to change the processes we use.”
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