Reflections for the future

This unique collaboration between Oxford Economics and Cisco Australia reveals the far-reaching implications of technological change for the Australian labour market. Not a single occupation will be unaffected.

Workers will spend less time and effort on routine, predictable functions, and more on those tasks that are less codifiable – or at least less economical to automate at scale – in the parts of the economy that are experiencing growing demand. The result is a reshaping of the workforce across occupations and industries. Our analysis reveals the extent to which today’s labour market falls short of the needs of the future economy, not only in technical skills, but also in softer skills where human workers will maintain a lasting competitive advantage.

The responsibility for preparing the Australian workforce for the future falls to multiple stakeholders: from policymakers to educators, business leaders and workers themselves. A failure to prepare them adequately will constrain the Australian economy’s in its ability to capitalise on the opportunities that new technology can bring.

Below we summarise the challenges that each key stakeholder group will face.

Policymakers

For policymakers, technology’s impact on the labour market poses a dilemma. In a competitive global economy, it is paramount that Australia maintains an environment in which new technologies can thrive. On the other hand, the faster the rate of change, the greater the disruption imposed on the workforce, and the steeper the challenge for workers and businesses to reskill and adapt.
For some workers, the shift implied by our scenario will imply wrenching change. Those whose occupations are in declining demand will have to adapt not only their skillsets, but potentially other aspects of their lives too, such as their working hours or location – to meet the demands of the new economy.
Policymakers must be mindful of the social implications of such rapid change. This means investing in the means to understand the profile of the winners and losers from the disruption: their age, background and geographical location: an early warning system to put measures in place to compensate those bearing the brunt of the change.

In the medium term, this may have implications for fiscal policy, as a matter of redistributing the economic gains to ensure a smooth transition for those who lose out. In the longer term, it also means understanding the impact on the trajectory of the earnings and wellbeing of different cohorts of society. As workers respond to the shifting landscape, what will it imply for the quality of work – the level and security of income and the quality of life across the population?
As part of this challenge, policymakers are also charged with facilitating the skills transition the economy needs to take advantage of the opportunities technology will bring. This means understanding the multifaceted nature of the skills challenge that technological change presents, and the training vehicles to meet it. Some skills, such as mathematics, science and computer programming typically need long periods of formal study and experience. That means a long lead time, expensive educational institutions and dedicated education policies. Others require softer skills, which might shift the impetus to short-courses, mobile learning, on-the-job training and better job matching.

Educators

Australia’s education and training institutions will play a critical role. They must ensure an efficient and relevant pipeline of skilled workers is in place to feed the workforce, to fill emerging skills gaps as quickly as possible.
Alongside the need for formal and technical training provision, our analysis points to the demand for softer, more cognitive and socially interactive skills in the future labour market, compared to today. These skills may require a wholly more flexible and bespoke delivery mechanism. It is not sufficient to focus on new graduates. The scale of disruption requires a much broader base for lifelong learning opportunities, for workers to refresh their skillsets and remain relevant.
Educators must embrace technology solutions to deliver training, and to work in unison with employers to deliver relevant skills where they are most needed.

Employers

On-the-job training and learning-by-doing, have long underpinned the productivity of the workforce. In the next ten years, much of the responsibility for preparing today’s workers for future needs falls at the feet of employers. Businesses and organisations that can deliver relevant skills quickly and effectively will find a competitive edge.
But employers will not achieve this in isolation. An ecosystem of training partners is required across the economy. Cutting-edge training solutions such as remote learning and augmented reality will complement traditional approaches to enable organisations to retain the institutional knowledge and experience of their staff, whilst upskilling their workforce to get the most out of new technological capabilities.

For the Australian economy, the next decade of technological progress and the ingenuity businesses show in its application, will have profound implications for the dynamism of the economy and the nature of work. How well the stakeholders in Australia’s future can capitalise on those opportunities, for the net benefit of the whole population, will depend on how well it deals with the skills transition.