Businesses do not invest in new technology to put human workers out of a job, but to strive for greater productivity and higher performance. For every job displaced by technology under our 2028 scenario, there is a productivity gain achieved. By enhancing productivity, new technologies drive down the cost of production, which in turn lowers the prices of goods and services. The consequential increase in demand for these products also creates demand for additional workers. This is known as the “income effect” of our technology scenario and occurs in parallel with the displacement effect analysed in Chapter 2. In this chapter, we forecast the income effect’s impact on each industry sector and occupation group over the next decade.
Our analysis suggests the main growth sectors for jobs over the next decade will be healthcare, wholesale and retail, and professional services. Across these three sectors, 280,000 new jobs will be created as a result of new technology’s income effect — 45% of the gross job creation over the next 10 years.9 Australia’s ageing population is a key driver of the growing demand for healthcare services, with the population aged 65-and-above predicted to grow by 34% over the coming decade, compared to 14% for the entire population. When the income effect is considered in relative terms, other sectors such as finance and insurance and IT and communication also rise to prominence (Fig.7).
9 Gross job creation refers only to increased demand for workers as a result of the “income effect”, not counting the displacement effect analysed in Chapter 2, which offsets this.
The impact of technology’s income effect on different occupations depends on the types of goods and services that people demand. Our analysis shows that rising levels of spending on healthcare and professional services in the next 10 years will result in a marked increase in demand for professional occupations, which includes accountants, lawyers, and marketing professionals. We expect a similar relative increase in demand for service and sales workers (8.5%), despite the levels of automation taking place among this broad occupation type. This is because as the economy grows, people will spend much of their extra money within the wholesale and retail sector, which contains many of these jobs.
This evolution in the shape of the labour market will, of course, take place gradually. As businesses integrate technology solutions at different rates, the opposing processes of job displacement (Chapter 2) and job creation (Chapter 3) occur continuously. Significant new work opportunities will emerge in some sectors just as they are constrained in others, and workers will constantly adapt to the demands of the labour market. In the next chapter, we illustrate how the twin forces of job displacement and job creation implied by our new technology scenario offset each other—and what this will mean for the future shape of the Australian labour market.
