Our 10-year technology scenario explores the competing effects of technological change on the Australian labour market. In some cases, the growing economy will create enough jobs in a given sector or occupation group to outweigh the displacement of workers brought about by new technology. In other sectors and occupation groups, the opposite will be true, and they will shrink. As the two forces interact across all strata of the economy, the new shape of the Australian jobs market will take shape.
Our analysis suggests healthcare will be by far the most notable net job creator in Australia over the next decade. We predict a net expansion of around 80,000 jobs in this sector (see Fig. 9 for a breakdown of the income and displacement effects for each sector). Tourism and wholesale and retail are both also predicted to experience significant net increases in their workforces, totalling 22,000 and 20,000 workers respectively. Other sectors will see their levels of employment shrink. These are the sectors that are ripe for technology-driven productivity improvements which will outcompete workers in the completion of important tasks. According to our model, the fastest-shrinking sector in employment terms will be construction, where the use of drones, cloud-based software applications, and wearable technologies all have the potential to enhance productivity while also reducing the risks faced by workers. This is predicted to result in a net loss of more than 70,000 construction jobs in Australia over the next decade—equivalent to around 8.4% of the sector’s current workforce. A further 33,000 jobs are predicted to be lost overall in the manufacturing sector as a result of technological change, equivalent to 5.5% of that sector’s workforce.
Observing the overall impact through an occupational lens, our analysis suggests the greatest absolute burden from technological change will fall on craft and related trades workers— a category that is projected to shrink by 80,000 jobs over the next decade. In contrast, the category that will experience the largest net expansion, with more than 90,000 jobs created, is professional occupations, which includes nurses, teachers, and software developers.In relative terms, demand for extra workers is predicted to be strongest in service and sales roles. Our scenario suggests a 5.1% net increase in the demand for these workers in 2028, compared to a decade earlier. In stark contrast, vehicle and machine operators and assemblers are in line for the largest net reduction in demand, with 10.6% fewer roles predicted in 10 years’ time (see Fig. 10).
To illustrate the implications of this shift in demand for workers, we present the net employment impact from an alternative perspective in Fig.11. Each dot on this chart represents an occupational category. Those located below the green diagonal line are the categories that will demand additional workers in our 2028 scenario, with new job creation outweighing the number of jobs displaced. The occupational categories expected to experience the greatest net job creation (in relative terms) are those that are horizontally furthest from the diagonal, including health professionals and ICT professionals. This distance represents the net level of job creation, relative to the size of each sector.
On the other hand, occupation categories situated above the diagonal line on Fig. 11 will experience net job redundancies, with the negative displacement effect outweighing the positive income effect. This is the case for machinery and metal workers, and drivers and mobile plant operators, for example, whose job functions are in line for considerable disruption from new advances in robotics and autonomous vehicles. For this group of occupations, the vertical distance above the diagonal represents the net level of job destruction, relative to the size of each sector.
Underneath the high-level rebalancing of employment across industries, more complex dynamics are taking place. Businesses will respond to new technology based on the characteristics of their own workforce and production processes. Workers will be drawn into new jobs based on the changing demand for goods and services. The effect within an industry, therefore, is not uniform for all employees. Similarly, the impact on a particular occupation group will differ depending on which part of the economy they are employed in. For example, clerical support workers are expected to shrink in number considerably over the next decade, by more than 23,000 in our scenario. However, that is not the case across all sectors. Fast-growing sectors such as healthcare and hotels and restaurants are still predicted to recruit new clerical workers in our scenario, as the growth in demand in these sectors outpaces the potential for automation. To shed further light on these patterns, we have pulled together our sectoral and occupational analyses in Fig. 12, overleaf. This table summarises the net changes in employment between every sector and occupation group, with dark red squares indicating the largest overall job losses, and dark green the biggest overall job increases. The table thus provides a detailed insight into the way the Australian labour market will reorganise itself, with work gravitating towards roles in which humans can add most value working alongside technology, and towards industries that supply the goods and services for which there is most growth in demand. All workers will be forced to adapt, but the transition will be much harder for some than others. Some workers will remain employed in their current field but will need to adapt to the evolving demands of their role. Others will need to transition to new roles or new industries altogether. The routes that these disrupted workers take to their new roles are what defines the skills challenge for the Australian labour market. In the next chapter, we employ Oxford Economics’ Skills Matching Model to analyse this skills challenge in greater depth.
