Inquiry into innovation and creativity: workforce for the new economy
Submission 28
Inquiry into innovation and creativity: workforce for the new economy
Submission 28
Response to the Standing Committee on Education and Employment Inquiry
into Innovation and Creativity
SUBMISSION - STANDING COMMITTEE ON EDUCATION AND EMPLOYMENT
INQUIRY INTO INNOVATION AND CREATIVITY
A variety of changes will influence Australia including globalisation, demographic and social change,
rapid technological advancements and the development of new business and employment models.
This poses some challenges, but also holds opportunities for the way we work consume and interact.
For example, a recent report by CEDA 1 suggests that around 40 per cent of current Australian jobs
face a high probability of being replaced by computers in the next 10 to 15 years and a further 18.4
per cent of jobs have a medium probability of being automated. Jobs that involve low levels of social
interaction, low levels of creativity, or low levels of mobility and dexterity are more likely to be
replaced by automation. At the same time, new jobs will be created that will involve ingenuity,
problem-solving, advanced reasoning and social skills. Rather than competing with machines and
computers, people will use them to do work that is more interesting and fulfilling.
The Department of Employment is progressing a research and policy agenda relating to the future of
work. This will consider the changes in the Australian labour market and develop future-focused
strategies to enable people and organisations to take full advantage of emerging opportunities.
The Department’s priority is adjusting policy settings to position current and future generations of
Australians to support themselves and contribute to our economy and society.
Future of Work Research
Tomorrow’s Digitally Enabled Workforce
•
The Department partnered with the Commonwealth Scientific and Industrial Research
Organisation (CSIRO), the Australian Computer Society, Boston Group Consulting Digital
Ventures and the Australia and New Zealand Banking Group to produce the ‘Tomorrow’s
Digitally Enabled Workforce’ research report. The aim is to inform strategic choices of
governments, companies, communities and individuals in planning for economic growth,
productive industries, cohesive communities, rewarding careers and improved quality of life.
•
The report examines megatrends and scenarios for the future of work in Australia over the
coming 10–20 years. It explores and describes plausible futures using the CSIRO strategic
foresight framework.
•
The report includes analysis of the skills needed for the jobs of the future and extent to which
students are graduating with these skills:
o Automation, robotics and artificial intelligence are heightening the importance of skills
in creativity, problem solving, advanced reasoning, complex judgement, social
interaction and emotional intelligence.
1
Australia’s future workforce?, (2015), Committee for the Economic Development of Australia,
http://adminpanel.ceda.com.au/FOLDERS/Service/Files/Documents/26792~Futureworkforce June2015.pdf
Inquiry into innovation and creativity: workforce for the new economy
Submission 28
o
o
o
o
Science, technology, engineering and mathematics (STEM) knowledge is associated with
75 per cent of the fastest growing occupations; yet, there has been a 35 per cent drop in
enrolment in information technology subjects at universities since 2001. By 2030, China
and India are expected to produce over 60 per cent of the STEM qualified workforce for
G20 countries.
Service industries are major employers in the Australian economy. This trend is likely to
continue into the future as we move to a knowledge-based economy. Social interaction
skills and emotional intelligence will become increasingly important.
Digital literacy is likely to be a threshold requirement for most jobs. Although rapid
change in software and hardware will continue to make specific skills redundant, there
are likely to be enduring, fundamental concepts of digital literacy which will remain
important.
In tomorrow’s job market, adaptability and resilience will be of greater importance. The
increased pace of change, fuelled by technological innovation and globalisation, will
increase the need for workers to handle minor and major transitions. Everyone will need
entrepreneurial skills and aptitudes.
•
Tomorrow’s Digitally Enabled Workforce also looks at current and projected industry trends:
o Structural changes over recent decades have seen declining employment in
manufacturing and agriculture, while a far greater number of jobs have been created in
the expanding service industries, which now account for over two-thirds of the
Australian economy.
o Labour intensive service industries are major employers, with healthcare and social
assistance now the largest single employing industry, accounting for over 12 per cent of
the total workforce. The largest employment growth over the next five years is
projected for the health care and social assistance industry followed by the education
and training industry.
o Employment in the creative economy has been growing at an above average rate
compared with the economy as a whole. The sector is contributing 7-8 per cent of gross
domestic product growth annually.
o The recent mining boom has substantially affected the labour market. Between 2003
and 2013 mining industry employment increased more than threefold, though this still
only equates to around 2 per cent of the workforce. The increased demand for labour in
mining and related industries contributed to wage growth, which peaked at 6.7 per cent
in 2008. Rapid growth in labour costs, coupled with slower growth in labour productivity
and a stronger Australian currency, reduced the competitiveness of Australian firms in
the international market.
o As the mining boom ends and the rate of technological change increases, the labour
market in Australia is transitioning again.
•
A summary of the report can be found at Attachment A.
•
The research report was launched by the Minister for Employment, Senator the Hon Michaelia
Cash on 26 February 2016, and can be accessed at www.csiro.au/Tomorrows-Digitally-EnabledWorkforce.
Inquiry into innovation and creativity: workforce for the new economy
Submission 28
Gig Economy research
•
The Department is undertaking research into the nature and extent of participation by
Australians in work enabled by online platforms, often referred to as the gig economy. The gig
economy uses online platforms and smartphone apps to match independent workers to tasks in
real time. Tasks are usually short-term or one-off in nature. Despite a great deal of media
attention, and assertions that this sphere of work is growing 2, the trend is not visible in more
traditional data sources, such as ABS statistics.
•
The Department’s research project will provide a clearer understanding of the people who are
active in the gig economy, including the range and types of activities undertaken, motivations for
participation, and pathways into the gig economy.
•
Gig economy style work exemplifies a growing requirement for people to be entrepreneurial and
adaptable in their methods of getting work. Gig workers need the ability to define a unique
value proposition and be able to market oneself to employers and clients.
Cross-Government Collaboration on the Future of Work
•
The future of work is part of a huge global disruption and transformation which will change the
Australian economy and community. A nuanced cross-portfolio response is required to position
the country to thrive in, rather than merely survive, these disruptions to the labour market.
•
Formalised engagement across government agencies is required to facilitate collaboration on
the future of work in Australia. There is a need to collectively build future focussed strategies in
a consistent and comprehensive way which will allow people and organisations to make the
most of new opportunities as they arise and support the community to manage the transition.
•
The Department has convened a senior executive level inter-departmental committee focused
on policy stewardship of the Future of Work agenda. The Future of Work Champions will deliver
tangible results such as building a knowledge base across government, addressing data gaps,
identifying synergies and supporting policy development.
•
The Department also manages the Future NetWork, an officer level forum for cross-department
discussion on the future of work. This NetWork is designed to share information and build
capability.
2
Daniel J Edelman Inc.1 Intelligent Engagement Freelancing in Australia: 2015 Results Deck October 27, 2015
http://www.slideshare.net/upwork/freelancing-in-australia-2015/1
Inquiry into innovation and creativity: workforce for the new economy
Submission 28
Attachment A – CSIRO Report Summary
Tomorrow’s Digitally Enabled Workforce – megatrends and
scenarios for jobs and employment in Australia over the next
twenty years
This report examines plausible futures for jobs and employment markets in Australia over the
coming twenty years, towards 2035.
Megatrends:
Megatrends are gradual and deep-set trajectories of change that will at some point reshape the
business and policy environment. The megatrends most relevant to labour market change are:
1. Steep growth in computing power, device connectivity, data volumes and artificial
intelligence
2. Changing employment markets and organisational structures
3. The era of the entrepreneur
4. Divergent Demographics
5. Continued growth of the service sector
The megatrends are examined in the context of four different possible future scenarios:
1. Despite linear advance in technology, penetration is bumpy and uneven. There is little
change to business structure or process. The workface is similar to today.
2. The promises of artificial intelligence and automation systems have been fully realised.
While technological advances have replaced many jobs, there are few changes to
employment models.
3. Exponential technology growth and innovation, socially inclusive employment models, many
opportunities for individuals and society.
4. Technology has advanced more slowly and task automation hasn’t had much impact on the
bulk of people’s jobs. Organisational structure, culture and practices have changed
substantially.
Policy Implications
The megatrends and scenarios hold implications for the ways in which individuals manage their
careers (and those of their children), the ways via which companies manage their workforce and the
ways via which government regulates and manages the labour market.
1. Education and training are becoming ever more important.
There will be fewer and fewer jobs within the service sector of the economy – within which
the bulk of Australians are currently employed – which do not require skills and/or training
qualifications.
2. New capabilities are needed for new jobs of the future.
Lifelong education and training for all Australians needs to prepare both young and old for
new and different jobs and employment models.
Inquiry into innovation and creativity: workforce for the new economy
Submission 28
3. Digital literacy is needed alongside numeracy and literacy.
To enter the labour market of the future, Australians will need to be literate, numerate and
digitally literate. These capabilities will be threshold requirements for most jobs.
4. The importance of Science, Technology, Engineering, and Mathematics (STEM) will change.
STEM skills are likely to be needed in many of the better paid jobs of the future. In general
STEM participation is in decline. There are good reasons to believe it will be increasingly
important for getting a good job in the future
5. New aptitudes and mindsets will be needed to handle a dynamic labour market.
In tomorrow’s job market adaptability, resilience, buoyancy and entrepreneurial capabilities
will be of increasing importance.
6. Improving workforce participation in vulnerable demographics will be important.
Finding positive ways to improve workforce participation rates for vulnerable demographics,
such as low skilled male workers, is an increasingly important national priority. The number
of working aged men not in the labour force has more than doubled since the late 1970s.
7. Tapered retirement models will become more common.
There is a need to develop tapered (and other new) retirement models that productively
harness the skills of an aged population and ensure positions are available for younger
labour market entrants.
8. Perceptions and norms about job types will be challenged.
Gender, age and cultural imbalances sometimes occur in certain professions as a result of
perceptions by employees and employers about the ‘right person’ for the job. Challenging
these perceptions will be increasingly important for maintaining Australia’s workforce in the
more dynamic and rapidly changing employment market of the future.
9. New models to forecast job transition requirements will emerge.
Individual career choices in the fast-changing digital economy will require more real-time
and fine-grained modelling, drawing upon holistic and dynamic data. Decision models are
needed by companies, industries, government agencies, regions, State/territories and
nations which can:
a. Predict existing jobs (and tasks) likely to be automated;
b. Identify new jobs likely to be created; and
c. Identify transition pathways via which individuals, organisations, industries and
societies can make the switch as smoothly as possible.
10. Improved understanding of the peer-to-peer (and freelancer) economy.
There are, as yet, unanswered questions about how private and public sector organisations
and individual employees connect with the newly arriving peer-to-peer labour markets:
a. For what types of jobs, tasks and industries does a freelancer model work well and
where does it not work?
b. Should (and how should) companies transition from current arrangements to a more
freelance workforce?
c. How is fairness (for both employers and employees) ensured by government
regulators within a freelancer workforce which may be delivering a large volume of
micro-transactions across jurisdictional borders?
d. What is the demand for offices and workspaces and what is the impact on the
design and functioning of cities with a more agile, networked and connected
population of portfolio workers?
Inquiry into innovation and creativity: workforce for the new economy
Submission 28
An historic level of change
There are several factors creating unique conditions, or “a perfect storm”, at this point in history:
• The first relates to rapid advances in, and adoption of, digital technology.
• The full impact of exponential and/or steep growth in computing power, device connectivity,
data volumes and artificial intelligence is yet to be felt within Australia’s labour market.
• The internet of things is at the early stages of growth. In 2006 there were 2 billion smart
connected devices, in 2015 there were 15 billion devices and by 2020 there will be 200
billion devices. Major growth is predicted in healthcare devices and manufacturing.
• Australia has high rates of internet access and mobile connectedness. This is likely to
increase in regional areas.
• Internet access is growing globally. There will be increased competition for jobs that can be
performed online.
• Rapid advances are being made in artificial intelligence.
• Cloud computing has arrived, enabling lean start-ups connecting diverse groups of workers.
The second is a shift in the institutional landscape associated with the rise of digital technologies:
• Tech companies are achieving marketing capitalisation rates higher than historical patterns
and with fewer employees.
• Peer-to-peer business models are emerging and there is a growing population of portfolio
workers.
• Organisational structures are becoming flatter.
• Australia offers an environment conducive to entrepreneurship; however, Australian
venture capital funding is declining.
The third factor creating the perfect storm is demographic change:
• In the next decade Australia’s workforce will be older and more culturally diversified.
Nearly every fifth Australian is expected to be over 65 years old in 2035 compared to onesixth of the population today.
• Chronic and lifestyle diseases are on the rise. Nearly two thirds of Australian employees are
overweight or obese. This rate may exceed 70 per cent by 2025.
• Over 80 per cent of annually arriving migrants are of working age, while only 54 per cent of
the residents are of working age.
• Mental ill-health is highly prevalent in the Australian population including in employees.
• Higher education enrolments are increasing and so are the costs.
• Online education is likely to complement university (already does). Free learning
opportunities are increasing and more widely available.
Inquiry into innovation and creativity: workforce for the new economy
Submission 28
New Jobs
Looking forward, workers with a mix of technical skills and interpersonal aptitudes will have the best
prospects for meaningful work. Jobs involving creativity, complex judgement, advanced reasoning,
social interaction and emotional intelligence are likely to grow in the decades ahead, and are less
likely to be affected by advances in automation and artificial intelligence.
The report puts forward six examples of new jobs that may be created in the coming years based on
the megatrends and scenarios:
• Big data analysts
• Complex Decision Support Analysts
• Remote Controlled Vehicle Operators
• Customer Experience Experts
• Personalised Preventative Health Helpers
• Online Chaperones (managing risks with identity theft, reputational damage, social media
bullying and internet fraud)