Businesses have been warned they risk being left behind if they fail to keep abreast of the rapidly changing nature of jobs.
And the need to upskill and reskill has been laid bare, with a report into the future of jobs showing more than 40 per cent of the core skills workers use expected to change within five years.
At an Ai Group webinar last week, Sam Grayling, of the World Economic Forum (WEF), which released its latest Future of Jobs report earlier this month, said: “Thinking about the job you do today, in just five years’ time, almost half of the skills you need are going to change.
“If that doesn't show the importance of upskilling and reskilling and how core that is to everybody's work — I don't know how to make it more explicit than that.”
Technology and the green transition are expected to change the nature of nearly a quarter of jobs (23 per cent) by 2027, the report shows.
“There's going to be a lot of change in the labour market,” Mr Grayling said.
“And the question is, what do we do about it? And how prepared are we?”
The Forum’s survey brought together the views of 803 companies – collectively employing more than 11.3 million workers – in 27 industry clusters and 45 economies from around the world.
As the Australian partner to this landmark report, Ai Group contributed the perspectives of our members.
Employers were quizzed on the key factors affecting their business and how those trends were likely to impact jobs.
“The green transition came through as a major impact but also incredibly positive for jobs,” Mr Grayling said.
“Technology change is also going to be huge.
“It was interesting to see just how much difference there was between people regarding technology as a huge driver of job growth and those expecting it to be a significant displacement of job growth.
“The final impact is the rising cost of living and the potential for a global economic recession, both of which are expected to drive a decline in jobs.”
While analytical and creative thinking are currently the mostly highly prized skills, employers will be seeking expertise in artificial intelligence (AI) and big data and leadership and social influence over the next five years.
“Those key skills are rapidly increasing in importance, which makes the need to reskill crystal clear from that perspective,” Mr Grayling said.
ChatGPT is just the tip of the AI iceberg, webinar panellist Innes Willox, Ai Group’s Chief Executive, said.
“ChatGPT came into the market in November last year and has already upended a lot of businesses in the way they gather and use information and data and communicate with others.
“The issue that employers are having is reluctance among their existing workforce to adapt to change.
“They are also struggling to find people with the skills to assist their workforce to navigate their way through this.
“It's the change within jobs that’s at the forefront here; the change in the way that people will be required to do their jobs.
“If we don't get our qualifications set up to meet the needs of the 21st century economy, we're always going to be on the back foot.
“We don't have time to waste. The time for firm action is now.”
The Australian Energy Market Operator (AEMO) projects that just to transition Australia’s existing domestic activities to net zero emissions by 2050, our current electricity generation capacity of about 80 gigawatts will need to expand to more than 280 gigawatts, Tennant Reed, Ai Group’s Director - Climate Change and Energy, said.
“If we look at the scenarios for Australia as a renewable energy superpower — where, one way or another, we are exporting clean energy to the world at scale — those scenarios from the Net Zero Australia project take us to something in the region of 3000 gigawatts of generation capacity by 2050.
“That also entails a lot more investment in energy storage, in transmission lines and in major production capabilities, whether it is hydrogen or ammonia or green iron and green aluminium.”
Flexibility and a willingness for businesses to adapt will be key to ensuring Australia’s skills are where they need to be.
“STEM skills are going to be extremely relevant, and we may need to be quite nimble in scaling up, updating and amending skilling to match the emerging reality,” Mr Reed said.
“Even if we knew today exactly which scenario we would end up with, we would be challenged to roll out the scale of infrastructure involved in these scenarios.
“This means making the maximum use of artificial intelligence, automation and assistive robotics to multiply the productivity of workers is going to be essential if we go from 80 gigawatts to 3000 gigawatts. That's a tall order.”
Modelling exercises suggest that anywhere between 100,000-150,000 to more than 700,000 extra skilled workers could be needed.
“There are huge opportunities,” Mr Reed said.
“The most certain to be realised is in the production of minerals for a global, clean economy.
“The world’s output of the componentry that goes into a clean economy — solar panels, wind turbines, towers, transmission lines and electrolysers — also has to expand massively.
“Directing skills and investment into those opportunities is going to be a big challenge.”
Climate change investments and the broad application of Environmental, Social and Governance (ESG) standards are significant global trends but much stronger in Australia, the WEF report reveals.
Almost two-thirds (65 per cent) of employers globally expect climate change-induced investments to be a major trend, compared to four in five (80 per cent) business leaders in Australia.
The findings are similar for ESG standards — 80 per cent globally to 90 per cent for Australian businesses.
“This speaks to the awareness of the challenge that exists in Australia and recognition that these issues are driving change and will require a lot of work,” Mr Grayling said.
Australian views also differ from the rest of the world when it comes to the impact of supply shortages.
“Globally, more than two-thirds of businesses expect to be transformed by supply shortages and rising costs, but it's almost four in five (78 per cent) for businesses that operate in Australia,” Mr Grayling said
“Businesses in Australia and New Zealand have been feeling this right from the start of Covid.
“Everyone has felt the supply shortages, but it's exacerbated when you're that much further from some of the core supply chains.”
However, such disruptions also bring digitalisation opportunities, Louise McGrath, Ai Group’s Head of Industry Policy, said.
“Digital supply chain processes give companies real-time data,” she said.
“You're predicting problems, which helps you to prepare — unlike in traditional supply chains where you're constantly reacting.
“Businesses need to be thinking: ‘Do I need to digitalise my existing business processes, or do I need to think about the outcomes that I'm hoping for and the outcomes that my customers need and what is a digital solution for that?’
“This is why skill shortages don’t just relate to digitalisation or cyber security, they also relate to big, strategic thinking.”
The survey asked businesses about the factors preventing their industry from transforming.
Globally, the top two issues are skills gaps in the local labour market and an inability to attract talent.
“That’s the case in Australia, as well, but what's interesting is that it's more severe in Australia than it is in the rest of the world,” Mr Grayling said.
“Globally, 60 per cent identified that skills gap, but that's up at 65 per cent for Australia.”
The inability to attract talent goes from 53 per cent globally to 64 per cent for Australian businesses.
In Australia, a third of businesses expect the Government to contribute to funding for reskilling and retraining, compared to 22 per cent of businesses globally.
There is also a greater demand by Australian businesses for changes to Government policy on immigration laws.
“Almost half of Australian companies believe that changes to immigration laws and foreign talent would increase talent availability — almost double the global average,” Mr Grayling said.
Businesses can’t afford to bury their heads in the sand, Mr Willox said.
“If businesses aren’t aware of what's happening in their competitive environment in terms of technology change and its impact and through their supply chains, they're going to get left behind very quickly,” he said.
“They’ve got to keep an eye on what’s happening, try to keep abreast of it and adapt to what's going on.
“There are a lot of unknowns, and we’re going to navigate a lot of choppiness, but we have to be in control of our own destiny and not just let things happen to us.”
Save the date: Ai Group Centre for Education and Training's next webinar, How will new Jobs and Skills Councils build the right workforce for Australia?, will be held on Thursday, June 8, 11am-noon AEDT. Register here.
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Wendy Larter is Communications Manager at the Australian Industry Group. She has more than 20 years’ experience as a reporter, features writer, contributor and sub-editor for newspapers and magazines including The Courier-Mail in Brisbane and Metro, the News of the World, The Times and Elle in the UK.
