Maximising the benefits of digital economy

Ai Group chief executive, Innes Willox shares key findings from the 2018 Workforce Development Needs Survey on the pressure points in the manufacturing sector.

The pace of change in digital technologies continues to increase across the globe, creating digitally-enabled environments that will affect every manufacturing company. Education and training has been identified as one of the most critical factors shaping workforce outcomes that lead to future-focused companies.

New approaches to education, training and re-skilling must be implemented to maximise the benefits of the digital economy. Change is progressing in our education and training systems – but are they keeping up with the rapid pace?

The Australian Industry Group’s 2018 Workforce Development Needs Survey, “Skilling: A National Imperative,” suggests that in many areas this is not the case. The survey, which provides an important gauge of employer sentiment around skill needs and training practices at a critical time for industry transformation, has found major skills pressures facing employers. Without an education and training sector that can adapt quickly to the needs of the digital economy, Australia’s business sector will suffer competitively into the future.

As businesses adapt to new technologies and the changed conditions under which business is done, they are facing new demands on their workforce capabilities and cultures. Imperatives include higher level skills, advanced technical and soft skills, digital literacy and changed management capabilities to effectively negotiate autonomous work roles and partner with machines. Frequent re-skilling is becoming a constant.

The major pressure points identified in our survey include:

Skills shortages: It is apparent that skills for both current and future- oriented occupations are not meeting demand. Among our respondents, 75 per cent report skills shortages, most often in the technician and trades worker category. Difficulties remain with the recruitment of employees with STEM skills. For the first time in this annual survey, skills shortages were reported for those with skills in business automation, Big Data and artificial intelligence solutions.

Digital skills: The rapid changes through digitalisation are requiring a number of occupational categories to be prioritised for digital technology training and changes anticipated or caused by its rollout. Managers require significant capability improvements in technology/ digitalisation, with employers prioritising them (33 per cent), over technicians/trades workers and administration staff (both 18 per cent), followed by professionals (16 per cent). In the age of digitalisation all workers will need digital skills at various levels.

Literacy and numeracy: With the workforce increasingly requiring foundation skills that include not only literacy and numeracy but digital literacy and advanced soft skills, it is disturbing that 99 per cent of employers are affected in some way by low levels of literacy and numeracy in their workforce. They are dissatisfied with the basic numeracy and literacy levels of over one-fifth of school leaver entrants. It is also a concern that dissatisfaction levels are high for the self-management, planning and organising, problem solving, initiative and enterprise skills of school leavers.

Leadership and management: The digital economy requires a major change in the way work is done and managed as entire business processes and organisational cultures are upended. Being aware of the activities that are most likely to change from a technical perspective allows managers to rethink how workers engage with their jobs and how digital platforms can better connect workplaces.

The survey found that 62 per cent of employers believe a lack of leadership and management skills is having a high impact on the business – an increase on 2016. They report the most significant capability improvements required by managers are in technology/ digitalisation, resulting in managers being prioritised for this training. Reflecting the need for managers to navigate constant change, employers said their capabilities must also improve for problem solving, initiative and enterprise.

Employer actions: Employers are active in implementing strategies to alleviate some of these skills pressures. A greater percentage of employers intend to increase expenditure on training in 2018: the highest level since we began the survey in 2012. There has been an increase in the percentage of employers engaging apprentices/ trainees, with a substantial proportion being of mature age (42.9 per cent). Employers report a significant increase in their internal company training and support from supervisors and mentors to boost literacy and numeracy skills. And companies have steadily increased their links with education and training sectors since 2014 – a vital strategy in the faster moving economy.

As Australian industry transforms through digitalisation it requires the necessary skills to adapt. This in turn will increase the number of people able to be involved in the digital economy. Change is happening at a frightening pace and our education and training systems need to renew at this same pace. These new survey findings provide rich data important in the development of education and training policy, systems and approaches that enable an effective workforce for the future.