Ai Group research has been finding shortages in trades and technician workers for over two years. In January employers reported specific difficulties finding boilermakers/welders, electronic technicians, engineering maintenance operators, project and manufacturing managers and sales people.
These cracks are merely the beginning of a more profound shift in the skills landscape in Australia and across the globe. As Australia dives headlong into digital transformation, new ways of working are changing the very nature of work and reshaping the economy. The plethora of “Future of Work” summits and conferences is testament to this.
As companies explore their future capability and skill needs one thing is clear: human capital investment is more important than ever. For technology-rich environments all companies need high-skill workers interacting closely with technology; workers who can shift towards activities that complement the functions machines are starting to perform in their place; and workers with higher proficiency in literacy, numeracy, problem solving, critical thinking and analytical skills.
Automation is now moving beyond routine manufacturing activities and has the potential to transform sectors that involve a substantial share of knowledge work. Advances in artificial intelligence, 3-D printing, unprecedented computer power, sensor technology and big data, are supported by major technologies that are changing the links between technology and work. It has the potential to involve big cost and process savings for business. Robotics and machine learning are rapidly making inroads into activities that previously have had a low potential for automation.
Despite fears about the future, digital transformation will create new opportunities, new markets and new jobs. While many existing jobs will need to be reshaped, if adopted successfully and combined with positive organisational change, training and effective managerial practices, digital transformation will be a net positive for the workforce.
There are many examples of jobs that have increased in occupations that have been partly automated, as overall demand for their remaining activities has continued to grow. Technological developments also have a history of creating higher levels of income, which tends to create more jobs overall.
When everybody’s job is likely to change to some degree, and new skill profiles will be required, the characteristics of agility, resilience, and flexibility in people will drive successful organisations. It will be the most adaptable companies that benefit the most from digitalisation.
The big danger for our economy is that a large proportion of our workforce still does not effectively use digital technologies at work or have adequate digital, cyber and foundational skills.
It is clear that digital change is outpacing the capabilities of our education and training institutions and they need to rise to this challenge.
Our training systems, need to place a stronger emphasis on improving basic and advanced skills in the STEM fields of science, technology, engineering, and mathematics, as well as on management development and innovation. But STEM alone will not deliver without a new emphasis by our schools, universities and Vocational Education and Training bodies on the enterprise skills of creativity, complex problem solving and critical thinking.
Businesses themselves should prepare for the major changes upon us. A first step is identifying the business challenges and objectives and whether digitalisation could transform the organisation. Implementing a digital strategy that includes upskilling the capabilities of the workforce would be next. This would be followed by an examination of the organisational changes needed as digitalisation upends entire business processes.
People will ultimately still make the decisions in technology-rich environments. But leaders need to develop the right management skills for the major changes. Successful managers will be those able to cope with complexity by learning and adapting to changing circumstances, assisting in the upskilling of their existing workforces and taking risks and engaging in restructuring.
Companies will also benefit by forming partnerships with education sectors. Linking with local universities, vocational education and training providers and schools on projects and activities suited to the business will help to shape the skills needed, and inject fresh ideas into the company. With rapidly changing work practices and technologies, exposure by students to workplaces at all stages of education and training will ultimately assist businesses.
The business landscape is littered with the remains of companies that either failed to respond to disruption in their industry or who saw it coming but were too slow to act. As we enter the fourth industrial revolution, no doubt this history will repeat itself for some businesses. However, the move will be positive for those businesses that play their part in developing the capabilities we need for the future.
Innes Willox is chief executive of the Australian Industry Group