CEDA report: more than five million Aussie jobs gone in 10 to 15 years

More than five million jobs — almost 40% of Australian jobs that exist today — have a moderate to high chance of dying out in the next 10 to 15 years due to new technology, a report released yesterday has claimed.

The Committee for Economic Development of Australia (CEDA) said Australia and the world are on the cusp of a very different industrial revolution with new jobs and industries emerging, and it is important that planning and investment takes place now to ensure our economy does not get left behind.

CEDA Chief Executive Professor the Hon. Stephen Martin released CEDA’s major research report for 2015, ‘Australia’s future workforce?’, and said as part of the report NICTA researchers have examined the probability of job losses due to computerisation and automation in Australia and in each local government area across the country.

“This research shows that in some parts of rural and regional Australia in particular, there is a high likelihood of job losses being over 60%,” Martin said.

“The pace of technological advancement in the last 20 years has been unprecedented and that pace is likely to continue for the next 20 years.

“While we have seen automation replace some jobs in areas such as agriculture, mining and manufacturing, other areas where we are likely to see change are, for example, the health sector, which to date has remained largely untouched by technological change.”

Martin said creating a culture of innovation must be driven by the private sector, educational institutions and government. But the government must lead the way with clear and detailed education, innovation and technology policies that are funded adequately.

“Our labour market will be fundamentally reshaped by the scope and breadth of technological change, and if we do not embrace massive economic reform and focus on incentivising innovation, we will simply be left behind in an increasingly competitive global marketplace,” he said.

“Currently, the commitment needed to link education and innovation policy with funding is appalling compared to other countries and Australia’s industry innovation strategy is woefully underfunded compared to global competitors.

“For example, the five Industry Growth Centres announced last year by the federal government should be critical in driving innovation but only $190 million has been allocated over four years.”

Other countries, by comparison, are investing billions.

“The UK Catapult Centres, which they are based on, have been allocated almost $3 billion over the same period,” Martin said.

“The German Fraunhofer Network, the Netherlands’ Top Sectors Strategy and US National Manufacturing Institutes have had even larger allocations.

“If we expect to compete with countries such as these as a smart and innovative economy then we need to get serious about how we invest in driving innovation.”

He said we also need to reconsider how we deal with reskilling workers as particular fields of employment disappear and the CEDA report highlights the policy approach taken by Denmark to reskill mature-age workers.

“The Danish approach is three-pronged — greater flexibility around hiring and firing, generous unemployment benefits and substantial programs to help unemployed people gain new skills,” Martin said.

“Often these programs start before a person is even retrenched.

“In comparison, Australia has the lowest levels of unemployment benefits of the OECD for a single person recently unemployed and often programs to assist with skills training do not start until a person has been unemployed for some time.”

The Danish model is underpinned by the same mutual obligation approach to Australia, but rather than send people off on work-for-the-dole projects, it is training people with the skills their economy needs.

“The Danish policy, while more expensive initially, makes long-term economic sense because it ensures people return to the workforce more quickly and with the skills the economy needs,” Martin said.

“As more job restructuring occurs in the Australian economy, this type of policy is going to be vital. It is likely some tough decisions about the Australian labour market will need to be made in the next decade; we’ve already had a taste of this with the decline of the car manufacturing industry.

“However, if we develop the right policies now, we have the potential to reduce the impact of these challenges and ensure our economy remains robust.”

The CEDA research report can be downloaded from the CEDA website.