More than five million jobs, or the equivalent of almost 40 per cent of Australia’s current workforce, are likely to will disappear over the next decade, new research claims.

But millions more jobs will open up as the trend toward outsourcing domestic duties continues.

In the ‘Australia’s future workforce?’ report, released late last month by the Committee for Economic Development Australia (CEDA), Chief Executive Professor the Hon. Stephen Martin said that in some parts of rural and regional Australia in particular there is a high likelihood of job losses being over 60 per cent.

Professor Martin said there will be new jobs and industries that emerge but if Australia is not planning and investing in the right areas we will get left behind.

“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,” he said.

“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,” he said.

“Creating a culture of innovation must be driven by the private sector, educational institutions and government. However, 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.

“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,” Professor Martin said.

However, business analysts and IBISWorld chairman Phil Ruthven, also a contributor to the report, said that already an estimated 2.5 million positions had been created as a result of domestic outsourcing.

He said domestic outsourcing was on track to generate $325 milion in revenues this year.

“Only around one-third of these activities have been outsourced by the 9.3 million households in Australia thus far, so there are millions of jobs still to come in these industries created to provide these services,” Mr Ruthven said.

Services that are increasingly outsourced include home, garden and car maintenance, child minding, personal grooming, meal preparation and pet care; but also incorporate healthcare, such as home nursing support for the aged and disabled and financial and investment advice.

The CEDA report – its major research work for 2015 – focuses on what jobs and skills we need to develop to ensure our economy continues to grow and diversify.

It examines: how, if Australia is to maintain a robust economy that is internationally competitive, we must plan now for the changes, challenges and opportunities we face in developing the right jobs and skills for future generations.

The report looks specifically at: how the next wave of the industrial revolution will fundamentally reshape business activity; the high probability that 40 per cent of Australia’s workforce, more than five million people, could be replaced by automation within the next 10 to 20 years; changes that will occur in the five key sectors identified in the Federal Government’s innovation plan; jobs of the future and exporting and outsourcing opportunities; how businesses operating on the technological frontier are adapting; what digital disruption means to existing business practices; and, what policy levers are available to maximise opportunities.

The report says the five Industry Growth Centres – advanced manufacturing; food and agribusiness; medical technologies and pharmaceuticals; mining equipment, technology and services; and oil, gas and energy resources – announced last year by the Federal Government should be critical in driving innovation but only $190 million has been allocated over four years.

In comparison, the UK Catapult Centres, which they are based on, have been allocated almost $3 billion over the same period, it says.

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,” Professor Martin said.

“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,” Professor Martin said.

Laurie Nowell
AMES Senior Journalist