Facing up to our demographic destiny

Australia has to face up to its demographic destiny.

The age profile of the world is changing. While children and the middle aged currently dominate the percentage of population in most countries across the world, this will dramatically change over the next twenty years.  The 50+ group will catch up with the kids by 2020 and the proportion of 17-24 year olds is in decline, as is their absolute number within the world’s population.

So while we continue to talk about a skills shortage we are actually talking about a population issue and a distribution of labour across the nation and the world.

The recent release of a survey by the Australian Industry Group highlights the impact of the skills shortages on Australian businesses. In the survey, CEOs who were interviewed talked of how it is increasingly difficult to attract and retain the skilled workers required to survive and prosper in today’s economic climate.

Furthermore, skills shortages are starting to restrict the ability of Australian firms to innovate and improve their business models and functions. And we know that technology-led innovation delivers almost all productivity gains in industries – for example over the last decade 85 per cent of all productivity gains in manufacturing and 78 per cent in the services sector came from the application of technology solutions.

I’ve just joined Julia Ross after spending two years leading the Australian Information Industry Association – the lobby group for the computer industry in Australia.  From experience, I know that every year brings new challenges for the ICT industry and those employed in it – and 2008 is no exception.

Global economies are showing signs of weakness giving rise to speculation about the sustainability of the Australian economy. The depth of the sub-prime finance within Australian financial institutions is not fully disclosed and the impact therefore is not understood. The threat of recession in the US even after injections of money through interest rate decreases, tax cuts and superannuation have proven to be inadequate to ally fears.  China remains a critical trade partner to ensuring that Australia’s growth will slow but not decline dramatically. 

Consumer confidence is weakening. The Westpac Melbourne Institute Index of Consumer Sentiment fell below 100 in February, which indicates that pessimists now outnumber optimists. As the famous song goes “don’t wish too hard for what you want ‘cos you might get it.”

And if obesity is the result of an affluent lifestyle, the skills shortage is the outcome of a robust economy and high client demand. The ICT industry in Australia, for example, is a cyclical one with peaks and troughs that largely align to the demand for client projects – particularly large government projects and to economic cycles.

Enrollments in tertiary ICT courses are half of what they were in 2001. More than that there is continuing discontent about the workplace capabilities of graduates and a disconnect between industry needs and the perception of ICT as a career among young Australians.

The industry still suffers from the view that it is nerdy and full of spotty faced youths reinforced by those quirky folk on the BBC show called the IT Group, or Douglas Copeland’s book jPod, or evidence from my daughter who is doing Commerce and IT at ANU tells me is largely true.  But is it?  You tell me.

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