IT skills shortage criticized in Australia

SYDNEY – Growth in Australia’s information and telecommunications industries is being hindered by skills shortages in key sectors as well as by a downturn in employment and research & development spending, says an industry group.

The Australian Computer Society (ACS) said report was based on a regular survey of ICT companies in Australia.

ACS president Kumar Parakala said the primary concern identified by the ACS Industry Report was that ICT skills shortages are now negatively impacting ICT industry performance. Parakala said this will have significant economic flow-on effects for Australian business at a time when global industry growth is paramount.

"The report provides a significant overview of the current state of the ICT industry and its impact on other industry sectors," he said.

"Of the 514,000 ICT professionals currently working in Australia, more than 268,000 work directly in the ICT industry, supplying goods and services to every sector of the economy.

"Findings suggest that employment volatility is declining, vacancies are up to record highs and employment growth is slowing." There are three key factors creating significant pressure on the ICT industry performance - a downtrend in telecommunications employment, a reduction in the number of Australian ICT companies in the market, and a continued decline in R&D spending.

The total number of ICT workers in Australia is 514,000 with the total number of employees at 268,000. Revenue generated by the ICT industry totals A$84.3 billion (US$77 billion) while R&D totals A$600 million.

Other findings from the report show the level of female participation in the ICT technical and professional workforce is just under 30 percent of the total workforce. ICT employment growth since 2003 in Western Australia stands at 42 percent, in Queensland it is 31 percent, Victoria 22 percent and NSW is 16 percent compared to only 12 percent in the Northern Territory, nine percent in Tasmania and four percent in South Australia.

Moreover, it is a truly SME-driven industry with over 96 percent of software and computer services firms small to micro-sized. Parakala said some of the report's findings raise concerns for the future of the ICT industry and overall economic prosperity.

"While Western Australia and Queensland continue to grow in ICT employment faster than non-mining states, the pace of growth has begun to slow in WA in the last six months," he said. "ICT underpins so many areas of our national growth and productivity Australia's ICT priorities must be top of mind if Australia is to maintain its globally competitive position.

"This includes encouraging more people to enter or re-enter the ICT workforce, particularly women and older workers. It's important for industry and government to collaborate on creating a sustainable ICT ecosystem that will help manage and grow the ICT workforce."

In addition to developing policies to support the industry, the ACS believes firms should be encouraged to undertake a three to five year rolling skill forecast as part of their annual planning process. Parakala said the government, together with industry, urgently needs to build an ICT Skills Demand Model to help to identify how many ICT workers the industry will need in 10 to 15 years time.

"This is essential to the industry's continued growth and prosperity. The ACS supports the development of a model that can be used to produce rolling forecasts," he said. "In order to make Australian IT companies competitive, we need a greater focus on innovation & ICT R&D - this is what's required to build economic prosperity.

"The ACS believes information knowledge creation or knowledge process outsourcing should be the focus of efforts by government and industry, as well as supporting ICT R&D to create an environment conducive to innovation.

"We require an Australian ICT industry that is a magnet for private investment to support R&D and commercialization of technology through large, multi-disciplinary commercial R&D and product realization centers," Parakala said.

"We have now reached the tipping point and if the industry is not supported by the federal government, Australia will slip further down the line on the global stage." A spokesperson for the Department of Education, Employment and Workplace Relations said steps have already been taken to address Australia's worsening skills shortage including an Industry Skills Council which will identify demand for skills and workforce trends.

Additionally, the spokesperson said many of the issues raised by the ACS including innovation, a strong digital economy and more skilled workforce have all been identified as national priorities by the Rudd government.