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Factors and trends

Overview

This section examines some of the high-level trends and factors which influence and drive the demand for skills.

Drawing on information from the Industry Reference Committee (IRC) 2017 Skills Forecasts, this section identifies which factors are having a greater impact on different industries. The report Future skills and training: A practical resource to help identify future skills and training provides more detail on some of the factors listed and is available on the Australian Industry and Skills Committee website. 

Factors identified as having the greatest impact on industry are:

Economic conditions

Australia continues to experience growth and low unemployment. The top three contributing industries in 2017 in terms of Gross Value Added were:

  • Financial and insurance services
  • Construction
  • Mining.

Gross Value Added (GVA) for all industries had an increase of 2.2 percent from 2016 to 2017.  In 2000, GVA for the top 3 contributing industries was manufacturing at 12.6 percent, financial and insurance services at 8.5 percent and construction at 6.9 percent.  In 2017, GVA for the top 3 contributing industries was financial and insurance services at 9.3 percent, construction at 8.1 percent and mining at 8.0 percent.  In November 2017, the unemployment rate was 5.4 percent overall and 12.3 percent for 15 to 24 year olds.   In November 2017, the underemployment rate was 8.3 percent overall and 17.8 percent for 15 to 24 year olds.

Trends in the labour market

Industry employment level

Employment has grown for the majority of industries between 2000 and 2017. The exceptions that have seen a decline in their workforce over this period are:

  • Agriculture, Forestry and Fishing
  • Manufacturing
  • Information Media and Telecommunications.

Industry and occupation structural change

There is an evident shift in industry structure. The industries with the largest decline between 2000 and 2017 (in terms of share of total employment) were:

  • Manufacturing (5.0 percentage points)
  • Agriculture, Forestry and Fishing (2.3 percentage points).

The industries with the largest increases have been:

  • Health Care and Social Assistance (3.6 percentage points)
  • Professional, Scientific and Technical Services (2.0 percentage points)
  • Construction (1.3 percentage points).

Within these three industries, some of the industry sectors with the largest growth are:

Preschool Education at 314.6 percent, Adult, Community and Other Education at 195.8 percent, Child Care Services at 157.2 percent, Architectural, Engineering and Technical Services at 111.5 percent, Computer System Design and Related Services at 102.9 percent, Allied Health Services at 102.1 percent, Building Installation Services at 80.8 percent, Residential Building Construction at 77.6 percent

The occupational structure of the labour market has changed over the same period as well, with higher-level skills increasingly in more demand. The occupation grouping with the largest growth is Professionals (increasing their share by 4.4 percentage points). The second largest increase is Community and Personal Service Workers (increasing its share by 2.6 percentage points).

Within the Community and Personal Service Workers category, the occupations with the largest increases are:

Nursing Support and Personal Care Workers at 155.7 percent, Child Carers at 147.8 percent, Aged and Disabled Carers at 118.1 percent, Dental Assistants at 97.4 percent

Part-time employment is also growing for the majority of industries. The industries with the largest increases in part-time employment (as a proportion of total employment between 2000 and 2017) were Accommodation and Food Services (9.5 percentage point increase), and Administrative and Support Services (9.2 percentage point increase).

Demographic trends

Australia’s ageing population and workforce is affecting industries differently. In 2017, there were seven industries with around a third of the workforce aged 50 and over. Over half of Agriculture, Forestry and Fishing workers are 50 years or older (51.7%) but only 15.5% of Accommodation and Food Services workers are of that age.

Since 2000, there has been an increase in the proportion of the workforce aged 50 years and over in all industries. The industries which have seen the largest increase in the proportion of the workforce aged 50 and over are:

  • Agriculture, Forestry and Fishing (16.1 percentage points)
  • Public Administration and Safety (16.1 percentage points)
  • Administrative and Support Services (13.2 percentage points)
  • Electricity, Gas, Water and Waste Services (13.1 percentage points)
  • Manufacturing (11.6 percentage points)
  • Transport, Postal and Warehousing (11.0 percentage points).

Changing gender participation also varies across industry and occupation groups. For most industries, there has been little change in the proportion of the female workforce between 2000 and 2017. Industries which have seen the largest growth in the female workforce are Public Administration and Safety (10.0 percentage points) and Rental, Hiring and Real Estate Services (7.3 percentage points).

In regards to occupation groups, Managers and Professionals have seen the strongest increase in the female proportion of the workforce between 2000 and 2017 with 7.5 percentage point and 6.3 percentage point increase respectively. 

Factors influencing the demand for skills

The Miles Morgan report Future skills and training: A practical resource to help industry identify future skills and training identifies a number of factors and trends which are driving and influencing the demand for skills in Australia and internationally. The factors are grouped into five overarching clusters: Society and Culture, Business and Economics, Technology, Resources and Environment, and Policy and Regulatory. Below is a brief overview of these factors, with more detailed information available in the report.

Society and culture

This group of factors relate to changes in society and culture which have implications for the labour market and skills:

Society and culture-related factors which affect the labour market include:

  • Demographic changes, such as population growth and an ageing population and their impact on the workforce and markets
  • Globalisation and its impact on mobility, migration and international markets
  • Changing work and career values and greater emphasis on flexible working arrangements and work/life balance and increase in part time work
  • Attracting and retaining a workforce
  • Suitably skilled workforce and access to suitable training
  • Urbanisation and implications for regional, rural and remote areas
  • Increased participation by women and gender-related disparity
  • Increasing participation by equity groups.

The majority of IRC Skills Forecasts identify at least one society and culture factor which has had an impact on their industry sectors. The following industries identify multiple society and culture factors:​

  • Manufacturing
  • Automotive
  • Utilities
  • Mining, Drilling and Civil Infrastructure
  • Transport and Logistics
  • Corrections and Public Safety
  • Education
  • Community Services
  • Health Services
  • Agriculture, Horticulture and Conservation and Land Management
  • Aquaculture and Wild Catch
  • Forest and Wood Products
  • Food and Pharmaceutical Production (including Meat and Beverages)
  • Culture and Related Industries
  • Printing and Graphic Arts
  • Sport and Recreation
  • Tourism, Travel and Hospitality
  • Government
  • Information and Communications Technology
  • Property Services
  • Electrotechnology

The most prominent society and culture factor is demographic changes. Around 78% of IRC Skills Forecasts report changing demographics as being a potential challenge or opportunity for industry, particularly Australia’s ageing population. Many of these industries cite an ageing workforce as being a potential challenge. However the ageing population is also creating new markets and new opportunities for some industries. 

Other factors which rank highly among IRC Skills Forecasts include:

  • Workforce skill requirements, and challenges associated with accessing suitably skilled workforce and access to suitable training
  • Globalisation and its impact on mobility, migration and international markets
  • Attracting and retaining a workforce
  • Issues facing regional, rural and remote areas, particularly in regards to attracting and retaining skilled employees and accessing suitable education and training.  

Business and economics

This relates to trends in business and markets which influences how companies do business. Factors include:

  • High speed competition and highly competitive markets
  • Start-up thinking (including entrepreneurialism, freelancing and contracting)
  • Emerging or changing markets
  • Skills mismatch, shortages or gaps
  • Workforce vulnerability (including low wages and unstable employment)
  • Network working and producing and supply chain management
  • Changing workplace dynamics
  • Knowledge-based economy
  • Empowered customers and changing customer preferences.

The majority of IRC Skills Forecasts identify business and economics factors as an issue affecting their industry sectors. The following industries identify multiple business and economics factors which impact on their industry:​

  • Manufacturing
  • Construction, Plumbing and Services
  • Electrotechnology
  • Automotive
  • Utilities
  • Mining, Drilling and Civil Infrastructure
  • Transport and Logistics
  • Education
  • Community Services
  • Health Services
  • Wholesale and Retail and Personal Services
  • Agriculture, Horticulture and Conservation and Land Management
  • Racing
  • Pulp and Paper Manufacturing
  • Food and Beverage Production (including Meat and Beverage)
  • Culture and Related Industries
  • Printing and Graphic Arts
  • Tourism, Travel and Hospitality
  • Government
  • Business Services
  • Financial Services
  • Information and Communications Technology
  • Property Services

The most prominent business and economics factor is emerging and changing markets. Around three-quarters of IRC Skills Forecasts report emerging and changing markets are a potential challenge or opportunity for their industry. Some industries cite structural decline as being a potential challenge. However, most industries identify new markets and new opportunities. 

Other business and economics factors which rank highly among IRC Skills Forecasts include:

  • Empowered customers and changing customer preferences which drive new consumer-driven models and markets
  • High speed competition and highly competitive markets
  • Skills mismatch, shortages or gaps, including chronic skills shortages in some occupations and regions, and seasonal peaks and troughs for workers. 

Emerging technology

This addresses the ever-evolving nature of technology and the implications it has for the workforce and skills needs. Key factors include:  

  • Emerging technologies
  • Digitisation and the Internet of Things
  • Artificial Intelligence (AI) and machine learning
  • Automation and Robotics (including drones)
  • Technologically advanced materials and products
  • Augmented Reality (AR) and Virtual Reality (VR)
  • Mobility and connectivity
  • Big data and data analytics.

The majority of IRC Skills Forecasts identify technology factors as an issue affecting their industry sectors. The following industries identify multiple technology factors which impact on their industry:​

  • Manufacturing
  • Construction, Plumbing and Services
  • Electrotechnology
  • Automotive
  • Utilities
  • Mining, Drilling and Civil Infrastructure
  • Transport and Logistics
  • Corrections and Public Safety
  • Education
  • Community Services
  • Health Services
  • Wholesale and Retail and Personal Services
  • Agriculture, Horticulture and Conservation and Land Management
  • Animal Care and Management
  • Aquaculture and Wild Catch
  • Racing
  • Forest and Wood Products
  • Food and Pharmaceutical Production (including Meat and Beverages)
  • Culture and Related Industries
  • Printing and Graphic Arts
  • Sport and Recreation
  • Tourism, Travel and Hospitality
  • Government
  • Business Services
  • Financial Services
  • Information and Communications Technology
  • Property Services.

The most prominent technology factor is emerging technologies. Around 89% of IRC Skills Forecasts report emerging technologies as a potential challenge or opportunity for industry. Some industries cite emerging technologies as being a potential challenge for the workforce due to automation of some roles and challenges associated with upskilling. However, most industries identify emerging technologies as leading to new opportunities and improved productivity efficiencies.   

Other technology factors which rank highly among IRC Skills Forecasts include:

  • Automation and Robotics (including drones)
  • Big data and data analysis
  • Digitisation and the Internet of Things
  • Technologically advanced materials and products (specific to each industry).

Resources and environment

This group of factors covers the issue of climate change, international action on sustainability, as well as access to reliable internet, and the implications of this for business, the workforce and education and training. Factors include:

  • International and domestic sustainability action, driving the demand for more sustainable products and services
  • Climatic weather shifts and the impact of climate change
  • Improving energy efficiency
  • Access to quality internet
  • Financial viability
  • Ethical practices
  • Bioproducts
  • Access to land and water resources
  • Biosecurity.

Around 62% of IRC Skills Forecasts rank resources and environment factors as an issue affecting their industry sectors, including the following industries:

  • Manufacturing
  • Construction, Plumbing and Services
  • Electrotechnology
  • Automotive
  • Utilities
  • Mining, Drilling and Civil Infrastructure
  • Transport and Logistics
  • Corrections and Public Safety
  • Wholesale and Retail and Personal Services
  • Agriculture, Horticulture and Conservation and Land Management
  • Animal Care and Management
  • Aquaculture and Wild Catch
  • Racing
  • Forest and Wood Products
  • Pulp and Paper Manufacturing
  • Food and Pharmaceutical Production (including Meat and Beverages)
  • Culture and Related Industries
  • Sport and Recreation
  • Tourism, Travel and Hospitality
  • Information and Communications Technology
  • Property Services.

The most prominent resources and environment factor is international and domestic sustainability action, which is driving the demand for more sustainable products and services. Around 42% of IRC Skills Forecasts report sustainability actions are a potential challenge or opportunity for industry. Some industries cite sustainability action as being a potential challenge for the industry due to changing customer expectations and changes in approaches to business operations and challenges in meeting skill requirements. However, most industries identify sustainability action as leading to new opportunities and markets. 

Other resources and environment factors which are of importance to industry sectors are:

  • Climatic weather shifts and the impact of climate change
  • Improving energy efficiency
  • Ethical practices, such as ethical treatment of animals and ethically sourcing materials and food
  • Biosecurity issues
  • Access to land and water resources.

Policy and regulatory

This focuses on the policy and regulatory factors which influence the demand for skills, including understanding and adhering to the regulatory environment, the policy environment and its implications for businesses and the workforce, as well as reform in the education and training sector. Factors include:

  • Innovation ahead of regulation
  • Policy environment
  • Appetite for reform
  • High and complex regulatory environment
  • Safety requirements.

Around three quarters of IRC Skills Forecasts rank policy and regulatory factors as an issue affecting their industry sectors. This includes the following industries:​

  • Manufacturing
  • Construction, Plumbing and Services
  • Automotive
  • Utilities
  • Mining, Drilling and Civil Infrastructure
  • Transport and Logistics
  • Corrections and Public Safety
  • Education
  • Community Services
  • Health Services
  • Wholesale and Retail and Personal Services
  • Agriculture, Horticulture and Conservation and Land Management
  • Animal Care and Management
  • Aquaculture and Wild Catch
  • Racing
  • Forest and Wood Products
  • Food and Pharmaceutical Production (including Meat and Beverages)
  • Culture and Related Industries
  • Tourism, Travel and Hospitality
  • Government
  • Financial Services
  • Property Services.

The most prominent factor for industry is 'high and complex regulatory environment'. Around half of IRC Skills Forecasts report that a high and complex regulatory environment is a potential challenge for industry. For most industries, a high and complex regulatory environment is part of the operational environment either specific to the industry or applied more broadly, and can include; licensed occupations, industry standards, legislation to manage and protect resources, workplace health and safety legislation, and legislation to protect consumers. Many industry sectors report the need for business and compliance skills to enable the workforce to negotiate the regulatory environment.

Other factors which are of importance to industry sectors are:

  • unstable business environments and uncertainly around funding arrangements.
  • where industry would like to see reform in their industry, or have recently been impacted by reform.

Method and sources

Methodology

The factors and trends framework has largely been based on the factors outlined in the Miles Morgan report Future skills and training: A practical resource to help identify future skills and training, which is available on the AISC website. The report outlines a number of factors which are influencing the demand for skills in the following broad categories: society and culture, business and economics, technology, resources and the environment, policy and regulatory.

A systematic review of the Skills Forecasts from 2017 has been undertaken to identify which factors are most prevalent for the IRCs. 

Employment data has also been provided to show how labour market trends have also been shaping the workforce between 2000 and 2017.

Sources

Australian Bureau of Statistics 2017, Gross Value Added (GVA) by Industry, 5204.0 – Table 5, viewed 3 March 2018 <http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/5204.02016-17?OpenDocument>

  • Top three contributing industries, 2000 and 2017

Australian Bureau of Statistics 2017, Underutilised persons by Age and Sex - Trend, Seasonally adjusted and Original, 6202.0 – Table 22, viewed 2 March 2018 <http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6202.0Jan%202018?OpenDocument>

  • Unemployment November 2017 (all and 15-24 year olds)
  • Underemployment November 2017 (all and 15-24 year olds)

Australian Bureau of Statistics 2017, Employed persons by Industry group of main job (ANZSIC), sex, state and territory, November 1984 onwards, 6291.0.55.003 - EQ06, viewed 1 September 2017, <http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6291.0.55.003May%202017?OpenDocument>

  • Employed total by ANZSIC 1 digit Industry, 2000 to 2017, May Quarter
  • Employed total, percentage change by ANZSIC 1 digit Industry, between 2000 and 2017, May Quarter
  • Employment status, percentage change by ANZSIC 1 digit industry, between 2000 and 2017, May Quarter
  • Employed total, proportion of females in workforce, percentage change by ANZSIC 1 digit Industry, between 2000 and 2017, May Quarter

Australian Bureau of Statistics 2017, Employed persons by occupation group of main job (ANZSCO), sex, state and territory, November 1984 onwards, 6291.0.55.003 - EQ08, viewed 1 September 2017 <http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6291.0.55.003May%202017?OpenDocument>

  • ANZSCO 1 digit occupation, percentage change between 2000 and 2017, May Quarter
  • Employed total, proportion of females in workforce, percentage change by ANZSCO 1 digit Industry, between 2000 and 2017, May Quarter

Australian Bureau of Statistics 2017, Employed persons by Age and Industry division of main job (ANZSIC), November 1984 onwards, 6291.0.55.003 – EQ12, viewed 1 September 2017 <http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6291.0.55.003May%202017?OpenDocument>  

  • Employed total, proportion of workforce aged 49 and under and 50 and over by ANZSIC 1 digit level, 2017 May Quarter
  • Employed total, proportion of the workforce aged 50 and over by ANZIC 1 digit level, percentage change difference between 2000 and 2017, May Quarter
Updated: 01 Jun 2018
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