Skills shortages threatens Australia's ICT growth

The report indicates that growth of the industry is being hampered by key skills shortages, falling telecommunications employment and a downtrend in investment in research and development (R&D).

Conducted for the ACS by industry think-tank, the Centre for Innovative Industries Economic Research, the ACS ICT Industry Report provides an overview of the problems facing the Australian ICT industry as of December 2007.

One of the key concerns identified by the report is the negative impact that skills shortages in key industry sectors are having on ICT industry performance. While the ICT industry, which is largely driven by SMEs, has seen a significant growth in total revenue to $84.3 billion, a decrease in skilled workers in key industry sectors remains a real threat to Australia’s economic prosperity.

The report highlights several worrying trends. While the volatility of employment is declining, job vacancies are at record highs and employment growth is gradually slowing. With the national economy dependent on the labour, products and services of ICT, indications of looming trouble need to be taken seriously.

Kumar Parakala, president of the ACS, used the report to call for greater awareness of the importance of the ICT industry and to warn of possible flow-on effects for Australia’s economy if certain trends were not reversed. “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,” he said.

According to Mr Parakala, a gradual slowing of ICT employment in several Australian states, coupled with a long-term sustained decline in R&D investment, are warning signs that need attention. He believes more cooperation between industry and government is needed to nurture Australia’s ICT industry.

“It’s important for industry and Government to collaborate on creating a sustainable ICT ecosystem that will help manage and grow the ICT workforce,” he said.

The report states that a lack of investment in R&D and information knowledge creation is also holding Australia’s ICT industry back. Mr Parakala believes fostering an atmosphere of technical innovation is crucial to attracting private investment.

“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,” he said.

The report proposes several solutions, including actively encouraging more people to enter or re-enter the ICT workforce, particularly mature aged workers, and the integration of ICT subjects into tertiary study. The creation of flexible industry paradigms that can react to shifts in employment and implementation of skills forecasting programs that plan ahead for future trends are also suggested.