Explore Economics Videos

Transcript

Alex Heath, Head, Economic Analysis Department

The Australian workplace is changing. Many of the jobs that are around today didn't exist a decade ago, and the same will be true in decades to come.

In such a rapidly changing environment, how can workers make sure they have the right skills to succeed? Before we answer that question, let's have a look at some of the factors driving changes in the workplace today.

Factors like demographic change tend to work slowly over decades, rather than years. Australia's population is getting older, and because of that, we're seeing increased demand for nursing and aged care.

Factors like technological change can be quite fast and be quite disruptive, and not only to individual jobs, but to entire industries. Robotics enables production lines to be automated, while spreadsheets and other sorts of IT allow office processes to be automated.

Some jobs will be replaced, but technology can also create increased demand for new skills. There's now demand for occupations like IT security, data analytics, that just didn't exist 20 years ago.

So, to help think about what skills might be demanded in the future, it's useful to look at what people are doing in the economy today, and how that's changed over time. Let's start with routine jobs.

As the name suggests, routine jobs are more repetitive. A simple example of this is production line work. Data processing and office administration are also considered to be routine jobs. On the other hand, non-routine jobs require more human interaction and judgement because people in these jobs face different situations every day.

Most jobs in the health care and social assistance sector are non-routine, and there has been strong employment growth in this sector over the past 15 years or so. Most professional jobs, such as those in architecture or engineering, as well as jobs in education are also in non-routine categories.

It's also useful to understand whether jobs are manual or cognitive. Manual occupations tend to rely on physical labour and are often in industries like construction, manufacturing or mining.

Workers in cognitive jobs are likely to have post-school qualifications and use their expertise and knowledge to get the job done. So, think of lawyers, doctors and economists. So, now we know a little bit more about the different types of jobs that exist today, how has their importance changed over time?

When you look at the data, over the past 10 years there's been relatively little growth in the number of routine jobs compared with non-routine jobs. This is probably not surprising because these are the jobs that are going to be most easily automated.

Interestingly, we've also seen relatively little growth in cognitive jobs that are routine in nature. Jobs like data entry and bookkeeping are being replaced with new technical solutions, or another possibility is that they're being moved offshore where labour is cheaper.

But in contrast, we've seen quite strong growth in non-routine jobs. And it's here that we see the most potential for the future. They typically require university qualifications and they require people to have a greater range of skills that are harder to automate, such as social intelligence and creativity.

So, while we don't know what roles will be demanded in the future, the data allow us to predict some of the skills that are going to be quite highly valued. Some things like learning how to learn, problem solving skills, and having core skills in maths and sciences are going to help employees adapt to future changes in technology.

And don't forget, there's going to be a whole range of new jobs that we don't even have a title for yet. As an economist at the Reserve Bank, I rely on a range of skills every day. Some of these skills come from what I learned at university. Other skills I've learned on the job.

In particular, I use detailed analysis of complex, and often ambiguous, information to help form a better understanding of how the economy works and what the workforce looks like. I'm constantly asking questions and trying to solve puzzles presented by the data so that I can provide better advice.

I also use social skills to communicate my views and contribute to better policy. These skills are also core to my role as the head of a department with a staff of almost 80 people. These types of skills are not easily replicated by computers or replaced by offshore resources, and they're going to be helpful for facing the changes that lie ahead.

At the Reserve Bank of Australia, we're committed to using research to shape better policy. And a part of this is helping people understand the changing nature of the economy and the changing nature of the Australian workforce so they can equip themselves with the right skills.

Having a workforce that has the right skills should underpin productivity growth and therefore, the economic prosperity of the Australian people into the future.