Innovation and the future of jobs

Graeme Philipson

StartupAUS has released a discussion paper on the way new technologies and innovation are changing the nature of work and the workforce.

The paper is called ‘Economy in Transition – Startups, innovation and a workforce for the future’ and is intended to look at ways Australia should adapt to the changes and optimise its opportunities.

“Innovation and startups need to remain a real priority for both sides of politics,” StartupAUS CEO Alex McCauley told “If the shift to the new economy is not managed well, we’ll be left behind.”

We asked him about criticism from some quarters that the Coalition in the recent election had focussed too much on innovation, and not enough on the concerns of so-called ordinary Australians.

“I don’t think it was a key election issue,” he said, “but it is certainly the case that we can all do a better job at explaining why innovation is important to the future of all Australians. That is exactly what this new report aims to do.”

Most coverage of the report has focused on the 4.6 million jobs that it says are under threat over the next decade from new technology, but Mr McCauley would rather concentrate on the positives.

“There are extensive economic benefits from building innovation hubs, which have powerful multiplier effects. Each startup job creates as many as five more jobs in the economy. If we get it right, we’ll be able to capitalise on it. This is not a niche area – it’s about what we need to do to help our whole economy manage its inevitable transition.”

The paper was produced in partnership with Sydney startups Expert360 and CodeCamp and LinkedIn, which is the process of being acquired by Microsoft.

It says that few jobs will be protected from technological advances such as robotics and artificial intelligence, but that tech companies – and startups in particular – will generate ‘forward-looking’ jobs based on emerging technologies.

LinkedIn data included in the report suggests that 16 of the 20 most in-demand skills in Australia currently are technology-related, and workers with a mix of entrepreneurial, STEM, creative, and social skills will be in increasingly high demand to support the core of Australia’s burgeoning innovation ecosystem.

The paper recommends specialised immigration as a crucial part of injecting critical skills into Australia’s workforce.

“Thriving innovation hubs in the nation’s major cities can help attract this talent from around the world,” said Mr McCauley.

“As Australia’s tech startup ecosystem develops, we must be open to importing talent from overseas, and at the same time accept that skilled Australians will move offshore. This is a natural part of the modern employment landscape for highly skilled workers.”

The paper’s author, Colin Pohl, said: “In the US, approximately 34 per cent of the workforce is already made up of independent workers. We expect this to increase significantly, and for a similar trend to be reflected in Australia.

“Many corporate jobs require specialised skills that are not required on a permanent basis, and infrastructure support for freelancers will facilitate an increasing number of workers operating across a portfolio of briefs based on their specialised talent.

“The impact of rapidly developing technology, disruptive new business models, and increasing global connectedness will fundamentally alter the employment opportunities available globally, the skills in greatest demand, and the structure of employment arrangements.”

The report asks two central questions:

  • How is workforce demand being changed by the rise of the digital economy and improvements in technology?
  • How can Australia develop a workforce that absorbs the challenges and thrives in a changing economy?

It is divided into two parts. The first looks at the themes impacting employment, while the second looks at how Australia can best position itself for the future.

It recommends an acceleration of the establishment of innovation hubs and attempts to demonstrate how a healthy innovation environment that creates many new startups can deliver a sustainable growth in employment. It also looks at what it says are the crucial skills Australia needs to develop, specifically entrepreneurship, digital literacy, and other science and technology skills.

“History shows that technological developments have always led to new employment opportunities in novel areas,” said Mr Phohl.

“For example, average real incomes more than tripled between 1875 and 1975 due to these substitution effects, despite the ongoing impact of industrialisation and a dramatic reduction in agricultural jobs.”

But he says things are different now. “For the first time it is not only manual labour that will be displaced, but intellectual labour, and this presents a more complex challenge. This is driven primarily by exponential improvements in computer power and advances in technology such as artificial intelligence, robotics, big data, cloud computing and the internet of things. These technologies are now being applied on an industrial scale.

“It is difficult to overstate the importance of taking an active role in this transition. Some 47 per cent of jobs in the US are likely to become obsolete in the next 10-15 years, according to leading research from Oxford University. In Australia, work based on this methodology indicates the figure could be around 40 per cent.

“The same research also suggests that jobs that require high levels of entrepreneurial, technological, creative or social skills will be far more resilient to technological change.”

The report can be found right here.

Do you know more? Contact James Riley via Email.

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