With economic growth rates slowing to 18 year lows the federal government has pledged to overhaul its skilled migration system beginning with a review of the eligible occupation lists. Any changes won’t take effect until March 2020, and the focus will be on regional areas.

The tech sector meanwhile is claiming a $207 billion a year opportunity is going begging because of a lack of skills and under investment in the local ICT industry. 

Industry groups say a long term sustainable approach to skills development and investment is needed to drag the local sector back to a globally respectable level and doing so would add billions to the economy.

Leaders in the industry have criticised the government’s migration approach, saying it ignores the local skills opportunity.

Economic opportunity

A report commissioned by the Digital Industry Group Inc (DIGI), with founding members including Google, Facebook and Twitter, found Australia’s ICT sector is around half the size of global peers as a proportion of GDP, and is ranked below all OECD countries except Mexico.

According to the research, conducted by AlphaBeta, Australia currently ranks in the bottom half of OECD countries for innovation and research and development.

At this level the tech sector is Australia’s sixth largest industry and is still employing 580,000 people including 66,000 in regional Australia, and contributing $122 billion to the economy each year, according to the report. 

But the DIGI report argues the sector is not meeting its potential and bringing Australia in line with global leaders would mean the sector’s economic contribution would rise to $207 billion by 2030. 

Skills demand

Fellow industry group the Australian Computer Society (ACS) also claims technology policies could drive economic growth but currently skills demand far outweighs supply. The ACS says a further 100,000 technology sector workers will be needed by 2024.

And while university graduation rates for technology degrees have risen slightly, they are being offset by drops in the vocational sector, ACS president Yohan Ramasundara said.

“For Australia to be a competitive player in the world economy, our policymakers, businesses, workers and communities need to work better together to address the challenges of technology-related skills, investment and collaboration,” Ramasundara said.

A new ACS report, Australia’s Digital Pulse, prepared by Deloitte Access Economics, claims the benefit from reskilling workers in other professional industries to meet employer demand for technology skills by 2024 could potentially be more than $11,000 per employee per year.

Government approach

Determined not to risk its forecast surplus the government appears to see migration rather than direct investment as a potential solution to its economic struggles. In addition to the latest review of the skilled migration system, the government has already extended its tech startup visa program, despite slow uptake.

“The pace of change in the industry means the technology skills gap won’t start closing any time soon, but in fact broaden with the prospect that we need another 200,000 tech workers hired within the next five years,” said Jason Baden, Regional Vice President, F5 Networks A/NZ.

“While the aim of a skilled-migration program can ensure employers have access to workers to fill critical skills shortages, there’s a significant opportunity being missed for a longer-term strategy to build the skills of a local, capable and adaptable group of talent, especially in the developer space. It’s crucial for organisations to learn how to best utilise their existing technology talent, especially as our economy continues to thrive in the application capital era.”

Baden says the uptake of skilled visas for technology roles shows demand from industry is there but local talent needs to be addressed as well for longer term economic benefits.

Likewise, Gary Denman, Vice President, ANZ at McAfee says Australia needs more than skilled migration.

“Skilled migration is certainly a solution to explore, but definitely not the only option nor should it be solely relied upon to help fill the tech and IT skills gap … To truly respond to the high-priority needs of key employment sectors, such as technology and cybersecurity, a long-term, sustainable and multi-layered approach must be considered over temporary solutions.”

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