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Building Australian ICT Skills: Report of The ICT Skills Foresighting Working Group
Building Australian ICT Skills: Report of The ICT Skills Foresighting Working Group
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This report has been produced by the Australian Department of Communications, Information Technology and the Arts.
‘…in order to realise the predicted productivity benefits it will be necessary to support
an appropriate level of investment in skill formation and in ICT related R&D…
The introduction of new ICT technologies involves an extensive learning process that
generates significant knowledge and innovation...’
Forecasting Productivity Growth 2004 to 2024, DCITA, 2006
Contents
Executive summary........................................................................................................................................................... 1
Background. .......................................................................................................................................................................11
1.1 Building ICT Skills as a Strategic Priority............................................................................................................13
Conclusion...........................................................................................................................................................................53
Appendices..........................................................................................................................................................................57
Appendix A. ........................................................................................................................................................................59
Appendix B.........................................................................................................................................................................60
Appendix C. ........................................................................................................................................................................62
Appendix D.........................................................................................................................................................................73
Overview of ICT Skills Supply in the Higher and Vocational Education Sector. ..............................................73
Endnotes...............................................................................................................................................................................79
Executive summary
Executive summary
• Targeted and decisive action is required to enhance Australia’s level of information communication
technology (ICT) skills and capability in order to maintain competitiveness and maximise the
potential of ICT‑generated productivity growth across all sectors of the economy.
• Research by the Department of Communications, Information Technology and the Arts and the
Productivity Commission has demonstrated that ICT has played a major role in Australia’s
productivity growth in recent years, highlighting its potential to support further sustained growth.
• Australia must ensure that these productivity gains are secured and built upon by increasing ICT
labour force participation levels and building the ICT skills base. A highly skilled ICT workforce is
the key to business productivity improvement through innovative use of ICT. This in turn provides
businesses with the capability to compete successfully for export opportunities.
• The ICT Skills Foresighting Working Group, chaired by Keith Besgrove, Chief General Manager,
Information Economy Division of DCITA, has analysed prevailing trends and identified a number of
major inhibitors which threaten Australia’s future ICT skills development, productivity gains and
competitiveness. These are:
– inadequate coverage and access to quality data on demand for skilled ICT occupations;
– poorly defined systems of classifying occupational skills leads to gaps and inconsistencies in
available data series;
– apparent declines in industry investment in workforce retraining and up‑skilling;
– flow on effects within the ICT industry of intergenerational social and demographic factors,
such as the ageing workforce, changing workplace attitudes and generational patterns of work;
– outmoded and negative perceptions of ICT occupations and careers due to a poor
understanding in schools and across the community of the diversity of ICT occupations and
opportunities;
– evidence of a tightening ICT labour market and the emergence of recruitment difficulties for
some ICT skills;
– falling entry level job numbers for new ICT graduates and a marked decline in ICT course
enrolments in the university and VET sectors all suggest a declining pool of local ICT workers
in the medium to longer‑term;
– the variable nature of ICT, over time and across industries, that requires ICT professionals to
regularly redefine and reassess their roles, functions and skill requirements; and
– lack of multi‑jurisdictional cooperation in regard to the issues outlined above.
Unless these issues are adequately addressed they will lead to a severe constriction in the supply of
skilled ICT workers and increase the risk of sustained skills shortages.
The recommendations in this report suggest key areas to be addressed by government, industry, and
education and training providers. Working together to improve the way ICT is represented to parents and
young people, to encourage higher levels of ICT workforce participation and to improve understanding
of the nature of ICT‑related work throughout the economy.
Recommendation 1
The Working Group recommends the formation of an industry leadership group to develop and facilitate
improved ICT information and participation in ICT occupations and careers.
Recommendation 2
The Working Group recommends that the proposed industry leadership group take on improved market
intelligence as one of its main activities and work with government to:
• assist industry to implement a national ICT nomenclature and job description framework consistent
with the new Australian and New Zealand Standard Classification of Occupations (ANZSCO)
occupational classification; and
• adapt and implement policies being established overseas to improve information on skills in
demand and thereby assist government policy development.
Recommendation 3
The Working Group recommends that the Australian Government fund the establishment of an
open‑access National ICT Skills Tracking and Monitoring System based on the Multimedia Victoria/
ITCRA model. Any information collected should be presented in a manner consistent with
recommendation four.
Recommendation 4
The Working Group recommends that the Australian Government work with key stakeholders to improve
access to quality data and analysis on ICT skills and jobs by aggregating and maintaining weblinks and
data on the ICT skills market. This would include analysis of ICT labour market trends and projections
as well as information on career structure on an upgraded Skills Australia website.
Recommendation 5
The Working Group recommends that the Australian Government, in cooperation with industry
stakeholders, fund additional research into staff retention, retraining and up‑skilling issues and
practices. This could include:
• ACS and AIIA undertaking regular review of investment in and attitudes towards staff retention,
retraining and up‑skilling as part of their regular surveys and consultations with members;
• CompTIA Australia, possibly through the new IT Pro Australia website, undertaking a survey into
investment in and attitudes towards vendor training; and
• DEWR including questions in its ICT skills shortage surveys on employer investment in and
attitudes to staff retention, retraining and up‑skilling.
The Working Group concluded that there is an urgent need for action to address negative perceptions of
ICT careers in the community which lead many young people and those who influence their career
choices (such as parents, teachers, career advisers) to underestimate the opportunities available in ICT
and thus to turn away from considering a career in ICT.
Recommendation 6
The Working Group recommends that the Government work with industry, the education and training
sector and State/Territory governments to re‑focus the way ICT is presented by:
• jointly funding, developing and delivering a National ICT Awareness Campaign consisting of a
national communications campaign addressing negative perceptions of ICT and highlighting the
opportunities and attractiveness of ICT careers;
• enhancing ICT careers promotion and outreach efforts to schools by leveraging the new Career
Advice Australia (CAA). In particular this would include:
– forming strong links with the network of National Industry Career Specialists (NICS) and
Regional Industry Career Advisers (RICAs);
– providing them with information and advice on the modern ICT workplace, jobs and careers
and ICT skills in demand and in shortage; and
• promotion and marketing of the ICT module of the Skills Australia website as part of the above.
Recommendation 7
The Working Group recommends that action be taken to review and enhance the teaching of ICT in
schools. The working group suggests that:
• government fund detailed research on school ICT teachers to assess the characteristics (e.g.
gender, age), qualifications and challenges of ICT secondary and high school teachers; and
• ICT industry bodies and leading ICT vendors work with education agencies and professional bodies
to assist and support school ICT teachers and teaching staff in universities and TAFEs.
1
Background
1. Background
1.1 Building ICT Skills as a Strategic Priority
Building and maintaining a sustainable and world‑class ICT workforce and ICT skills base is necessary
to meet the current and future needs of the economy and ensure that Australia continues to achieve
strong productivity, economic and social benefits from ICT.
As part of its fourth term commitment the Australian Government recognised the need to support future
economic growth by addressing Australia’s growing demand for skilled labour and the challenges of
skills shortages and mismatches.
Research by the Productivity Commission and the other government bodies predicts future declines in
labour force participation as the Australian population ages. Increasing labour force participation
through ongoing skills development for young and prime age workers, and ensuring older workers
maintain their skills and employability are a major priority.
In its 2004 election policy statement, Information Technology: Connecting an Innovative Australia, the
Australian Government highlighted the reskilling of ICT workers as an important issue. Furthermore,
Online and Communication Council Ministers agreed at their August 2005 meeting to collaborate on a
more coordinated approach to Australia’s ICT capability, particularly ICT skills, and to improve the
quality and range of key data.
These commitments recognise that Australia faces an ongoing challenge to ensure that the available
ICT workforce is in line with the changing needs of the ICT industry as well as industries across the
Australian economy.
The Working Group focused on ICT skills development directly related to the ICT industry as well as the
ICT skills needed in other industries in the economy. However, the Group did not concern itself with
broader basic ICT skill levels required in business, government and by people in the Australian
community. In addition, issues such as off‑shoring and skilled migration were not given detailed
attention as they were areas which fell outside of the Working Group’s terms of reference.
The members of the Working Group as well as its terms of reference are provided at Attachment A.
2
The Key Strategic Role of ICT in Australia’s Economy
www.dcita.gov.au/ie/publications/2004/march/productivity_growth_in_australian_manufacturing
Achieving Value from ICT: Key Management Strategies, DCITA 2005 www.dcita.gov.au/__data/assets/pdf_file/25466/Achieving_
Value_from_ICT_‑_Key_Management_Strategies.pdf
Enterprise technologies that businesses are investing in are those that run applications internally and
manage linkages with other businesses, such as e‑commerce and supply‑chain systems (e.g. Enterprise
Resource Planning).
Developments and improvements in core ICT technologies such as processor speeds, miniaturisation
and bandwidth are fuelling rapid changes in the capabilities of the communications platforms and the
services they provide. For example, digitisation is blurring the boundaries between communications
infrastructure and services such as television and telephony. Devices which attach to these platforms,
such as 3G mobiles and games platforms, are acquiring functionality which cuts across traditional
industry distinctions.
ICT is facilitating change in business models and allowing new business models to emerge which have
implications for skills demand. For example, the customisation of software is reportedly declining in
favour of proven off‑the‑shelf business processes.
Table 1
Industry ICT Employment for Industry Sector ICT Capital ICT R&D Share of
Aug 2005 Expenditure Share Industry Sector
of Industry Sector R&D Expenditure
Expenditure 2002–03 (%)
2003–04 (%)
Number employed % share
Mining 4 250 1.3 3.9 0.2
Agriculture, forestry and fishing 540 0.16 7.7 *
Transport and storage 7 650 2.3 15.8 31
Manufacturing 22 390 6.7 16.2 16
Construction 12 880 3.9 16.3 16
Retail Trade 14 920 4.5 21.6 33
Health and community services 6 420 2.0 25.5 np
Wholesale trade 13 960 4.2 26.1 41
Accommodation, cafes and
380 0.1 26.6 np
restaurants
Property and business services 124 030 37.2 33.6 63
Personal and other services 2 720 0.8 35.0 np
Government administration and
25 620 7.7 42.0 52
defence
Education 16 300 4.5 43.7 83
Cultural and recreational services 6 660 2.0 44.4 np
Electricity, gas and water supply 9 460 2.8 68.4 39
Communication services 42 580 12.8 89.1 42
Finance and insurance 22 810 6.8 90.1 77
All industries 333 570 26.7
.
Source ABS collections.
Notes *: Data not collected np: Data not published
3
Major ICT labour trends and issues
Figure 1 seeks to illustrate the multiple career pathways and influences on skills supply for the
ICT workforce.
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Figure 2: Long‑term employment growth for ICT Professionals*, compared with Professionals and All Occupations:
1986 to 2005
450
400 Professionals
ICT Professionals
All Occupations
350
300
250
200
150
100
50
Aug-86 Aug-88 Aug-90 Aug-92 Aug-94 Aug-96 Aug-98 Aug-00 Aug-02 Aug-04
*Source: ABS Labour Force Survey‑ IT Managers and Computing Professionals (DEWR trend data)
225
200
125
100
75
25
Information Technology Managers
0
Feb-96 Feb-97 Feb-98 Feb-99 Feb-00 Feb-01 Feb-02 Feb-03 Feb-04 Feb-05 Feb-06
In the lead up to 2000 (Y2K) ICT employment was driven by the pressure to upgrade computer
software combined with strong growth in ICT investment by communication service and the finance and
insurance industries. Also in 2001 the world‑wide ICT industry suffered a sharp contraction in demand
in many markets and this led to a substantial restructure of large international firms such as Nokia,
Motorola and Ericsson.
Australia felt some of the repercussions of this development. Following a strong period of growth
between 1994 and 2003, the slowing of demand for ICT products and services led to a levelling‑out
and then fall in growth of professional ICT in February 2005. The strong rise in the past year has taken
employment of ICT professional to a new Australian peak with 206 300 ICT professionals employed in
February 2006.
There are many and varied reasons for skill shortages in ICT. In particular the demands for specific
skills related to specific technologies can happen with both new and outdated technologies. A sudden
lack of employees with skills in new technologies can outpace the supply if enterprises and
governments suddenly adopt new technologies and their applications. Equally, businesses using older
ICT technologies can sometime find the recruitment of practitioners difficult because the needed skill
sets are becoming rare.
Several technologies are often employed to develop a solution, and increasingly they are being
combined to inject innovation into products and services provided by older industries and other fields of
research. Many industries and areas of research are becoming increasingly dependent on the advances
in ICT to support their leading edge research and applications. For example, the convergence between
nanotechnology, biotechnology, information technology and cogitative science is widely acknowledged
as an important area of research which is expected to yield significant innovation.
Each technology has a pool of skills related to it, ranging from electronic hardware to software and
systems know‑how. There are well over a hundred recognised and evolving ICT skills currently in
demand in the Australian labour market. These skills will continue to change as business, government
and consumers find new ways to improve productivity and make product and service innovations.
Furthermore, demand for ICT skills changes as ICT tools and enhancements change business models
and firms grow and move up the value‑chain. This stimulates demand for different skills and skill sets.
These systemic changes in business can create ‘skill deficiencies’ or ‘skill gaps’. A mismatch of skills
demand and supply can result in there being both ICT unemployment and skills shortages (structural
unemployment). Outsourcing and off‑shoring, the continuous growth of ICT products and services, and
the diffusion of these new technologies to other industry sectors contribute to these dynamic changes.
The forecasting of potential skill shortages is particularly difficult because of the lack of fine detail in
the data on ICT in the labour market. The DEWR annual Australia‑wide ICT skills shortage survey is as
comprehensive as possible in analysing ICT skills in demand. In undertaking the survey in 2005 DEWR
contacted 90 recruitment agencies and 124 employers. Any improvements in the quality of data
obtained from these recruitment agencies and employers will assist in improving the quality of the
survey and its overall findings.
4
Role of Education in ICT skills supply
www.mmv.vic.gov.au/year12research
The supply and development of ICT skills within the education sector is influenced by a multitude of
factors, the principle being:
• the capacity and role of formal education, training institutions (schools, universities and VET) and
vendor training in skills development;
• the ability to attract new entrants into ICT education/training and into ICT careers;
• ICT course enrolments in universities have a lagged impact in four years time when currently
enrolled students graduate;
• graduate employment which is the first step to building experienced practitioners; and
• low demand for graduates can discourage future course enrolment.
The following sections of this report describe these major sources of ICT skills supply and further
explore some of these issues and concepts.
adapting to ICT within the curriculum. In addition the submission stated that there was a need for the
provision of financial and infrastructure support from government and industry to broaden the reach of
existing professional learning opportunities available to teachers.
10 www.tafensw.edu.au/tafeunicredit/
Outcomes from students studying ICT as part of the VET in Schools program provide mixed results.
Analysis of data obtained from DEST (May 2004 survey data) on student participation in and outcomes
from the VET in Schools program found that:
• Of all students participating in structured workplace learning (i.e. work placements under the
program), 11 per cent were in ICT work placements and of this number 33 per cent were
female students.
• ICT had the highest outcomes of students going onto either full‑time work or study (77 per cent)
post placement but with the main outcome related to full‑time study (55 per cent) and 22 per cent
onto full‑time work [the data does not specify whether or not the full‑time study is ICT related].
• Female ICT students more likely than male students to go onto full‑time study rather than
full‑time work.
• The overall trend in participation and outcomes from 2001 to 2004 has remained stable.
The program appears to provide a pathway option for some students into further study although the
precise nature of the study cannot be determined from the survey data.
Practical implementation skills and experience in current technologies is emphasised through lab work,
and this means that over time the primary skills specialization for different student intakes has shifted
from Cobol to C+ to Java.
Some universities emphasise industry work placement as a core part of the degree, with a four year
degree offering one year in industry (sometimes referred to as ‘sandwich’ courses). Several leading
universities have reported that factors such as the industry downturn in 2002–2003, and changes to
higher education funding arrangements, has made it difficult to maintain industry placements as a
compulsory element, and three year degrees are also offered which excludes the industry placement
component.
Many universities are making provision for more complex arrangements in cross‑disciplinary degrees,
such as combining ICT units with studies in commerce, languages and health sciences to enable wider
choices which may raise the employability skills of graduates. Project management in particular is
receiving a strong focus. Some universities are also recognising that for graduates to be marketable in
an international ICT employment market, they may need a good understanding of the regulatory regimes
and IP rules in different overseas jurisdictions. This suggests an increasing internationalisation of ICT
curricula. There is also likely to be increased need for students to be more culturally sensitive and
globally aware in order to be effective in overseas ICT markets.
A view from some in the ICT industry is that while universities are coming to terms with the need to
develop undergraduates’ broader business and interpersonal skills that they need to enter the
workforce, this is happening slowly in a piecemeal way and a more concerted effort is needed.
Universities however consider that they are severely constrained and lack the flexibly to respond to
industry and market demands and potential student preferences. This includes legal and funding
requirements placed upon them by government when making curriculum and course changes, and the
long lead times in preparing information and marketing on new course offerings.
5
Skills development in the marketplace
11 www.itpro.comptia.com.au/
12 For example, in (year), costs for the Cisco Certified Network Associate Program were approximately $1000 per semester.
http://academy.ee.unsw.edu.au/schedule.htm#fees
A key message from this is that ICT professionals should not be relying on their employers to supply all
their training needs. Because there is a consistent gap across all training areas surveyed, it is
reasonable to assume that employers consider that employees should be contributing to their own
training requirements—around 25 per cent of their own technical training and 30 per cent for training
in non technical areas.
There are implications in this for ICT employees and firms. For employees, unless they are initiating
their own skills update their skill set could be out of date in as little as three to five years.
Conversely, employers are likely to have to undertake major retraining programs or ‘spill and fill’ over
the same time frame because current employees will not have the full compliment of skill sets they
need for their business needs.
The majority of employers surveyed indicated that they believed employees need to look at completely
overhauling their skill sets every three to five years, suggesting that this is indeed what is happening.
13 ACS Policy Statement on Off‑shoring, May 2004 and Study of ICT Outsourcing and Off‑shoring in Australia, Whitehorse Strategic
Group, May 2004
More recently, one of the world’s leading consulting firms McKinsey & Company reviewed the impacts of
off‑shoring on the US workforce14 and concluded that while the US economy gains from off‑shoring,
companies and governments should do more to help workers cope with the faster rate of job change.
6
Future ICT skills demand
15 Vision 20/20: Future Scenarios for the Communications Industry—Implications for Regulation (Final Report, April 2005)
www.acma.gov.au/acmainterwr/_assets/main/lib306/vision%202020%20final%20report.pdf
Assessment of the impact of investment on skills demand will need to consider capacity of the current
skills pool to supply the skills, how the new skills required can be obtained, and in what time frame
they will be available. The make‑up of the current skills pool is poorly understood. Each ICT practitioner
has their individual portfolio of skills and the current labour market data collection stops at a
measurement of occupational groups. This makes it impossible to estimate the dimensions of the
current use of skills and how practitioners and trainers may adapt to demands for new skills. Without a
sound knowledge of the current skill base it is not feasible to forecast future needs.
Interpreting demand requirements related to both old and new technologies, and combining this with
forecasts of the supply of new skills from retraining practitioners and new entrants to the ICT workforce,
is an immense task. It is unlikely any reliably useful forecasts can be made even with detailed data on
primary and secondary ICT skills in use.
The United Kingdom and Canada have both tried integrating technology forecasts with labour market
statistics to attempt to forecast future ICT skills supply and demand. Both studies resulted in very high
level analyses that reflected on broad technology trends. The level of analysis did not facilitate detailed
planning to respond to the broad trends.
Demand for the diverse technical skills that make up the ICT labour market constantly changes and it
successfully adapts in the longer term. Although shortages appear in some specific skills from time to
time, the market does work to even out supply and demand of ICT skills. New technologies are
constantly entering the market, while others are reaching a peak of utilisation. Other technologies are
progressively outdated over long periods, but some residual continuing demand for older ICT skills
remains. More commonly, the core technologies widely in use are progressively upgraded and ICT
practitioners upgrade their skills concurrently.
16 DEWR Job Outlook, Department of Employment and Workplace Relations, June 2004.
Industry employment projections are part of the development of the occupational projections. Future
demand for ICT occupations in Australia is ‘driven’ by the combined impact of:
• projected employment growth for the main industries employing ICT workers (industry growth
effect); and
• changing occupational composition: demand for an occupation resulting from a higher share of
employment in industries (occupational share effect).
The occupational employment projections are at an aggregated level, especially since the current
occupational classification groups ICT Professionals into just two unit groups (IT Managers and
Computing Professionals). Consequently, DEWR employment projections are for three ICT occupations:
IT Managers, Computing Professionals and Computing Support Technicians. The latest DEWR
projections (2006 update) indicate that there will be around 52 000 new jobs in these three ICT
occupations in the next five years.
It has been suggested that modelling technology trends could provide a more detailed analysis which
could identify specific skills that will be in demand. Work is being undertaken to explore the upgrading
of the Monash model to take account of technological and social change on future labour demand.
A complementary supply side forecasting system is currently being prepared.17
DEWR undertakes a six monthly ICT skill shortage survey which is based on the recent recruitment
experience of employers and ICT recruitment agencies, and examines whether employers have been
able to find suitable workers. The ICT skill shortage research focuses on specialised ICT skills, not just
occupations, due to the complex nature of ICT demand. The survey asks employers if they expect these
skills in demand to get easier or harder to find over the next 12 months.
The DEWR ICT skill shortage survey provides information on the percentage of ICT vacancies filled and
skill shortages and recruitment difficulties for around 80 specialised ICT skills, for each State and
Territory. DEWR has earlier noted that “Australian and world economies are experiencing rapid evolution
in specialised skill needs and such ‘prediction’ (of future skill needs) is not prudent. The focus is
therefore rather on providing information on prospective skill needs that will help to guide the response
of the employment, education and training markets.”18
The scope for reliable ICT skills forecasting in Australia is at present severely limited by the difficulty
and cost of obtaining the complete and accurate detailed information required to develop well founded
forecasting models.
17 C Boswell, S Stiller and T Straubhaar, Forecasting Labour and Skills Shortages: How Can Projections Better Inform Labour
Migration Policies, Migration Research Group, Hamburg Institute of International Economics (HWWA), July 2004
18 DEWR submission of May 2003 to the Senate Inquiry Bridging the skills divide
7
The future ICT professional
The hallmarks of the ICT professional will soon include creative, interpersonal and project
management skills, as well as expertise in specific areas such as health and education, and the
ability to effectively mesh hard and soft skills.19
The Working Group suggests that the term ‘ICT professional’ is now far too generic and fails to provide
the necessary context for the ICT work that is performed. This might be addressed by developing a new
hybrid description which combines the essential technical aspect of their work i.e. being a
‘technologist’, with the industry or particular discipline in which the technology is being applied e.g.
communications, financial services, health, mining etc.
This would generate an entirely new set of occupational descriptions for ICT such as financial services
technologist, communications technologist etc. Within these job titles there could also be scope to
emphasise their particular field of specialisations, just as occurs now in many areas of medicine and
the law. For example, “I’m a financial services technologist specialising in e‑security”. The intention
would be that this new shorthand might be more readily understood when promoting and describing ICT
careers to young people, parents and teachers.
The new ICT nomenclature developed as part of the Australian and New Zealand Standard Classification
of Occupations (ANZSCO) will help to identify occupational clusters within ICT Professionals.
Research from leading industry analyst Gartner presents a vision of the future ICT professional in 2010
as the ‘versatilist’—one who has numerous roles, assignments and experiences and creates synthesized
knowledge and context that fuel business value. For ICT professionals to function as the ‘versatilist’
they will need to understand business realities—industry, core processes, customer bases, regulatory
environments, culture and constraints20.
Gartner predicts that by 2010 the ICT profession will be split into four main areas of expertise:
• technology infrastructure and services, with growth in service, hardware and software companies.
Network design and security will remain strong everywhere, with routine coding and programming
off‑shored to developing economies;
• information design and management, with growth in business intelligence, online consumer
services, workplace enhancement. Search‑and‑retrieval practices and collaboration, particularly in
ICT‑user, systems integration and consulting companies. In this area Gartner predicts there will be
a demand for professionals with linguistics, language, information design and knowledge
management skills;
• process design and management, involving standard operational processes (for outsourcing
vendors), competitive business processes (for ICT‑user companies) and design of automation
software (for software vendors); and
• relationships and sourcing management, requiring ICT professionals to acquire skills in this area
which demands strengths in managing intangibles, negotiating among different parties and
coordinating outcomes among geographically distributed parties with different work agendas and
cultures. In some instances ICT professionals in this area will serve as relationship managers
between overseas service providers and domestic customers.
Gartner goes on to suggest some of the ways in which ICT professionals and employers can make the
transition to this new environment and some of the challenges for employers:
ICT Professionals
• start now to assess and build their business‑specific, core process and industry knowledge;
• choose the area of expertise which best suits them and what appeals to them and place increased
emphasis on learning and relationships as key factors for their success;
• look outside the traditional business ICT world for new challenges and opportunities and new
emerging roles in areas such as in leisure and entertainment, not‑for‑profit and government;
• acquire business training and education as well as technical proficiency; and
• tap into professional, personal and social networks, whether to face‑to‑face or virtual, to explore
options and opportunities and to keep an objective eye on their career paths.
Employers
• develop and redirect professional opportunities for staff;
• develop growth paths and careers opportunities within each of the four areas of expertise; and
• anticipate that some ICT professionals will want to move out of technical areas into new more
business focussed areas.
Conclusion
8. Conclusion
The ICT Skills Foresighting Working Group was established to provide advice to Government on a range
of issues relating to the information and communication technology (ICT) skills market. In addressing
these issues the Working Group has reviewed current trends and likely future developments within
Australia’s ICT industry and their implications for ICT skills development. This included forecasting
future ICT skills demand, the fit between industry skill needs and existing training, and options for
better meeting the future skill needs of industry.
In contributing to the preparation of this report the Working Group acknowledges that the
recommendations put forward are not an overarching solution to the supply and demand issues
surrounding the ICT skills market. However, the Working Group firmly believe that a coordinated
response to the recommendations from government, industry, employers, ICT professionals, students,
and education and training providers will form the basis for positive change. Implementation of the
recommendations in this report is critical if Australia is to maintain competitiveness and maximise the
potential of ICT generated productivity growth across all sectors of the economy.
Appendices
Appendix A
ICT Skills Foresighting Working Group Membership and Terms of Reference
The ICT Skills Foresighting Working Group was chaired by Mr Keith Besgrove, Chief General Manager,
Information Economy Division of DCITA and supported by a DCITA secretariat. Mr Andrew Bray and
Mr Denis Hart of the Department of Workplace Relations and Employment also attended a number of
working group meetings and provided information such as that presented in Appendix C.
Appendix B
Overview of the ICT industry in Australia
The traditional Australian ICT industry, as measured on the basis of firms deriving at least 50 per cent
of their income from the sale of ICT goods and services, accounts for only some 40 per cent of ICT
professionals. The remaining 60 per cent are spread across other sectors of the economy—for example,
banking, transport, agriculture—reflecting the shift of the ICT industry into domains in which it
operates, the integration of ICT in economic activity and the increasing reliance of all economic sectors
on ICT‑based goods and services.
This picture is confirmed by the 2005 Sensis Business Index Special Report, ICT Production in
Australian SMEs, 2005. Sensis’ survey of a representative sample of small to medium enterprises
(SMEs) across the economy estimated that 85 per cent of the ICT goods and services produced by
SMEs in Australia are produced by firms outside the ICT industry as traditionally defined. Firms outside
the ICT industry were producing ICT for their own business operations, to sell as ICT or to embed in
other goods and services that they sold.
Nevertheless, the traditionally defined ICT industry represents Australia’s core capability in ICT
production. According to the ABS ICT Satellite Account21, the value of Australian production of ICT
goods and services by ICT specialist firms is estimated to be approximately $58.8 billion:
• manufacturing $1.8 billion
• wholesale trade $8.9 billion
• telecommunication services $32.6 billion
• computer services $15.5 billion
ICT value added production by specialist ICT firms only is 4.1 per cent of total Australian GDP in
2002/03. However this estimate does not take into account the full contribution of ICT tools and
enhancements across the economy through improved operational efficiency, product and service
innovations, and new business models and markets.
The Australian ICT industry comprises about 24 000 specialist ICT firms which employ approximately
234 700 people. As shown in Table 1, most of the firms are micro‑firms (0–4 employees) and the 188
largest firms (100 or more employees) account for 55 per cent of total employment in the industry.
Firm size (number of employees) Total number of ICT businesses (%) Total ICT industry employment (%)
0–4 79 15
5–99 20 30
100 or more 1 55
21 ABS, ICT Satellite Account 2002/03, Cat. No. 5259.0, released March 2006
Australia is developing strengths in computer services and software in niche high end applications and
markets, reflecting the competitiveness of Australian skills and the demand from Australian users.
McKinsey & Company identified two strands of major opportunities for Australian ICT producers:22
• providing specialised applications and services to global markets—for example, for the mining
sector and computer games industry; and
• providing specialist skills and services for global multinational companies—for example, as regional
hubs for high end research and development work.
Appendix C
Overview of ICT employment in Australia
In February 2006, Australia had 356 600 ICT workers spread across all sectors of the economy. While
it is difficult to draw clear boundaries around the question of ‘what are ICT occupations’, the
occupations presented in Table C.1 are the main ICT‑specific occupations and provide a guide to the
employment base for ICT.
The two largest occupations—Computing Professionals and IT Managers—together comprise ‘ICT
Professionals’. In February 2006 there were 206 300 ICT Professionals employed in Australia.
ICT represents about 3.6 per cent of the total workforce and is higher than for Europe (about
2.5 per cent) and the United States (about 2.8 per cent). This is likely to be an under‑representation of
ICT occupations as some ICT occupations and specialisations are not explicitly recognised in the
current occupation classification used by the ABS. Table 1 shows the occupation code, based on the
Australian Standard Classification of Occupations (ASCO 2nd edition), for each ICT occupation.
The new Australian and New Zealand Standard Classification of Occupations (ANZSCO) will
significantly upgrade the quality and usefulness of data collected on ICT occupations. ANZSCO will also
provide an ‘alternative view’ of ICT occupations that will reflect a more inclusive view of the ICT
industry. The ANZSCO classification will be implemented in the August 2006 Census, and in the
Labour Force Survey from August 2006.
• More information on the ICT nomenclature in ANZSCO is available in the Information Paper on the
ABS website (www.abs.gov.au)—ABS Cat No. 1221.0.
ICT occupations
Computing Professionals, the largest ICT occupation, accounts for 45.7 per cent of all employment in
ICT occupations across the economy (Figure C.1). The next two largest ICT occupations are IT
Managers (12.1 per cent) and Computing Support Technicians (11.4 per cent). The ICT occupations
reflect a mix of skill level requirements, based on ASCO 2nd edition definitions.
• Professional and managerial occupations, including IT Managers, Computing Professionals and
Electrical/Electronics Engineers require a bachelor degree or higher qualification (several years
relevant experience may substitute for the formal qualification).
• Trades occupations, such as Electronic Trades, require an Australian Qualifications Framework
(AQF) Certificate III or higher qualification.
• Associate Professional occupations, for example Computing Support Technicians and Electronic/
Electrical Engineering Associates, generally require an AQF Certificate IV, diploma or higher
qualification.
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Some leading recruitment firms and senior IT executives consider that today’s IT professional:
• must adopt a holistic approach to business, with a strong business and administration base
under‑pinning their technical knowledge and skills;
• needs to offer a broader range of skills such as customer service, presentation skills, high level
report writing ability, high level management and interpersonal skills;
• needs to be less purely technically focused, given the ready availability of off‑the‑shelf software
packages; and
• can make a crossover into ICT from another industry so long as they possess transferable
skills, such as an understanding of how a business operates and end‑to‑ end appreciation of
business processes.
In the past decade employment for ICT Professionals has risen strongly, albeit with employment
declines around 1999 and, more recently, in 2004. While the employment losses in 2004 reflected
the downturn in the ICT industry, this is also an adjustment following the very strong growth in the
past 10 years.
Figure C2: Employment trends for ICT occupations—10 years to Feb 2006 (‘000)
225
200
125
100
75
25
Information Technology Managers
0
Feb-96 Feb-97 Feb-98 Feb-99 Feb-00 Feb-01 Feb-02 Feb-03 Feb-04 Feb-05 Feb-06
In the 10 years to February 2006 employment for all three ICT occupations rose strongly. Computing
Professionals rose by 54 600 or 50.4 per cent, including:
• strong growth of 13 200 or 8.8 per cent in the year to February 2006;
• employment for IT Managers rose by 35 600 or 462.3 per cent; and
• Computing Support Technician employment grew by 17 000 or 72.1 per cent.
Figure C6 presents employment levels for ICT Professionals, the combination of Computing
Professionals and IT Managers, for the period February 1990 to February 2006. The number
employed rose strongly between 1994 and 2003 to 204 700, before levelling‑out and then falling
to 188 600 in February 2005. The strong rise in the past year has taken employment for
ICT Professionals to 206 300.
Employment trends for ICT occupations mirror developments in the Computer Services industry (an
Australian and New Zealand Standard Classification of Industries—ANZSIC—three digit industry), as
shown in Figure C4. As the graph shows, employment in the Computer Services industry rose very
strongly in the late 1990s, and during 2000, before declining in the following years.
In many respects this decline can be viewed, in part, as an adjustment following the previously very
strong growth, as well as reflecting the world‑wide downturn in the industry. There is evidence of a
turnaround, with employment growth in the past year. In the 10 years to February 2006, employment in
the Computer Services industry rose by 88 700 or 141.6 per cent to 151 400.
300
250
Computer Services
200
100
All Industries
Telecommunication Services
50
Feb-96 Feb-97 Feb-98 Feb-99 Feb-00 Feb-01 Feb-02 Feb-03 Feb-04 Feb-05 Feb-06
100
95 Electronic/Computing
Engineering
90
85
80
All Graduates
75
70 Computer Science
65
60
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Unemployment
The recent improvement in the ICT labour market is clearly evident in the unemployment rates for ICT
occupations. For IT Managers the unemployment rate in 2005 (1.0 per cent) was around one fifth of
that in 2003 (4.9 per cent). The unemployment rate for Computing Professionals has halved from
4.1 per cent in 2003 to 2.1 per cent in 2005.
• Occupational unemployment rates do not include first job seekers and hose unemployed for
two years or more, and are typically lower than the overall unemployment rate (currently close
to 5 per cent).
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Source: ABS, Labour Force Survey, Australia, original data, annual averages
Figure C7: DEWR’s ICT vacancy index, January 2002 to April 2006
300
250
200
150
100
50
02
03
04
05
5
06
6
2
5
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There is a higher proportion of male ICT professionals in every industry group. A similar picture
is apparent for the ICT industry (Table C3), where women constitute 18 to 26 per cent of
ICT professional employment.
Table C3: Share of Males/Females Employed in ICT roles in ICT industry sub‑sectors, 2004
An examination of the distribution of ICT workers in the three main ICT occupations shows that around
one in five ICT Professionals (IT Managers and Computing Professionals) are women. While only a small
proportion of the workforce, comments from female IT managers indicated that the skills of female
candidates were valued and competitive in the higher‑end jobs. Women have a higher share of
employment for Computing Support Technicians (28.3 per cent in 2005).
Figure C.8 also highlights the high proportion of full‑time jobs for ICT workers, ranging from around
95 per cent for IT Managers and 92 per cent for Computing Professionals, down to 88 per cent for
Computing Support Technicians. This characteristic may impact on female participation in the
ICT workforce.
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In the internet and multimedia sectors, digital industry management is dominated by females with a
background in marketing and public relations. ABS Labour Force Statistics indicate that females are
well represented in public relations and marketing professional roles, holding about 56 per cent of jobs.
They also indicate that females account for about 46 per cent of graphic designers and illustrators.
Assessment by the Equal Opportunity in the Workplace Agency (EOWA) of compliance reports
submitted by IT employers with over 100 employees indicates that women comprise 31 per cent of
employees in the IT sector. This is lower than the average of 47 per cent for all industry sectors. EOWAs
report also reveals that females are relatively well represented in management positions across the IT
industry despite the low proportion of female employees. Table C4 reveals that 24 per cent of females
occupy such positions.
Table C4: IT specialist firms and female managers, provided by the EOWA
Figure C9: Computing Professionals—Percentage share of employment by age. Median age for this occupation = 35 years.
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The ICT survey findings indicate that nearly 84 per cent of vacancies advertised by employers were
filled within six weeks of advertising, almost the same filling rate as the previous survey in May 2004
(see Figure C10). Of the larger states, between 2004 and 2005 vacancy filling rates rose in New South
Wales, Victoria and South Australia, but fell sharply in Queensland.
The survey found that the ICT labour market has tightened (see Figure C9), a view consistently evident
in the advice from ICT recruitment agencies that they were experiencing recruitment difficulties, and in
many instances shortages, for some ICT skills.
Figure C11: Number of suitable applicants per ICT vacancy—2004 and 2005
15
2005
12
2004
9
0
NSW VIC QLD SA WA TAS ACT NT Australia
Appendix D
Overview of ICT Skills Supply in the Higher and Vocational Education Sector
Definition of ICT
Information and communication technology occupations have constantly evolved and expanded over the
last 10 years. Continual redefinition of the profession over this time has meant that standards for data
collection have changed periodically. These changes mean that the supply chain can be mapped more
accurately over the last five years than for any longer period, and the data presented in this report will
concentrate on analysis over this time.
23 www.aqf.edu.au/aboutaqf.htm#why
Figure D1: DEST Higher education statistics 2004: Time Series Award Course completions 1994 to 2003
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Award Course Completions for All Students by Citizenship and Broad Field of Education (Information Technology),
1994 to 20031
1997 1998 1999 2000 2001 2002 2003
Information
Technology 1994 1995 1996 (b) (a) (a) (a) (b) (b) (b)
Domestic
students 7508 7613 7863 8523 8755 9062 9198 8268 9494 9093
Overseas
students 951 1159 1345 1554 1844 2071 2580 6556 8993 10 013
Total students 8459 8772 9208 10 077 10 599 11 133 11 778 14 824 18 487 19 106
(a) Data for 1992–2000 have been mapped from field of study classification to field of education classification. .
(b) The data takes into account the coding of Combined Courses to two fields of education. As a consequence, counting both fields of education for
Combined Courses means that the totals may be less than the sum of all broad fields of education
Figure D1 shows that there has been more than a doubling in the number of students studying
information technology between 1994 and 2003. Since 2001 this growth has been represented by the
large increases in the number of overseas students (by more than one thousand percent). Domestic ICT
enrolments steadily climbed until 2000, when there was a sudden fall of approximately 11 per cent,
with fluctuations in enrolments since this time.
This fall in ICT completions domestically contrasts with a continual increase in student numbers overall
across the 10 year period examined. In 2003, IT students were 8.9 per cent of broad field of education
categories. IT student numbers increased by 3.3 per cent in 2003, but this was below the average of
5.4 per cent. However this does not reflect the students of other fields studying aspects of IT (i.e.
creative arts has the highest increase of 14 per cent and undoubtedly contains an increasing IT or
digital content component) and the impacts of technology convergence blurring distinctions between
ICT and the fields of endeavour they are used in.24
24 www.dest.gov.au/NR/rdonlyres/D9625459‑D755‑49D0‑ABEB‑91EC384F71EA/4221/summ_tables_3.xls
25 www.ibsa.org.au/content/ict/tpica05_overview.html
Level Qualification
Certificate I ICA10105 Certificate I in Information Technology
Certificate II ICA20105 Certificate II in Information Technology
26 www.ibsa.org.au/content/ict/tpict02_overview.html
LEVEL QUALIFICATION
Certificate 11 ICT20102 Certificate II in Customer Contact
VET Students and subject enrolments by major course field of education, 2002–04
VET data includes information on training provided through VET in schools, pre‑apprenticeship and
apprenticeship programs, national training packages delivered through government and private training
providers and certifications and niche training through industry partnerships. The VET sector also
collects statistics compliant with the Australian Standard of Education.
27 NCVER, Australian vocational education and training statistics Students and courses 2003, ANTA 2004 page 3
www.ncver.edu.au Downloaded 2004
The following table shows data at the broadly designated information technology subject area:
As can be seen, there has been a substantial fall in student numbers of 33 per cent between 2002 and
2004. This is set against an overall fall in VET students of 5.5 per cent.
Female students represent 32 per cent of students in 2004. This is in contrast to the higher education
sector where female students in 2004 represented 29 per cent and 18 per cent of undergraduate and
postgraduate students respectively. Female students are therefore less likely to be enrolled in IT courses
as their levels of qualification increase.
The data refers to the national training packages related to Information technology and
telecommunications.
The number of students completing packages with the VET system has fluctuated with peaks in 2000
and 2003 and a five year low in 2004.
VET in Schools
The subjects undertaken within the VET in schools program are those at the Certificate I and II levels.
These subjects tend to be IT rather than telecommunications based.
The following data shows a fall enrolment in VET in school IT courses:
28 For a given Module/Unit of Competency, the parent Training Package denotes the industry that developed the training package.
29 Source: NCVER National VET Provider Collection, released July 2005; Public VET System Tables for Australia
Appendix endnotes
1 Taken from www.dest.gov.au/NR/rdonlyres/3EA0FE6E‑B402‑45A6‑9C37‑3907844B16FE/7636/
12Appendices.xls, Higher Education Statistics 2004, Appendix 2.1
2 Source: NCVER National Provider Collection, released July 2005, Table 20 available at .
www.ncver.edu.au
3 Source: NCVER National Provider Collection, released July 2005, Table 29 available at .
www.ncver.edu.au
4 Source: NCVER National VET Provider selection, Released July 2005, Table 22. www.ncver.edu.au/
statistics/vet/ann04/id04/s&c2004table22.xls
Further information
Department of Communications, Information Technology and the Arts www.dcita.gov.au
ictskills@dcita.gov.au