The older I get, the more time I spend thinking about the future of Australia. In particular, I worry about the kind of country my four daughters and the rest of their generation will inherit, and the kind of opportunities that will be available to them when they finish their education and are ready to go out and find their place in the world.
I believe the future success of Australia — and consequently our children — depends on our ability to keep up and compete in the economy of the future.
It’s clear that the resources boom is not going to sustain us much longer, and we’re already seeing the consequences of a failure to adapt … slower growth, declining real incomes, declining employment, and increasing shortfalls in tax revenues.
Businesses are working hard to come to terms with the new reality and are beginning to build workforces that will enable them to compete in a new, digital economy. Just to give you a sense of how the digital landscape is being transformed, consider this fact:
During 2002, humans created five billion gigabytes of data. We now create that same amount every two days. It’s estimated there are 4.4 zettabytes of data in existence — that’s 1 followed by 21 zeros for the mathematically inclined — almost as many stars as there are in the visible universe.
But what does this mean in practical terms for the children of today who are starting to think about their future?
PwC’s new research shows that over the next 20 years, 5.1 million Australian jobs — that’s almost half of our current workforce — are at high risk from digital disruption. This means there’s a greater than 70% their job could be automated by technology.
Finance clerks, insurance and real estate brokers, and even accountants could all become jobs of the past as businesses increasingly look for employees with the STEM skills that will define the jobs of the future.
Yet, just as employers’ appetite for workers with these skills takes off, Australia will struggle to meet the demand. Year 12 participation in STEM subjects is declining, and in 2012 just 16% of our higher education students graduated from STEM -related courses. Compare this to Singapore, where that proportion was 52%.
Our research shows that Australia needs to move 1% of the current workforce into STEM jobs over the next 20 years if we’re going to be competitive with the top performing OECD countries in terms of technology and R&D led growth — countries like Israel, South Korea, Germany and Sweden.
If we continue as we are, our research shows that we could forego up to $57.4 billion in GDP by 2035 — a staggering amount, equivalent to the current value of the car and parts manufacturing industry. Ultimately, of course, our children will pay the price for our failure to act. At PwC, we believe addressing this gap is a matter of urgency.
I am aware of the irony that Australia’s largest accounting firm is releasing research that shows our profession is at the highest risk of automation. However PwC is ahead of the curve on self-disruption and I’d like to give you two examples.
We apply automated data assurance techniques at 350 of our largest audit clients, and by the end of next financial year this will be available to all our clients. In a global first we are piloting with one of our audit clients the use of predictive analytics to help anticipate future issues based on previous experience.
And last year we launched the online portal Nifty R&D, which allows companies to apply for and receive the R&D tax rebate they might not even know existed, potentially increasing profit margins by several percent. PwC benefits by keeping the digital challengers at bay, while creating value for our clients.
But part of our vision and strategy as a firm is to also make a positive difference to broader society. With that goal, we have made a decision to put STEM at the heart of our strategy. Our vision is to partner with business and government to help Australia become a global leader in innovation, underpinned by excellence in STEM capabilities.
It’s great to see other businesses are also taking the lead on this issue — CISCO announced their collaboration with the NSW Department of Education in March, and just a few days ago BHP came out with a major commitment to a program encouraging girls to study maths.
But time is not on our side. The global economy is advancing at an unprecedented rate and Australia has long way to catch up to world-leaders in innovation and STEM. We need to act now.
This is an edited extract from a speech given by Luke Sayers to the Australia Israel Chamber of Commerce business lunch on April 30.
Read more at The Mandarin: Why all-sector innovation is the key to unlocking potential