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Select Committee on the Future of Work and Workers
04/06/2018

FITZPATRICK, Mr Rob, Chief Executive Officer, Australian Information Industry Association

HICKS, Ms Kim, Senior Manager, Policy and Advocacy, Australian Information Industry Association

WORTHINGTON, Mr Tom, Private capacity

[14:11]

CHAIR: I now welcome the Australian information Industry Association and Mr Tom Worthington. Thanks for joining us today. I understand that information on parliamentary privilege and the protection of witnesses and evidence has been provided to each of you. I need to duck out about halfway through you this session to do media interview, but Senator Patrick will be here and I promise I will read the transcript. I now invite each of you to make a short opening statement and then we will have questions after that.

Mr Fitzpatrick : Thank you for the opportunity to address the committee and to lodge submissions. It's AIIA's view that no matter what view you take on whether technology will be the end of jobs or whether it will create jobs, technology is here to stay, and the action required by government is the same. Australia needs a positive, proactive narrative, supporting early action and intervention to build the human and workforce capabilities and skills required to prosper in our digital age. To evidence this, AIIA commissioned a Galaxy poll last year to do a sentiment analysis on how Australians feel about innovation and technology and it tells a very interesting story.

Ninety-nine per cent of Australians believe that innovation and the development of new technology is important to our future prosperity. And despite concerns about the impact of emerging technologies like artificial intelligence, automation, robotics and similar, most Australians—that is, 97 per cent of Australians—feel positive about their ongoing work and job opportunities. What's even more telling is, when you peel the onion and ask why, the majority, 54 per cent, believe that while there have been many technological revolutions throughout history, new industry and jobs have emerged over time and in each of those situations. Not so great news, though, is that Australians don't have strong faith in our government to develop policies in areas such as education and training to support the transition to a new economy, with only one in four Australians, 25 per cent, attributing their positive outlook on jobs to government policies. To best adapt to technological change, most Australians, 76 per cent, think that workers need to stay up to date with changing technology in their own industry, irrespective of what industry they're in. So the question is then: what does this mean for us and what does this mean for this inquiry?

On the one hand, the distinction between government driven or individual accountability, perhaps, points to a lack of confidence at a national level in a clear vision, a shared commitment and a plan on how Australia will adapt and leverage technology in the future. On the other hand though, you have a nation that depend on themselves and understand the importance of staying up-to-date with changing technology. People are willing to take responsibility for their own upskilling and recognise it's not all up to government, so we think there's a real opportunity here for government to take a lead, and as AIIA there are two areas that we would call out.

Central to an appropriate government response is the urgent need for a bipartisan, economy-wide future workforce development strategy. And the second is a future workforce action group, formed to put meat to the bones. A future workforce development strategy would start by establishing a needs and gap analysis, informing the government response. It would identify new jobs and roles that are emerging as technological developments penetrate deeper into economies and labour markets. It would identify new skills requirements for these jobs, identifying the transition from existing, salary-based skills to future workers who are agile, flexible and creative problem solvers. It would facilitate digital literacy and digital inclusion. And, finally, it would address education and training gaps, some of which I know you picked up in the last discussion.

As I mentioned, underpinning this AIIA strongly recommends establishing a high-level future workforce action group to ensure sound policies will be turned into robust programs with appropriate regulatory oversight. In other words, moving from words to action and outcomes. As a starting point, this action group must include employee groups, business, the education sector and government. Its priorities need to be identifying and addressing the needs of vulnerable sectors of the labour market, and providing opportunities for workers to re-skill and upskill to ensure potentially disrupted workers are not displaced or dislocated from the broader community. It needs to investigate new skill acquisition and employment-based learning pathways, including lifelong learning. It needs to build Australia's digital literacy capabilities to prevent social and economic dislocation. And, finally, working with unions, employers and the broader community, it needs to help develop more appropriate and effective digital acceptance, skills and a safety strategy.

At the end of the day, on the basis of a lot of specific research and working with our members, AIIA believes that we can work together to create and articulate a unifying vision, a strategy on the future of work—and applaud this committee for its intent to do so—and back that up with a series of specific actions. AIIA and our members would be very willing to lean our shoulder into the wheel on this regard.

CHAIR: Thanks very much. Very constructive suggestions.

Mr Worthington : I'm an honorary lecturer in computer science at the Australian National University where I teach computer professional skills, and I'm a member of the professional education governance committee of the Australian Computer Society, where I help set the education standards for computer professionals, but I'm making this submission in my own individual capacity as an educator.

You've heard from others about how technology is going to eliminate many jobs, and I would agree with the estimates of somewhere between 10 to 40 per cent of jobs. Some of my colleagues in the IT profession in Australia are effectively helping that happen. Workers will need better soft and technical skills. They will also need regular retraining because they will have multiple careers. I guess I'm an example of that. I started as a computer programmer with the government, working for the defence department. I've been retrained with a second skill as an educator, being trained in Australia and in North America.

Australia already has an education system which could provide work-ready learning across schools, vocational and higher education, and I suggest that we just need to tweak it a bit to make it more flexible. We need to strengthen the vocational education and training—VET—sector, so that it will blend between secondary education and universities. We need to fix up the conditional loans schemes so that they can be applied to the VET sector more freely.

We need to make university more flexible where the assumption isn't that someone does a three-year degree full-time and the exceptions are part-time people. The assumption should be that people will do smaller subdegree qualifications. The Vice-Chancellor of ANU mentioned microcredentials. They'll be doing those part-time and mostly online, not on campus, in response to the needs they have in the workplace. Actually most university courses are already blended. They're already mostly online and partly on campus as we speak, but that's not reflected in government policy or the rhetoric of universities mostly.

We have a particular problem with international students. Regulations require them to be enrolled full-time all the time and that imposes a burden on people doing the education because, if a student fails or drops one subject, they have a problem. So I think we need to make that more flexible and allow them to do part of that online and allow them to do less than a full-time load.

We need to address soft skills more in our university system. I help do that at the ANU with the TechLauncher program where we have teams of students working on real problems for real clients in Canberra. These are skills that can be taught, but the problem is that the people teaching them—university academics—generally don't have the skills to do the teaching. We need to ask our university lecturers to be formally qualified in teaching I believe, which is a problem because university professors like to make other people do courses but they don't like to do them themselves. So I think that will need some encouragement via funding and perhaps some regulation in the system. That's about all I had to say. I welcome questions.

CHAIR: Thanks, Mr Worthington. At this point I might exit and hand over to Senator Patrick. I hope to be back before you finish up.

ACTING CHAIR ( Senator Patrick ): Thank you, Chair. Perhaps I'll start in reverse order. Mr Worthington, you describe your own situation as having changed throughout your career. I myself have managed a number of engineers over time. There is a progression we currently have in engineering where you might be a computer scientist then perhaps either go off in a different direction to management or broaden yourself from computer science to hardware to then algorithm development and some other disciplines, so you become multidisciplined. So is there really a change that is taking place or are you simply leveraging off your past knowledge and steering your career perhaps to a higher level?

Mr Worthington : I think there is a change. You need to learn new skills in a new area. The problem comes when you need to learn them relatively quickly. One of the examples given in the previous evidence was about cybersecurity. I help teach some people who are going to go into that area and that involves for technical people issues of human behaviour, international relations, the law and all sorts of things that they weren't previously familiar with. So I think this not just a matter of degree but a matter of learning new things.

It can also be that they're not necessarily at a higher level of abstraction—for example, to teach in the Australian vocational education sector I had to go to TAFE and learn TAFE teaching, even though I was already giving lectures at universities. I had to learn a different way to approach it. I could've said: 'That's TAFE teaching. That's a low level. Why do I have to get that?' But I had to learn a different way of teaching, so I went to the appropriate place to learn those types of skills. I think we'll see people having a grab bag of little qualifications and different skills they get from different forms of institutions.

ACTING CHAIR: I guess I was suggesting that as you move along in your career and you do make changes there are, really, additional skills that you're learning which complement the next thing that you're doing. You don't end up giving away some of those past skills that you have learnt.

Mr Worthington : I wouldn't agree with that. For example, I tutor teams of students writing computer software and I have to say to them, 'The commuter programming languages I learnt stopped being used before you were born, so I can't help you with the technical aspects of your code. I can help you with how to talk to the client, how to manage the team, how to plan and strategise, but for the technical elements of this I am no longer confident in this area.'

ACTING CHAIR: I think there is a place for people who can install a program in assembly language. It's still okay!

Mr Worthington : Yes, but they've stopped using some of the processes I used as well.

ACTING CHAIR: Sure.

Mr Worthington : I don't think it's just a matter of adding to your skills. There'll be many skills that are no longer relevant. AI was mentioned. There'll be things that used to be seen as a very important technical skill. Now the computer does it, and what was your main bread and butter nobody really wants.

ACTING CHAIR: I noticed you were in my line of sight when I was asking about the 10 per cent versus 40 per cent. You seemed to be nodding on the 10 per cent.

Mr Worthington : It's somewhere in between 10 and 40 per cent for jobs disappearing. Nobody really knows. I think there's a view out there that all this technological development happens in a smooth, planned way. But, having seen it from the inside, we're making it up as we go along and we don't really know, when we produce some new technology, whether it's going to take off or not, whether people will really accept automated self-driving processes or not. So, to a large extent, we don't know.

ACTING CHAIR: That's the cruise-control example I was using: a safe way to get, eventually, to automation but it may not happen quickly, or maybe there's some point where it suddenly takes off. I guess these things are hard to predict.

Mr Worthington : Yes. I have people come up to me every week and say, 'Hey, look, we've invented a new' something. And I go, 'Yes, and what can you use it for, and will anybody want it?' They're the really hard questions.

ACTING CHAIR: Yes. I ran an R&D cell. I had 30 ideas pop before me per week and every once in a while one of them had a market, so I know where you're coming from. You talk about the development of new technology as being something that Australians want to have happen. Noting that, from my experience, you need to do the R&D stage, then you need to move to prototyping, then to manufacturing, and get the feedback loop into the development cycle, are we in some sense handicapped because of our shrinking manufacturing sector?

Mr Fitzpatrick : Kim Hicks is part of AIIA's policy team, so if I omit anything of note I would welcome Kim chipping in. I guess part of the way I'd answer that question is: what is the R&D around? Is it hardware or software? Increasingly, what we are seeing, particularly around technology development, is that it's orienting more to software, and it's creating a big challenge for the entire R&D tax incentive scheme and its execution through AusIndustry. But in the world where technology is being developed, increasingly as software rather than hardware, the feedback loops and the global connectivity is even more important than it has been before.

That said, to your specific question about manufacturing, if you look at the way the workers at the Holden plant in South Australia have been supported in their transition to new jobs and the state government policies around creation and investment of smart-manufacturing businesses—and, in fact, the federal government's centre of excellence will focus on advanced manufacturing—you'd say that Australia is trying to pivot away from, perhaps, areas where manufacturing at scale is not something that we can effectively or efficiently do in Australia but that we can play in targeted areas of the hardware-manufacturing market.

Ms Hicks : Our key position in relation to that is really drawing back on the Productivity Commission's report on digital destruction. They basically found that, in order to help workers transition into a digital age, the government's role is to support displaced workers rather than focus on protection models, particularly around industries. In relation to manufacturing specifically, there's definitely a growth market in high-technology manufacturing in Australia. We've got a competitive advantage. Realistically, if we're looking at manufacturing as a whole outside of that high-tech area, we're not going to be as competitive as countries like China and other developing countries. Rationally, we shouldn't be playing in that market. It's the high-end market where we have the advantage. More generally, the Australian corporate tax system and tax reform also need a bit of review in order to help Australia become more innovative and get more investment in industry, whether it's manufacturing or more broadly, so that we're creating technology and not just using technology.

Senator PATRICK: Being a crossbencher, I'm wondering whether Senator Cormann has planted you here to hit me with the tax cuts! When you talk about protectionism, I think there's a difference between protectionism and encouraging investment in a particular area. I'm not necessarily saying that you seek to protect, but perhaps we've failed to encourage in some areas. A colleague of mine has just been working through the iPhone with me, demonstrating all of the technologies of the iPhone. They came from government sponsored programs—the LEDs through to the microchips through to some of the software and sensors that might be used in some of the systems. So, by encouraging industries, you can grow them without protecting.

Mr Fitzpatrick : I have a small example. It's almost peripheral, but it's indicative: the $20,000 automatic deduction. The consistent example is for small businesses to invest the $20,000 on a new truck or a bit of hardware for their business. The last research I saw showed that 47 per cent of small businesses in Australia do not have a website. If we are moving to a digitally enabled and digitally driven world, we need to connect more fully online. That $20,000 could fund small business websites or be tuned to not a physical asset but an asset nonetheless for a business.

Senator PATRICK: That's a good point. I wonder whether it's feasible under the rules associated with the depreciation. Is it the case that you can do that or is it something you say we should be able to do?

Mr Fitzpatrick : I believe that at this stage we are not able to do it. I actually need to do some fact-checking on that, but it certainly is never the example. The meta-issue is: what is the nation's narrative about our move to driving a technology fuelled future?

Senator PATRICK: You've got a focus on the information industry and you said you're happy to put your shoulder to the wheel. Do you know where the wheel is at this point in time or is that part of the problem?

Mr Fitzpatrick : That's part of the reason we call for a future workforce national strategy. We believe that we know some areas that need to be driven. There are certainly many areas that my colleague here has referenced around better and more integrated education, and a work-ready education system is certainly a component of it. I articulated a few of those. But we know from analysis here in Australia that if you have an internship in your domain while you are studying then the average time to get a full-time job in your career is 1.4 years; if you do not have an internship, it's 2.7 years. Therefore, there's a fact, and we need to work in that area. There are a number of specific elements, but getting our heads together and saying, 'Here is the strategy nationally,' is what we need to do.

ACTING CHAIR: The committee has heard sufficient evidence to suggest that the wheel is missing and that we do need to do something. You would see your organisation as an organisation that could contribute to such an action group?

Mr Fitzpatrick : Absolutely. AIIA, the Australian Information Industry Association, is the peak body for the tech sector; therefore, by definition, we see across all sectors of the economy. Ninety-two per cent of our members are SMEs, and eight per cent are some of the larger Australian and global firms that are resident and active in Australia. Through the perspective of our members, we do get to see what's happening in health care, in manufacturing, in financial services, and in the digital skills area et cetera, so we do have visibility across a range of sectors.

ACTING CHAIR: Do you engage with education, with industry and with jobs—those government agencies—and have they been receptive to any approach you've made one, if you've made one?

Mr Fitzpatrick : Absolutely. For the past year, AIIA has made the future of work, jobs, and the way technology is impacting the future of work, our core mission. We released a report and made it public in September last year. We held a national summit in Canberra in March of this year—and we are taking that around capital cities—to both provoke debate and discussion around what the core issues are and what the action agenda might look like, and to get more parties to the wheel. We would argue that, apart from the fact we have both TAFE and universities as members of AIIA and therefore directly connect with and represent those areas, we bring industry and connect with government and government agencies at the state and federal level.

ACTING CHAIR: We've been looking at what Singapore does and what Germany's doing with Industrie 4.0. As the chair indicated previously, we'll be looking at what Canada is doing. Do you say you have a model that is comparable to or integrates some of the experiences from overseas?

Mr Fitzpatrick : Respectfully, the report that AIIA presented and included as part of our submission—you'll see it in the end area—has recommendations around the areas of digital literacy, digital inclusion, the development of skills and, importantly, the connection with employee groups. They have to be part of the solution.

ACTING CHAIR: I'm just wondering whether or not you had set out an org chart, with responsibilities of how you see that might work with government entities, with private enterprise, with educational institutions—whether or not you've got a mud map in your mind on how that might best work?

Ms Hicks : At a high level, I think what we'd really like to see is the government commit to the future workforce development strategy that Rob mentioned in his opening statement. We've listed the key focus areas there—the gap analysis, identifying jobs, identifying skills requirements, addressing digital literacy and digital inclusion and then addressing the education and training gaps as well. What success would look like for us as an outcome of this would be the development of that strategy, underpinned by the action group that we mentioned. The action group would definitely include people from government and academia, the unions, and possibly even international learnings that you mentioned as well, to really inform the strategy.

Mr Fitzpatrick : If I could amplify that with one comment: for the last three years, AIIA has held a global technology leaders' dialogue, where we invite global thought leaders to Australia. For the last two years, one of the core topics has been skills and then jobs of the future. The reporting and positioning that AIIA is taking is weaving through thoughts from Europe, the US and North America, and Asia.

ACTING CHAIR: Who do you say ought to develop the strategy?

Ms Hicks : It needs to be government led.

Mr Fitzpatrick : Yes.

ACTING CHAIR: Even though sometimes governments can be Luddites compared to industry, surely it needs to be a collection of people, in much the same way as the action group would involve a bunch of people.

Mr Fitzpatrick : I would agree with that, absolutely. But I think having government seen to be leading this—and perhaps that's small-G government, not capital-G government—creates an opportunity for policies to be developed and promulgated. You'll recall the statistic that I mentioned: 25 per cent of Australians believe that government has created the policy framework. I think that is one of the early gaps that could be filled.

ACTING CHAIR: To be clear, I'm just teasing out what you think. I think the chair and myself are both convinced that something needs to happen, and it's a question of how you make that happen. That might be a useful recommendation that flows from whatever work this committee does.

Mr Fitzpatrick : I would then, if I may, restate that developing the strategy and having an action group under it is critical. The thing that we haven't talked about in this conversation is pace. What will make the difference between whether it's 10 or 40 per cent of the workforce that is out of work or whether it's the three per cent that McKinsey talks about, with 60 per cent of job roles impacted but only three per cent of positions removed, is pace, and I don't think we've got time. This is something we need to be doing as urgently as possible.

ACTING CHAIR: So, yesterday is what you're saying?

Mr Fitzpatrick : Yes.

ACTING CHAIR: I might leave it there, just to make sure I don't upset the chair's schedule. Thank you very much for your evidence and for your very detailed submission as well. That's greatly appreciated. I think we now suspend for a break of 10 minutes.

Mr Fitzpatrick : Thank you very much.

Ms Hicks : Thank you.