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Select Committee on the Future of Work and Workers
14/05/2018

DEAN, Dr Mark, Research Associate, Australian Industrial Transformation Institute, Flinders University

HORDACRE, Dr Ann-Louise, Senior Research Fellow, Australian Industrial Transformation Institute, Flinders University

SPOEHR, Prof. John, Director, Australian Industrial Transformation Institute, Flinders University

Committee met at 09:04

CHAIR ( Senator Watt ): I declare open this hearing of the Senate Select Committee on the Future of Work and Workers. I welcome you all here today. This is a public hearing and a Hansard transcript of the proceedings is being made. The hearing is also being broadcast via the Australian Parliament House website. Before the committee starts taking evidence, I remind all witnesses that in giving evidence to the committee they are protected by parliamentary privilege. It's unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee, and such action may be treated by the Senate as contempt. It is also contempt to give false or misleading evidence to a committee.

The committee generally prefers evidence to be given in public, but, under the Senate's resolutions, witnesses have the right to request to be heard in private session. If a witness objects to answering a question, the witness should state the ground upon which the objection is taken and the committee will determine whether it will insist on an answer, having regard to the ground which is claimed. If the committee determines to insist on an answer, a witness may request that the answer be given in camera. Such a request may, of course, also be made at any other time.

With all of that done, I now welcome representatives of the Australian Industrial Transformation Institute of Flinders University. I understand that information on parliamentary privilege and the protection of witnesses and evidence has been provided to you.

Prof. Spoehr : Yes.

CHAIR: I now invite you to make a short opening statement, and we'll have some questions for you after that.

Prof. Spoehr : Thanks very much for inviting us to be here today. It's a question of great interest to us, as I think it is to a really wide cross-section of the Australian community. In this brief opening statement I won't, of course, go over what we've said in the submission, but I'll talk a little bit about some general reflections, give an update on the growth of robotics and automation internationally, and then touch on some work that's happening at the Flinders University Tonsley campus, which I think is of interest, as it's very pertinent I think to this discussion around the future of work and industrial transformation generally.

Claims that automation and artificial intelligence technologies could lead to the loss of about half of all jobs have struck fears into the hearts of many. While recent research suggests that both Australian and South Australian workers are highly vulnerable to automation, are we really heading for a workerless future, an automation nation? I don't think so. The automation debate is often polarised between hope and fear—hope that new technology will usher in a period of growth and fear that it might do so at a great cost to employment. One thing is for sure: we are at the beginning of what many are calling the fourth industrial revolution. This is an age characterised by digitalisation, where objects are increasingly interconnected, and artificial intelligence and machine learning make automation of complex tasks much more possible than in the past.

Much of the public debate surrounding all of this is very narrowly focused on our fascination with robots and fears that they might one day be used to inflict great harm or be capable of initiating action independently of us. One thing is certain: a robotics arms race is underway internationally. In 2016, around 300,000 industrial robots were sold worldwide. This was a 16 per cent increase on 2016. There are in excess of 1.8 million industrial robots in operation worldwide. Total annual sales of robots are expected to top 520,000 units by 2020, with the strongest growth in China. While we need to better understand the robotics revolution taking place around us, we need to pay more attention to the implications of artificial intelligence for work, so not so much the robots but the artificial intelligence sitting behind the robots that is making things possible that weren't possible in the past.

Combined automation, robotics and artificial intelligence technologies have profound implications for employment and the jobs of the future. While great occupational disruption is already flowing from automation, the relationship between technological innovation and employment is much more complex than is commonly understood. Routine tasks and capabilities, rather than occupations per se, need to be the focus of much greater attention in our attempts to better understand the likely employment impacts of automation. In other words, some tasks within jobs are more automatable than others.

Our research, which replicated the famous research undertaken by Frey and Osborne at Oxford university, not surprisingly found that two in every five, or 41.3 per cent, of South Australian jobs were at high risk of automation. What does that mean? It means that these jobs could theoretically—and I stress 'theoretically'—be automated, given existing technologies. But we also acknowledged in our work that more recent research, focusing on the vulnerability of tasks to automation, suggests that less than 10 per cent of occupations are likely to be fully automated, given existing technologies. I think the more sober, more enlightened, more nuanced research reinforces this view that we are looking at somewhere between five and 10 per cent of jobs that are potentially fully automatable, given existing technologies, not the 40 to 50 per cent that the early work of Frey and Osborne suggested.

Our work, replicating Frey and Osborne, gives us a different picture to that which is, I think, being developed by other researchers on workforces. It focuses, in particular, on the creative workforce. It does so for one particular reason, and that is that we know that creative occupations—occupations that are knowledge intensive and have a high level of problem-solving and creative skills embedded in them—are less vulnerable to automation. It was very interesting and enlightening, in the research we did, to focus on those occupations, to illustrate how important it is to increase the resilience of occupations to automation by increasing the knowledge intensity, the problem-solving intensity, of occupations going forward. So there are important lessons, I think, from research like this for how we move forward.

I just want to briefly touch on what we are doing at Flinders University at the moment to try and prepare ourselves better for understanding, on the one hand, the impacts of automation and artificial intelligence on work, and, on the other hand, preparing our workforce and our companies better for this new environment that we are in. We have recently established the Tonsley Manufacturing Innovation Hub at Tonsley. For those of you who are not familiar with Tonsley, it's probably best known as the former site of Mitsubishi automotive manufacturing. There are now more people working on that site than there were at the time that it was a functioning automotive manufacturing site, just 10 years ago. There's been an extraordinary transformation of this massive manufacturing site into an advanced manufacturing and innovation district in a relatively short period of time, with Flinders University, Tonsley TAFE and a myriad of companies. I'd characterise these companies as knowledge-intensive, advanced manufacturing and health and medical companies, clustered in an environment where they are working much more closely than is often the case in more disparate industrial environments.

In that setting, what we try to do is create a gateway into the university's capabilities. Within that one building at Tonsley, we have around 40 or 50 laboratories. On the site itself, there are a range of capabilities which historically have not been as accessible to companies as you might want and which historically have been used for teaching purposes but not so much for research and industry development purposes. The function of the Tonsley Manufacturing Innovation Hub is to unlock the access to these laboratories for collaboration with companies, in order to expose them to that range of current technologies which we characterise as disruptive technologies, in order to better prepare them to be more competitive in the current global manufacturing environment we are in, and not only to give access to that equipment but also to ensure that students—our students and those that are returning to the education and training system to better understand the technologies that are available to us—are more exposed to what I'd characterise as an Industry 4.0 standard education and training system. That's a relatively new term in the Australian context but in Europe and in Germany it is well established and there are whole range of engineering, science and social science offerings that are characterised as Industry 4.0 within the university systems in Europe—particularly Germany, Sweden, Denmark and Finland—which Australian universities are trying to emulate to ensure that we have a world-class education and training system that (1) understands what this phenomenon is—that is, the fourth industrial revolution—and (2) how we ensure that our manufacturing companies as well as a wide range of other companies are aware of all the technologies and processes that are vitally important to ensure that advanced industrial nations like Australia can remain internationally competitive.

CHAIR: We would be keen to ask some questions to dig into some of your research, although I probably should hand over to my South Australian colleagues to kick this off.

Senator FAWCETT: I echo your comments about Tonsley, particularly in some of those sorts of firms that are making global strides in their work. STEAM: you've added a new acronym to the world of employment and education. Given the focus we've had on STEM for a number of years, in some areas we've had a great take-up but in others we are still struggling to get kids to engage and remain in that field. Adding the additional elements to that, do you have any other research or indicators as to how both the education system—state and federal—but also employers can work with kids—and I am assuming increasingly younger children—to get them to engage and to be proficient in those creative capabilities that are you saying are essential enablers to the new paradigm of successful work?

Prof. Spoehr : It is a new term, perhaps better understood in the European context than it is in the Australian context. We are asking a lot of our students these days, aren't we? Not only are we asking them to be proficient in science, mathematics and technology but we now also recognise, particularly as we understand the implications of the fourth industrial revolution and the digitalisation that is embedded in that, that resilience in employment is increasingly linked to our ability to be proficient in problem-solving—our creative capabilities and skills. In some ways this is not new but in other ways it reminds us that science, technology, engineering, education in isolation from the social sciences and humanities is not going to cut it in the digital world in which we are operating so being able to add value in a knowledge intensive world, where we are competing with rapidly evolving economies like those of China and India, which are going through their own education revolutions, if you like, requires us to rethink what we expose our secondary students, our primary school students, our university students, and our vocational education and training students to as well.

I am aware through recent visits to Germany of how this task is being taken up, particularly in the vocational education and training system, by ensuring that all the latest equipment and all the latest technology is available to vocational education and training students. But there is also a major process of curriculum reform going on alongside exposing students to technology, which is focusing on what I would broadly call innovation and entrepreneurship education and training in its narrowest form. At Flinders University, we have taken on that challenge so just last year we introduced an innovation entrepreneurship offering, which is initially offered to our business students but the intention over the next three or four years is that every student in every discipline be exposed to innovation entrepreneurship as it embeds all those STEAM topics in a way that you often don't see in the Australian context. So it is a way to ensure that students are as best prepared as they possibly can be going into this new environment.

Senator FAWCETT: You're already talking about a subset of Australian young people; they're the people who have had the motivation and support around them from family, school or whatever and achieved the results necessary to get into university. Many of the roles that are at risk of being automated, whether it be on a production line, in data entry or in sales processing at a checkout, are not necessarily filled by people who would be in that university space. How do we reach the broader group of Australians and help them to become better prepared and, in your words, more resilient in an environment that's going to see more automation?

Prof. Spoehr : Well, we've been talking about a digital divide for probably 20 years, haven't we? What's going on at the moment threatens to widen that digital divide unless we take on the challenge that I think you're suggesting, and that is to ensure that digital capability is developed very early in all of our schools. We've got to recognise that the pace of adjustment, the pace of transition support for workers that are threatened with the impacts of automation is going to accelerate over the next five to 10 years.

Having just come back from the Hannover technology fair, I can tell you that the pace of change in Europe is extraordinary. The technology service providers are very aggressively pushing the adoption of technology in Europe and Asia at a pace we can only imagine here in Australia. What I infer from that is the need to step up our efforts here in Australia in recognition that the costs of adjustment and the pace of adjustment has to accelerate beyond its current pace, particularly over the next five to 10 years. I think there are pretty severe adjustment costs in the absence of stepping up our efforts to provide transitionary education and training supports for workers that are vulnerable.

What we don't know as well as we should know at the moment is sectoral vulnerability or firm-based vulnerability. The research that we cite and that many others cite actually doesn't tell us much about what's going to happen on the ground. We need to do a lot more work—ground truth, if you like—on what the likely indications are of accelerated digitalisation in Australia on a sector-by-sector and firm-by-firm basis. A lot of our research is abstract; it's hypothesising that ten, 20 or 30 per cent of workers might be impacted. I can tell you from our own experience working with companies that that will be mediated by the circumstances each of those companies face and their ability to be able to absorb new technology, and the ability of the workforce to be able to adjust to the introduction of new technologies.

Senator FAWCETT: Do you do any work looking at the changing demand side of the curve? I look at food production, for example, and increasingly you see automation in terms of the reaping of crops. People are demanding quality in terms of presentation from the way that vines are pruned and grapes and berries harvested right through to the picking of tomatoes on vines as opposed to just tomatoes pulled off of plants. Do you see the demand side driving some niche areas where there will still be human intervention required, if you like, to have that artisanal input to something that people are prepared to pay a premium for in terms of quality?

Prof. Spoehr : That's a really interesting question. Coinciding with this thing we call mass customisation, which involves the application of robotics and automation, is the desire for artisanal products and services. You observe that in the United States and parts of Europe at the moment, where you've got probably the best combination of human capabilities and robotics. The latest evolution of robotics is cobotics. You've got a safe about sitting alongside you. You're interacting and working with it. It might not just be an industrial robot; it might be artificial intelligence. The jobs of the future are those that involve this ultimately more seamless interaction between a human being and the technology in working environments like the ones you're describing. Horticulture is an interesting one. It involves, if we're looking at it from a value-adding point of view, an enormous amount of human creativity both in terms of the product itself and the way we package it, market it and might export it. All those sorts of difficult questions require a lot of ingenuity from us as individuals—enabled and made more productive by the applications of new technology.

Senator FAWCETT: In your submission you talk about vulnerable job sets and ones that are more resilient, but I note, even now, that for anything that is customer facing—whether it's the checkout at Bunnings or the fin-tech revolution, where you used to have people on the phone taking information or taking data and entering it—you have a growing workforce which is a customer-facing interface with the technology: people assisting with the self-serve checkout and people answering problems when the computer has frustrated the life out of somebody trying to get their financial data in. In terms of your assessment of work, have you taken account of what I see as a growing sector of what I call the human-machine-interface workforce to ameliorate the frustrations that occur from people who are not yet adept with technology?

Prof. Spoehr : Again, a very good question. We do too little work here in Australia on the human dimensions of the technology. I think what you're describing is a very real phenomenon, where there is a level of technologically induced stress and anxiety in our daily interactions with technology that we haven't thought through as well as we should in terms of their human consequences. I suppose the earlier experience was with call centres and the operation of call centres offshore, which induced a lot of frustration amongst those that waited endlessly on the telephone line for an answer. Equally, that user experience or consumer experience is being frustrated by the application of technologies that haven't been well thought through in terms of their human consequences. I think there's a lot of good productive work—in fact, there's a whole industry that can grow up around developing more-human-centred applications of technology. That's the smart way of thinking about digitalisation and technology in Australia, ensuring that the engineers, the scientists and the designers are working alongside the social scientists, psychologists and so on, thinking through the human consequences of the technology before it's applied.

There's some interesting work happening around this, and it happens in the context of two things. The first is this idea of living laboratories, which you've probably heard about, which are testing out the technologies in real-world environments with consumers and users before they're applied. I think we would do well in Australia to adopt that approach. It's been used in the most pronounced way in Europe at the moment. The second is an idea called 'design-led thinking', which is a way of bringing the engineers, scientists, computer scientists and social scientists together to solve problems jointly. Within our universities that doesn't always happen as well as it should, and within our vocational education training systems that doesn't always happen as well as it should. We have to break down those disciplinary boundaries as much as possible and work much more closely with end users than we currently are to ensure that those sorts of problems that you're describing don't become serious problems for us down the track.

Senator PATRICK: Thank you very much for coming along. It was a great submission; very measured and quite detailed. In your submission you talk about the 20 most vulnerable occupations and you talk about the least vulnerable occupations. Is there a list of new occupations that you're seeing?

Prof. Spoehr : I can certainly provide the committee with a list of occupations that are emerging as a consequence of the application of new technologies—and they have pretty extraordinary titles, as you have come across as you have been going around the nation, in terms of the way in which they relate to the application of new technologies. There is no doubt that digitalisation and the Fourth Industrial Revolution have led to a whole range of occupations that we could only have imagined a few years ago, and will continue to do so.

That's the other side of the story that we know too little about in Australia. We have scanned the international literature, we have looked for that answer, and, unfortunately, there is just not as much evidence as there should be, and as much focus as they should be, on that question of identifying the skills and capabilities that will be embedded in the so-called jobs of the future in the industries of the future. We tend to focus more on those jobs that are likely to be vulnerable as a consequence of the technologies.

Senator PATRICK: Where do you go to, then, if is not in your submission and you are saying it is a hard question to answer? Where should a parent of young children in Australia go to seek advice on what future jobs are likely to emerge?

Prof. Spoehr : The traditional sources have been forecast based on historical trends. The Commonwealth and the state government publish occupational growth trends based on historical trends. In terms of jobs of the future, those that might emerge over the next five to 10 years beyond the occupational categories that we have at the moment, the best research I have seen on that was a United States based study that talked with a range of employers and technology service providers about what they predicted would be the occupations of the future, the new jobs that would emerge over the next five or 10 years. We haven't done that in the Australian context; it would be different from the US based research. I think the US based research is pretty informative. I would be happy to provide the reference, which I think is very useful for us. But we need to ground-truth that in the Australian context because the Australian economy is very different from the United States economy.

Dr Hordacre : Some of the research coming out suggests that people have up to 20 jobs in a lifetime and around five occupations. So, rather than focusing specifically on occupations, they are suggesting a focus on what they call enterprise or core skills, which covers a range of things which are flexible and enable you to work in a range of occupations into the future. That is things like digital literacy, problem solving, communication training and writing. Those are some of the core skills that are valuable for people to learn. So, if you are thinking about what the kids of the future need to focus on, some of those skills, through school, are really valuable.

Senator PATRICK: We have received evidence from the German government—Industrie 4.0 briefings—and also the Singaporean government. It is not up to a researcher to define what this is; those governments take a huge role in looking into the future and then steering the education system and directing money at areas where there are likely to be future niches or growth. Is that lacking in Australia?

Prof. Spoehr : I am aware of the Smart Specialisation agenda in the European context, which the European union and member nations have adopted to help answer some of these questions. That is based on existing technologies, and those that are likely to exist in the future, and on the industry structure that particular nations currently possess. How can you ensure that you are able to maintain living standards by the maintenance of knowledge intensive jobs into the future? This is the principal reason for the Industrie 4.0 agenda in Germany at the moment. It is not so much a technological question as it is a question of national economic strategy. It is being adopted to ensure that Germany remains a successful advanced manufacturer for decades to come, in the face of international competition. To that extent, that national agreement between government, industry, the union movement and the community is an example of a national policy setting which has attempted to identify those sectors which you are most likely to successfully compete on. But it is not only that; it is about how you can invest in these sectors to ensure that they are capable of growth and that the underpinning education and training system is well-prepared to support that.

Here in Australia, through the Prime Minister's Industry 4.0 Taskforce, we have recognised the importance of that. I think the real challenge for Australia is to invest a lot more than we currently are in accelerating the pace of the transformation in a way that is human centred, that brings people along with us, and is world class in its operations. Often the things we do in the Australian context are relatively modest in scale. The Europeans have adopted and rolled out so-called Future Factory environments to link universities with industry. These are very substantial facilities that we don't have in Australia. They showcase the latest technologies and provide new education and training environments for industry and government. In the UK, they are called Industry Catapults and there are similar analogues in some of the European countries. We can learn a lot from Europe and the United States to the extent that they are more advanced in their thinking around Industrie 4.0.

Senator PATRICK: If I were to say—because I know that you wouldn't say this, Professor—that we are lazy in our approach to this, would you object to my characterisation?

Prof. Spoehr : I wouldn't say that!

Senator PATRICK: I didn't think you would! But you would agree that there is a big contrast between what is happening in Europe and Australia? They are driving themselves towards the future and we are almost tailgating. With the tyranny of distance, we are not in amongst what you probably saw in Hanover—huge industry, and government support.

Prof. Spoehr : What I do know is that we could substantially accelerate the growth of knowledge intensive advanced manufacturing in Australia if we adopted some of the methods and approaches that are currently prevalent and that are well resourced by government. Whether it be the Singaporean government, the Chinese government, the American government, the German government or the Danish government, they are all very aggressively involved in supporting their industries to grow as rapidly as possible and, in particular, to adopt digital technologies at a pace that ensures that their manufacturing sectors are not in decline. Germany is a great example of that. They are not only making sophisticated knowledge-intensive manufactured goods; they are manufacturing the technologies that make the goods. So they are technology makers as well as technology takers. They are in a very strong position. We are technology takers, in that we adopt the technologies to manufacture advanced manufactured goods. I would prefer that we were technology makers and takers.

Senator PATRICK: You mentioned in your submission that one of the things that causes change in future occupations is disruptive technology. I am wondering whether, as well is not focusing on future jobs, we are not looking hard at disruptive technologies—3D printers and other things. Is there a good place to go to examine what the disruptive technologies are?

Prof. Spoehr : What I alluded to before is a good example of where you can see these things in their full complexity. The Future Factories that exist internationally are the best showcases that I've seen. The Hannover Messed technology fair, the largest technology fair of its kind in the world, is an extraordinary fair to visit for that reason. But here in Australia we need to be able to easily access and understand the technologies that are currently available to us and understand their implications not just from a technological point of view but also from a wider social and economic point of view. That is the reason why we in our own modest way at Flinders and at Tinsley have established the Tinsley Manufacturing Innovation Hub. It is designed to establish a foundation to do just that. What we hope to do over the next few years, working with government, industry and the community, is to substantially grow that into a world-class facility that could be a national showcase for disruptive technologies.

When we think about disruptive technologies, it is important we recognise that sometimes they are not necessarily revolutionary technologies, but evolutionary technologies. A lot of this technology has been with us for a long time, but what is transforming the technologies and making them disruptive in some ways is the pace of adoption—there is a big technology push from the technology service providers, who are very aggressively trying to market their products and services internationally—and the competition from China, India and Asia. They are adopting this technology at a pace we can only imagine.

Senator PATRICK: Do we as a committee do ourselves a disservice by not looking at the disruptive technologies, or is that topic so large that it almost requires another forum? They clearly feed into the future of work.

Prof. Spoehr : There is no doubt about it. I don't think you can separate the two. When you are thinking about the future of work, you've got to think about the implications of disruptive technologies. In my mind, there is no doubt about that. It is important to understand which ones are disruptive and also to understand how they are disruptive in the context of business model innovation. Often, it is not so much the technology that is disruptive as it is the business models that are attached to them. There is probably too little focus on the disruptive nature of business model innovation compared to the technologies themselves.

Senator PATRICK: I imagine those business processes would also be facilitated by some technology?

Prof. Spoehr : Absolutely. The proliferation of digital services, and the rise of Uber and all the classic names, is a consequence of digitalisation.

Senator SIEWERT: I have really enjoyed your submission and your evidence. I have a couple of questions that follow on from Senator Patrick's questions. I want to start with where you left off and go back to how we make this happen and leadership from government. You commented that it is about the business model around disruptive technology and the human application of technologies. It seems to me that, with our current economic system, there is a role for government because we can't leave it to business to do this sort of thing, and we are not seeing a lot of that happening now. What are the key things the government should also be doing to address the points that you have just been making? I get the point about skill development in critical areas—understanding of digital technology, problem solving et cetera. But what are some of the other measures beyond the investment approach in driving some of that research? What are the mechanisms we can put in place to shape the way that this is developing so that it is doing what we are trying to accomplish, which is to ensure that we still have a community where people can work?

Prof. Spoehr : I think one of the overarching frameworks that we might want to consider is something that has emerged, again, in the European context and, to some extent, in the American context: the idea of inclusive growth. It tries to grapple with how, in this digital revolution, we are cognisant—and we are much more than cognisant; we understand—what the human dimensions of change are, both on the technological and the business model innovation sides, so that we are able to make informed decisions. That's where the European Union and individual nations have been doing a lot of work to try and understand—before we're overwhelmed by problems associated with too rapid a rollout or too narrowly focussed a rollout of technology—and be aware of the human social, and economic implications of the technologies that are currently available to us. It's partly a research question, but it's partly a research-to-inform-policy question, which has implications for industrial relations, for occupational health and safety legislation and for the way in which we organise our workplaces. It also helps make decisions about what sorts of transition support both governments and companies need to offer workers to deal with the consequences of accelerated digitalisation. I think a national strategy around the future of work and workplaces would be a good starting point to create the institutions that are necessary to ensure that Australians understand what is unfolding around us internationally and what might be the most desirable pathway for us going forward. The Germans, again, have chosen the direction that they are going in. They call it platform industry 4.0, as a national economic and social development strategy. I think we'd be sensible to think about it in those terms. It's such a multifaceted challenge that it requires national leadership, and it also requires education and training of our companies and the community to ensure that people understand the implications and the consequences of this.

Senator SIEWERT: How do you see the care economy fitting in with the creative economy? Does it sit there or does it sit outside the creative economy? That's one of the areas we have heard about, and I see it as also a growth area.

Prof. Spoehr : Absolutely. One only needs to look at the growth in children's services and child care and related services to understand that, going forward, we can expect substantial occupational growth. But so much, of course, of the care economy is unpaid. This is part of the debate around the future of work that is probably not the focus of as much attention as it should be. The care economy is an enormous part of our economy. If you were to value it from a GDP point of view you would find—I can't remember the current figures—that it is a very substantial amount that exceeds formal GDP, if you value the unpaid economy. The point I want to make is that it's not so much that there isn't sufficient work, it's just that not all work is remunerated. If you were to look at the potential for remuneration of the informal economy, or at least some occupations or tasks within the informal economy, then you might arrive at a different conclusion about whether or not work is going to be scarce in the future or not. Certainly, that's a question that we ask ourselves in trying to think about a more holistic way of understanding the future of work. It's important to understand the future of work in the context of both the paid and the informal sectors and ask, as many are asking, whether or not you might apply some sort of income or remunerate some things in the informal economy that we currently don't remunerate.

Senator SIEWERT: There are three key chunks. I'm sorry that I'm jumping around a bit, but I want to include those three key chunks in my questions. On the issue around the number of jobs that are disrupted or that will be lost due to automation—you articulate some of those for South Australia—but it seems to me there may be different regions around the country that are affected differently. Is that how you see it? South Australia is affected because of the type of industry it has. Is it the same for elsewhere or will it defer for different regions, depending on their industrial base or job base?

Prof. Spoehr : It certainly will vary from state to state and region to region, depending on their industrial base—for example, the mining sector. In the mining sector we're seeing the increasing uptake of digital technologies, automation technologies and robotics technologies, so the sector is becoming much more productive off the back of investments in equipment. Going forward we could expect productivity to rise enormously, but it's likely to be a sector that employs fewer people than it currently does to produce the same level of output.

On mass manufacturing: of course any state that has heavy exposure to mass manufacturing is seeing enormous pressures as we exhilarate the uptake and diffusion of robotics and automation technologies. This is certainly the experience internationally. I've been into some factories internationally, which you can't take pictures of, which are so-called examples of industry 4.0. There are certainly workers in them, and they're highly trained knowledge workers, but there are very few of them. There is a desire by some in the community to apply that technology in its entirety to the operation of some companies.

I don't see that same culture in Australia. I think that we have a better understanding or a better appreciation of the desire to get a better balance between the application of technology on one hand and the need to ensure that there are good quality, decent jobs for people on the other. As you say, it will play out differently from state to state, partly dependent on the predominance of different sectors, but also partly as a consequence of the so-called digital maturity of different companies. Different companies have more or less different levels of capability to adopt new technologies, depending on the age of the company and depending upon their ability to invest in new capital equipment and so on.

Senator SIEWERT: A supplementary question: the strategies that we develop need to also incorporate layers into a regional approach to make sure that the right settings are there for the different industrial bases and the different bases of each regional economy.

Prof. Spoehr : The short answer to that is, yes, absolutely. I think regional strategies are necessary as part of an overall national strategy.

Senator SIEWERT: Thank you.

CHAIR: I'm sorry, but we will have to leave it there. It's been really great to hear about the local research you've been doing. You've give us something to think about. Thanks for your time.