Australia’s ongoing workforce skills shortage and lagging digital competitiveness have been exposed by stark new figures presented in the IMD World Digital Competitiveness Ranking 2024 released by the Swiss-based business school, revealing the widening gulf between government efforts and the nation’s actual outcomes.
The ranking takes into account three main factors – knowledge, technology and future readiness – and relies on hard data and survey responses.
Despite ongoing attempts to plug gaps in sectors such as trades, healthcare, and ICT through imported labour, Australia continues to face a severe shortage of skilled workers.
In 2023, there was a 50% shortage in the trades and technician sector, while “professional group” workers in health, engineering, and information technology were also in short supply, with a 48% shortfall.
The workforce crisis is particularly acute in regional areas, where better-targeted education and training are essential. Federal and state governments have introduced fee-free courses to address the skills gap, targeting industries like nursing, disability care, construction, agriculture, and digital technology. However, despite these initiatives, 77% of young Australians report needing to retrain to meet the demands of their new roles.
The country’s performance in digital competitiveness further highlights the issue, with Australia falling behind global leaders in technological skills.
According to the report, Australia is ranked 40th for digital and technological skills and 53rd for graduate science numbers, well behind the US, Singapore, and Denmark.
While Australia has improved slightly in the global rankings, boosted by advancements in AI research and policies, it continues to face challenges. In particular, Australia’s internet bandwidth speed, ranked 50th, remains a consistent weakness. Other areas of concern include the lack of graduates in science and low government cybersecurity capacity.
CEDA senior economist Melissa Wilson told innovationaus.com that Australia’s performance in the digital competitiveness rankings would have been worse without the inclusion of two new indicators, including one measuring AI articles published per capita.
Wilson highlighted Australia’s strong showing in AI policies (ranked 8th) and peer-reviewed AI literature (ranked 13th). However, the country’s weakest performance was in internet bandwidth speed, where it ranked 50th, a consistent area of weakness in previous reports.
Political Commentator Robert Weir believes that Australia’s dependence on importing skilled workers to fill critical gaps is seen as a “quick fix” that ignores the underlying issues. Weir argues that unless the government invests in shaping a sustainable and highly skilled workforce, the country will remain reliant on external labour sources.
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