The changing landscape of work

The future is bright, if we keep learning.

In a recent Blog published about the 2019 Budget, I noted the economy has been changing over the last decade. I pointed to a number of disruptions in recent times: proliferation of online streaming services at the expense of local movie hire businesses, the effective deregulation of taxi services, and the rise in online advertising to the detriment of local newspapers. Technological change has presented many challenges to both the level and type of employment available in the current economy. While unemployment remains relatively low at 5.2%, underemployment in Australia is high. From around the year 2000 unemployment has trended down while underemployment has continued to grow to its current rate of 8.6%. This figure relates to people who are currently employed but are searching for extra hours of work.

On the face of it, this might seem scary. Revenue is now streaming to a few global corporations, leaving small towns like ours facing higher unemployment and underemployment compounded with higher levels of inequality. While challenges have been presented and are a cause for concern which is reflected in underemployment rates, in turn impacting on wages growth, there are also opportunities available if we take the right path. Thomas Piketty notes in his book Capital – In the Twenty-First Century ‘the best way to increase wages and reduce wage inequalities in the long run is to invest in education and skills.’ This lends itself to the question ‘What do we have to study or what skills do we have to invest in for the future to give us the best possible outcomes?’

The make-up of Australia’s economy has changed dramatically over the last 150 years. Ross Gittins notes ‘In the 19th Century, agriculture accounted for about a third of our total output of goods and services (gross domestic product), but from about the 1930s its share started declining and today (2012) it is down to a mere 3 per cent.’ (Gittins, R: 2012,207-08) He goes on to explain the reason for the decline isn’t because we are producing less. We are in fact producing more than ever. It’s because other industries have become such bigger parts of our economy. In addition to this, technological change has meant we can produce more than ever with less inputs. While agriculture declined, manufacturing in Australia increased. Now even that has been surpassed by services. Today, services make up around 80% of our economic output. Gittins explains while our real incomes grow over time, there is a limit to how many physical goods we require and so our incomes are diverted to services like education, entertainment, recreation and financial services. Manufacturing has also ramped up in low wage cost countries which has been facilitated by our negotiated free trade agreements. Gittins notes this change does not lead to ever rising unemployment but simply a shift in our demand for services which will open up new opportunities in the economy.

It is important though to note this change does not come without anxieties. Trump won the 2016 U.S. election promising to ‘Make America great again.’ His platform was based on a return to ‘the good old days’ of manufacturing and has culminated with a trade war with China which threatens the entire global economy. Apart from the point that tariffs and other forms of limitations on trade are not good for either party, another question springs to mind: Why would you want to move your economy back to lower paid low-skilled labour intensive jobs as opposed to highly educated, less intensive and higher paid ones?

It’s likely the economy of the future will look vastly different to the economy of today. What will self-driving road and rail transport mean for the freight industry? In Australia the transport industry hires over 600,000 people, accounting for 5.1% of the total workforce (ABS Trend Data). Lets go a step further: What will automated driving mean for Uber drivers?! Lets look closer to home (by that I mean Integribooks): Accounting software is evolving every day. Payment terminals are now sophisticated to a level of sending transactional data which can be recognised by the software in order to allocate a business expense to the profit and loss without any data entry required! For the accounting and bookkeeping industry this will mean two things: The low skilled, data entry tasks will become obsolete in the very near future and people in these jobs will be required to upskill to provide management level reporting. The business of historical analysis will change into the business of advisory services and look more to future growth and opportunity pathways. Perhaps this will mean the future of accounting is actually more personable and relationship based than it has been in the past? This is certainly where Integribooks are focusing. It’s actually a slower but more intensive process. We work on the ground with you and your industry to get to know it from the inside out.

In many ways technology is not taking over but complementing our current work. For example, while marketing jobs have been around prior to the internet, its safe to say we hadn’t even heard of a ‘social media manager’ in 2004. That was just fifteen years ago. Now we employ people dedicated to understanding how Google ranks search results! Deloitte’s Industry insights paper ‘Why the future of work is human’ notes that while car manufacturing closed down in South Australia in 2017, manufacturing employment has actually been rising. A couple of things are at play here: First, some of the people employed in the car industry have moved to high-end manufacturing firms and others have been employed elsewhere due to the skills already obtained that were highly transferable to other industries.

One thing is for certain: To cope with the fast pace of change we will need to spend more time learning - either in technical or higher education, throughout our whole lives. We have to innovate and create new services that may not even exist today. Deloitte’s report predicts that ‘86% of the jobs created between now and in 2030 will be knowledge worker jobs’ and that ‘by 2030, one quarter of Australia’s workforce will be professionals. Most of these will be in business services, health, education or engineering.’ The future is bright, if we continue to learn and take hold of the opportunities that are in front of us.

Thanks for reading