Skills shift in the age of automation and pandemics

What we know of the manufacturing industry in Australia today is very different from what was known several decades ago. In the 1960s, Australia reached its manufacturing peak, achieving historic heights in employment and gross domestic product (GDP) of 30%. This boom was driven by the demand for offshore exports, specifically in the automotive and clothing industries. These days, manufacturing looks a little different: Australia imports almost everything and according to figures, an estimated $202.8 billion worth of goods were imported in 2020.

Mind the (skills) gap

Much of the decline of local manufacturing is largely due to market forces, specifically the lack of skilled workers. To add to this, original manufacturers have also stopped producing key components for machinery, making it obsolete and difficult to source.

Coupled with the COVID-19 crisis, these changes have prompted questions regarding Australia’s self-reliance and ability to manufacture its own goods. Fortunately, those factors can be dealt with if industry leaders act accordingly.

The digital era

The COVID-19 pandemic has placed a new perspective on the role of automation and robots in industry. Data from McKinsey and Company suggests that digital adoption in the Asia–Pacific region has accelerated at a rapid pace — placing the region four years ahead of its pre-pandemic rate of adoption.

Yet, in Australia, this growth also faces obstacles. According to a recent report by the Royal Melbourne Institute of Technology and Deloitte Access Economics, Australia will need 156,000 more digital technology workers by 2025, representing one in four jobs created during that period. A quarter of those the report surveyed said their digital skills were not at the level required or are outdated with their employer’s expectations.

The report concluded that, if the Australian workforce can meet those needs through upskilling, it could turbocharge its economy. So how can Australia keep up with the skills demand?

Time to upskill

Historically, Australia has conquered its skills gap with a demand-driven system for immigration policy, with visas designed to help employers plug skills gaps with international workers. With borders still closed, perhaps until the middle of 2022, investing in existing talent is key.

Business-led recovery must focus on two areas: upskilling and retraining. One solution to dealing with the transition to automation is for manufacturers to ensure work personnel are gaining skills that allow them to thrive in an accelerated digital environment. Skills that are transferable, technical and future-ready will go a long way in tackling the skills crisis.

While automation does tend to reduce the number of employees needed at a given facility, it can also increase the levels of skill required. In other words, companies must invest in and train their staff to get the most from the latest digitised automation systems.

The pandemic has also led to unintended, long-lasting delays in training and education. While equipping staff with the skills to handle new technology is important, employers should be wary that degrees and apprenticeships often focus on training engineers in the most recent technology. Introducing the next generation of engineers to cutting-edge technology will help attract more young people into the field, but may not equip them for the intricacies of the job.

From our experience, a large proportion of manufacturers still use some legacy equipment in their production line. Therefore, a new entrant into the industry may not know how to handle an obsolete equipment breakdown, particularly as newer technology has fewer maintenance requirements. The company should ensure that they train staff in new and legacy equipment to reduce the chance of unnecessary downtime.

To emerge stronger from the COVID-19 crisis, it is essential that manufacturing firms understand where the skills gap exists and ensure opportunities for growth are met through upskilling and retraining.

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