The vocational education and training (VET) sector seeks to teach courses that will meet the future demands from employers in terms of the quantity and types of skills required. This report, which is part of the larger consortium program, 'A well-skilled future: Tailoring VET to the emerging labour market', examines how the VET sector might anticipate what the future needs of employers might be and describes the difficulty of projecting the evolution of the economy. It offers an initial evaluation of the accuracy of the principal model used for skills forecasting in Australia (the MONASH model) and concludes with a discussion of how best to manage the uncertainty over the shape of future skills demand.
This report is part of a suite of research projects entitled 'A well-skilled future: Tailoring VET to the emerging labour market' conducted by a consortium of researchers from the National Institute of Labour Studies and the Centre for Post-compulsory Education and Lifelong Learning. This report aims to clarify the term 'skill shortage' and to explain how skill shortages can be resolved naturally by market forces. It also provides some guidance on determining when a skill shortage requires public-policy intervention.