Skilling the Australian workforce for the digital economy cover

Skilling the Australian workforce for the digital economy

By Victor Gekara, Darryn Snell, Alemayehu Molla, Stan Karanasios and Amanda Thomas Research report 8 May 2019 978-1-925717-30-3


This study explored the current digital skills demand and supply situation in Australia’s workforce. The research investigated the skills impact of digitalisation on two industry sectors—transport and logistics, and public safety and correctional services—as well as the wider workforce. The research culminated in a proposed Australian workplace digital skills framework to help identify digital skills gaps among Australian industries and workforces to enable the development of appropriate training programs.


About the research

Digital technologies such as artificial intelligence, robotics and automation are transforming the world of work. Developing the appropriate digital skills in the workforce is an important component in Australia’s effort to compete in this rapidly emerging global digital economy.

This research explores the current digital skills demand-and-supply situation in Australia for the general workforce (rather than for ICT specialists). The research approach includes a review of international frameworks of digital skills and case studies in the transport, postal and warehousing, and public administration and safety industries. These industries were selected because a key threat to their productivity, and therefore their contribution to the national economy, is a workforce with inadequate digital skills. A survey of human resources, skills and training decision-makers across Australian industry more generally was also undertaken, with specific attention given to the skills impact of digitalisation.

The research highlights that a multi-faceted approach from the Australian Government and industry stakeholders is required to enhance digital skills development in the general workforce. To facilitate this, the authors have developed a digital skills framework, whose purpose is to identify digital skills gaps within organisations and to assist in the development of targeted training programs.

Key messages

  • The degree to which digitalisation is occurring in Australian workplaces is highly variable, as are the approaches of employers in meeting their digital skill requirements. Three different categories of employers were identified, based on their approaches to technology uptake and skills acquisition:
    • Aggressive technology adoption and skills-development approach: these employers tend to pursue a wide range of strategies in their digital skills acquisition, including aggressive external recruitment and internal skills development.
    • Keen technology adoption but cautious skills-development approach: these organisations undertake gradual change while ensuring that current productivity levels are not undermined. At the same time, they educate their workforce about the importance of new workplace technologies, with the aim of introducing gradual cultural change.
    • Appreciation of growing need for digital skills, but no investment in skills development: this group tended to expect that newly employed recruits possess the necessary digital skills (which were mostly relatively basic digital skills).
  • More than half of the industry survey respondents were not satisfied with the digital skills of their vocational education and training (VET) graduate recruits and had concerns about the adequacy of VET qualifications in meeting industry skill requirements. An analysis of training packages in the two case study sectors indicated that a significant amount of digital training content was included in the packages. However, this content is mostly pitched at low levels of basic digital literacy. Furthermore, most of the digital skills training was in elective units as opposed to core.
  • The employers in this research showed strong concern about the future availability of workers with sufficient digital skills. Despite this, many are not proactively developing a clear strategy for, and investing in, their future digital skills needs across their workforces.

Readers may also be interested in another National Centre for Vocational Education Research (NCVER) report: Seet et al. (2018)[1] investigated the implications of digital disruption for the VET sector, finding that disruptive technologies are influencing the demand for both technical and soft skills in many occupations, with some skills in decline and others in high demand.

[1] Seet, P, Jones, J, Spoehr, J & Hordacre, A 2018, The fourth industrial revolution: the implications of technological disruption for Australian VET, NCVER, Adelaide.

Executive summary

Digital technologies such as artificial intelligence, robotics and automation are transforming the world of work. Developing the appropriate digital skills in the general workforce is an important component in Australia’s efforts to compete in this rapidly emerging global digital economy. While there are many definitions of digital skills, for the purpose of this project we define digital skills as a combination of[2]:

  • digital knowledge (theoretical comprehension and understanding)
  • cognitive knowhow (involving the use of logical, intuitive, innovative and creative thinking in the digital space)
  • practical knowhow (including the use of digital tools such as hardware, software, information and security systems)
  • competence (ability to learn, adapt and apply digital knowledge in a new setting)
  • ‘digital’ attitude (value and beliefs), which workers need to master and demonstrate in the digital age.

This project investigates the current digital skills requirements of the Australian workforce, the capacity of the vocational education and training (VET) system to effectively meet the growing need for digital skills across the workforce, and employers’ views, strategies and commitment to adopting digital technologies and meeting the associated digital skills needs of their workforces. Rather than focusing on the demand for skills in the information and communications technology (ICT) sector, this project primarily addresses the digital skills of the general workforce; that is, those not directly employed in specialised ICT roles but who are increasingly expected to use digital systems, technology and processes effectively in the emerging highly digitalised systems of work.

This project was undertaken over several stages and employed a number of methodological approaches; namely, a literature review, case studies and surveys, a content analysis of job advertisements and relevant training packages, and a review of international digital skills frameworks. A broader survey of human resources, skills and training human decision-makers in a cross-section of industries also informed the project, although much of the research was focused on two industry sectors: transport and logistics, and public safety and correctional services. This report synthesises the findings from all stages, further details of which can be found in an earlier working paper for this research project (Gekara et al. 2017) and the two supporting documents accompanying this report.


Job advertisement and training package analysis

A content analysis of the job advertisements and training packages associated with the two industry sectors found that:

  • Only 24 job vacancies across the 1708 jobs analysed specifically mentioned particular digital skills. This raises important questions about employers’ specification of digital skills, particularly given industry evidence that the economy is rapidly entering a digital age, one characterised by sophisticated efficiency and productivity-enhancing mechanical and digital technologies (Deloitte Access Economics 2016; Hajkowicz et al. 2016). Even in job advertisements where digital skills were specifically mentioned, the level of expected application is generally vague and mostly basic. This suggests that employers are not clearly articulating their specific skills needs.
  • Within the 11 training packages analysed, digital skills-related keywords and terms were found in a large number of units of competency. Although not conclusive, this suggests that these units are to some extent designed to develop digital skills. A closer examination of the training packages, however, shows that the majority of the units that address digital skills tend to be electives as opposed to core units. In sum, the training system does not accord digital skills ‘essential skills status’ (at least in these two industry sectors).
  • The digital skills training content in the training packages examined is mostly lower level, addressing basic digital literacy and the basic application of computer devices for data capturing and processing. There is a greater focus on skills for basic operational and non-supervisory occupation levels. From a skills supply perspective, this is likely to undermine the transition to a digital economy, where widespread adoption of digital technologies across all industries and occupational levels has been predicted.
Review of digital-skills frameworks

The review of international digital skills frameworks highlighted the issues associated with the conceptualisation, measurement and evaluation of digital skills. The review indicates that:

  • Digital skills development needs to encompass not only efficient and effective use of digital technology, but also the development of complex cognitive, interpersonal, entrepreneurial and innovation dimensions.
  • Safety, framed particularly in terms of cyber security, privacy and protection of personal data, is prominent and needs to be included in discussions of digital skills.
  • The development of a framework to capture these broad and fluid areas of digital skills has to balance the framing of individual skills and proficiencies while taking into account the work context.
Case studies and survey

The findings from the two case studies point to several key themes. Employers tend to indicate their demand for digital skills in job advertisements in narrow terms, with reference primarily to the specific software and hardware tools that their employees need for day-to-day work. This, however, is not consistent with the range of digital skills needs to which human resources, skills and training decision-makers referred in the survey and interviews.

The human resources, skills and training perspective suggests that some Australian organisations expect their workforce to be equipped with digital skills that range from a mindset (including entrepreneurial, creativity and experimental), to functioning within an increasingly digitalised workplace and confidently using the advanced features of generic and industry-specific digital technologies and enterprise systems. Also needed are employees skilled to troubleshoot the problems that arise in the increasingly digitalised workplace and who recognise the security, societal and environmental implications of digital technologies. In view of these expectations, employers from both the case study industries and the survey expressed dissatisfaction with the digital skills of VET graduates and the relevance of VET qualifications to current industry digital skills requirements.

The impact of the increasing use of digital technologies on skills requirements spreads beyond ICT departments to the general workforce and is creating gaps in the digital competencies of current workers in areas such as: analysing digital risks to identify cyber security threats and vulnerabilities; extracting insights from advanced data analytics systems and dashboards; and recognising and troubleshooting problems in digitalised workplaces and identifying innovative ways to resolve them.

The adoption of digital technologies — and the concomitant skills gap — is neither experienced at the same pace in all industries nor influencing all occupations to the same extent; for example, many employers in the case study industries are taking a relatively gradual approach to digital technology uptake. They have adopted past waves of digital technologies such as online transactional and information systems but are not widely embracing the current wave of technologies, which includes social media, mobile technology, analytics, cloud computing and the internet of things. This study shows that employer hesitation in adopting newer digital technologies is to a large extent influenced by the lack of basic digital skills among their workforces and the perceived costs of digital upskilling.


There is a need to advance digital skills development in Australia, an imperative that requires a multi-pronged strategy from government and industry stakeholders. Such a strategy necessarily requires the development of a national digital skills framework, which could be integrated into the Australian Core Skills Framework. For their part, employers should undertake an assessment of digital skills gaps to ensure that their workforces are upskilled to meet the challenges of the emerging digital economy. The digital skills embedded in VET programs and in industry training packages therefore need to be revised and updated to cater for future digital skills requirements.

To facilitate implementation of these recommendations and to support the development of targeted training programs, this study has developed a comprehensive digital skills framework, enabling the identification of digital skills gaps among Australian industries and workforces.

[2] See support document 1 for further detail.


Skilling the Australian workforce for the digital economy .pdf 909.2 KB Download
Skilling the Australian workforce for the digital economy .docx 5.1 MB Download
Support document 1: a review of digital skills frameworks literature .pdf 523.2 KB Download
Support document 1: a review of digital skills frameworks literature .docx 150.8 KB Download
Support document 2: case studies and survey findings .pdf 1.2 MB Download
Support document 2: case studies and survey findings .docx 5.5 MB Download

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