Technology and changing skill requirements

Globalisation has also been accompanied by massive technological change which is transforming the workplace and bringing new skill demands. The development of existing technologies and the creation of new technologies have proceeded at a remarkable pace over the last 10 to 15 years. This has contributed to the development of new products, new services and new markets. It has helped transform entire industries, as well as the operations of numerous individual workplaces and enterprises.

The pace of technological change

Information technology changes have been most visible – rapid increases in computer power and capacity and the speed at which information can be transmitted have been matched by plummeting prices. These developments have enhanced the ability of individuals to take advantage of computer technology while also aiding networking within and across firms and between customers, producers and service providers.

While there have been significant advances, some industries, such as transportation, communications and the financial services sectors, have been faster to take up and invest in new computer technologies than others. There remain significant opportunities for other sectors such as farming, forestry and fisheries to make greater use of information technology to improve the quality of their products and the profitability of their ventures.

The pace of change driven by new technologies and technological advances looks set to continue and even accelerate, meaning that existing skills in the most high-value sectors of the workplace will need to be frequently upgraded. However, the implications of advances in the newest technologies – the genetic, robotic, information and nano processes (GRIN) – are much less well understood. These four intertwining technologies are interacting with one another, and how they will individually and collectively change the work that we do, and the way that we do that work, is clearly an area for focused attention by the Department.

On a number of indicators such as business R&D spending, rates of information and communications technologies (ICT) investment, broadband uptake and international patenting rates, New Zealand is below the OECD average. [1] 

New Zealand's industrial production remains concentrated in what the OECD classifies as low-technology sectors, for example, the primary industry, although our technology intensity in these sectors is higher than that in other countries.

Among the drivers of increased availability and access to technology will be the growing two-way flow of high-tech brain power between developing countries and developed countries, the increasing size of the technologically literate workforce worldwide, and efforts by multinational corporations to diversify their high-tech operations (offshoring high-skilled work as well as low-skilled enterprises).

Increasingly educated workforce

To respond to globalisation, productivity and technology challenges, a workforce with a greater range of skills, experience, knowledge and aptitudes is needed to lift the value of work. New Zealand’s overall level of investment in education and training will require ongoing monitoring to determine the best mix of interventions for society and the economy. For example, in thinking about the workforce of 2020, we need to decide if investment in primary and secondary schools be increased now, or if the focus should be on upskilling those already in the workforce.

The New Zealand workforce has become more educated. A rising proportion of young people are entering the workforce with tertiary qualifications, and there is a declining share of the workforce with no qualifications, down from 40.5 percent of the working age population in 1986 to just 19 percent in 2006. [2]

While New Zealand’s participation in tertiary education has risen significantly in recent years, with the highest ever level of enrolments in tertiary education, only half of those enrolling complete their qualifications. [3]  Furthermore, despite the trend of rising tertiary education participation, a substantial part of the adult population still has low levels of foundation skills (literacy, numeracy, language and general social skills), [4] and 11 percent of students leave school with few or no formal qualifications. There are significant social and economic  challenges for New Zealand if the long tail of educational underachievement persists into the future.

A question that is rarely raised, and remains unanswered, is “what proportion of the workforce needs to be skilled to deliver a step-change in economic performance?” Around 80 percent of the current workforce will still be in the workforce in 2020. This means it makes sense to continually try to develop and raise the skills of people currently in work.

Linking education and training to workforce needs

The pace of change will also be an issue for educators and trainers in ensuring people have the necessary skills for the changing scope of work, as well as the ability to be ongoing learners in a faster moving world. A coordinated approach is needed to make sure that skills development and use is aligned to the needs of industry and the economy.  There are already initiatives in some countries such as the United States for more corporate development programmes and corporate engagement with the tertiary sector, including industry training, to ensure that tertiary graduates have the skills necessary for working in particular sectors.

The level of investment and the time it takes to train the professionals needed in a knowledge economy is considerable. For example, it takes approximately 12 years to train a scientist. Consequently, we need to provide greater assistance to young people to ensure they make good choices in their initial tertiary education and that what they study is relevant to the needs of the future labour market. Equally important is the need for employers to establish good practices in the workplace to ensure that graduates and trainees can continue to build upon their formal training through the informal training that occurs in a work setting.

Workplace training and skills development

To ensure we remain competitive in a global environment we will also have to focus increasingly on skill development at work. An increasing proportion of jobs (both among the lower and higher skilled) will require continuous updating of knowledge and skills.

A gap in our current knowledge is the extent to which changes in employment arrangements and practices will affect access to ongoing training in the labour force. For example, if the strongest growth occurs in part-time and casual/temporary employment, there will be implications for life-long learning by workers.  Changing employment arrangements and a changing mix of people in the workforce will affect the methods of in-house training provided in workplaces.

Workplace training often tends to favour professional and managerial workers rather than those at the bottom of the ladder with few skills. Ensuring equal educational opportunities in the workplace will be required to more fully harness the range of technological change.  For instance, the growth in satellite communication and inventory control systems makes traditionally low skilled work in the warehousing and goods distribution a far more complex task than it used to be.

Non-standard work arrangements

The world of work will evolve rapidly as we move towards 2020 and beyond. Technological advances and globalisation are both changing the way the workplace is structured. The changing nature of labour supply (with more older workers, people with caregiving reponsibilities and persons with disabilities working) will create greater demand for less traditional and more flexible working arrangements.  Increasing numbers of employees, both highly skilled and low skilled, will have non-standard work arrangements.  The flipside of this is that there may be greater insecurity and uncertainty for the workforce, particularly among the lower skilled working in areas where they have less control.

Yet to a large extent, current policy settings governing work, the workforce and the workplace assume a traditional employment relationship, characterised as “full-time jobs of indefinite duration at a facility owned or rented by the employer”.

Shifts in organisational form and the use of non-standard work arrangements will alter the nature of the employer/employee relationship. However, there is increasing recognition on the part of employers of the importance of human capital to business success. How can employers value and retain workersof the future in this more volatile working environment?  For example, how will employers provide benefits that come with traditional employment relationships, such as workplace education and training, or safe and healthy workplaces?  With the greater mobility of a skilled workforce, how can firms retain and disseminate the knowledge generated by these workers once they move on?

Changing nature of work

The nature of jobs will continue to change, and, in an economy as open as New Zealand, it is difficult to say which industries, sectors and occupations are going to grow the most during the next 12 years. The Department’s sector and regional engagement and workplace productivity work programmes are both about ensuring that we are responsive, and continue to build our knowledge, around the changing nature of work.

Overseas analysis [5] points to increased demand for more highly skilled occupations (eg managers and professional occupations) and skills associated with “knowledge work” (eg cognitive skills such as abstract reasoning, problem-solving, communication and collaboration).  As jobs become less physically demanding and repetitive but more knowledge-intensive, personal traits such as communication skills and attitudes will become increasingly important.  

At the same time, demographic and social factors are likely to substantially increase the demand for lower skilled workers in service, personal care and retail. Education and vocational training systems will need to cater for the increasing demand from both sides of the skill spectrum.  Furthermore, as technologies emerge and change, and as working lives lengthen, arrangements, management styles, workplace cultures and training the workforce (of all skill types) will need to be adaptable and retrainable throughout their working lives.

New health and safety concerns

Emerging technologies and industries present new health and safety concerns.  While there are likely to be fewer physically demanding “blue collar” jobs, the continuing shift towards service-based work will mean that many jobs may become more mentally stressful. The changing composition of the workforce and the emergence of new organisational structures will also change the way we address health and safety issues. Future occupational health and safety systems will need to cater for emerging occupational health and safety risks and a greater diversity of workplaces and employment arrangements 

Health factors will become an increasingly imporant factor for many older workers in terms of their decisions about where and for how long they will keep working. The increased participation in work of people with disabilities and ill health is also an ongoing issue in terms of improving the access to quality work for many people especially as the workforce ages.

Changing values and aspirations

The role of work in peoples’ lives is likely to continue to evolve over the next 12 years. New population cohorts will enter the workforce with different values and aspirations around how they want to engage in work and the type of work they want. Recognising and valuing diversity in the workplace will also become more important, as we can be sure that the New Zealand workforce in 2020 will be more socially and demographically diverse than ever before.

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