Victoria lags behind in tech workforce growth, risks AI challenges

The latest Victoria Digital Pulse report launched by ACS reveals that Victoria is trailing the rest of the nation in terms of tech workforce expansion. The annual snapshot of the state's ICT workforce found that despite 279,000 Victorians being employed in technology roles, marking a 2.8% rise from the previous year, this is significantly behind the national growth figure of 6.7%.

This lag in growth potentially threatens Victoria's position in the face of the Artificial Intelligence (AI) challenge. Projections suggest that nearly 4.5 million workers across Victoria will be substantially impacted by emerging technology, such as AI, directly affecting industries representing over half the state's economy. Despite the lacklustre tech workforce growth, Melbourne retains its position as a significant player on a global scale, as it is ranked among the top 30 global cities for technology.

This subpar growth pattern could result in significant monetary loss for Victorian businesses. Digital skills that are lagging behind the rest of the world are estimated to cost large businesses in Victoria $840 million per annum. Furthermore, Victoria needs to reskill approximately 20,000 people per year until 2030 to keep up with international competition.

According to Dr. Rod Dilnutt, ACS Victoria Chair, the report provides an opportunity for the state to reshape its approach towards technology education and application. He emphasised that "the latest Digital Pulse report highlights how technology is changing society and this year's Victorian snapshot shows we cannot afford to rest on our laurels."

In spite of these challenges, Victoria's technology sector remains resilient, contributing $34 billion to the state economy during the 2022 Fiscal Year. With 45,000 IT businesses headquartered in the state, there is potential for growth if the right steps are implemented. The report recommends strategies such as better utilisation of the existing workforce, the development of an AI adoption framework, modernising IT education, and fostering better cooperation between the private and government sectors.

The report also identifies other prospective challenges and opportunities posed by emerging technologies. By the end of the decade, it expects that half of Australian businesses will be using AI, data analytics and robotics. However, newer technologies such as Generative AI will necessitate businesses to work harder to keep up with the shifting skills and demands of their employees.

National statistics from the report indicate that the absence of suitable digital skills is costing Australian businesses $3.1 billion every year, a figure that could escalate to $16 billion by 2030. The pace of technology investment in Australia is anticipated to experience a sharp increase, from $171 billion in 2023 to an astounding $259 billion by 2030, a growth rate three times faster than overall business investment.