Digital boom to contribute $139 billion by 2020

Deloitte Access Economics Partner, John O’Mahony, about how people can get on board the digital boom

Introduction – Digital boom to contribute $139 billion by 2020

Ross Greenwood: Welcome back to work life money going right around Australia, here on the weekend. I got to say that one of the issues in regards to working trying to make certain that you get an income for life. Because do bear in mind, these days, especially generation Y and the so-called millennial’s, they can have many occupations during their lives. The reason for that is that technology is moving so quickly, much more quickly than what maybe you or I experienced when we were in our younger and more formative years.

In other words, you got to be able to change and adapt your skills quite rapidly. But the one thing that is absolutely known and necessary is that the digital economy, in other words, a way in which people interact with their phones, with their devices, with all of the information they’ve got at home, and the way in which information is disseminated is going to be the growth area, certainly, if not for the next 10 years, for the next 30-40 years.

The way in which it operates will change shape during that period of time and people will still have to adapt their skills. But there’s been a new report that’s been put out by the Australian Computer Society. Now to explain, the Australian Computer Society is the professional association for the Australia’s information and communication technology sector, the ICT sector. Over 20,000 ACS members work in business, education, government, and the community, and they’ve commissioned this piece of report. The partner for Deloitte Access Economics specializing in digital and the digital economy is John O’Mahony, who’s prepared this report for the Australian Computer Society and he’s online right now. Many thanks for your time, John.

Interview with John O’Mahony from Deloitte Access

John O’Mahony Good day Ross

Ross Greenwood: You’ve tried to put your arms around the digital economy as it is today. And then project forward what it might look like in the future. But the truth is now for many young people going through school, coming through work, even older workers who want to try and figure out where they might earn an income, they’ve got to try and embrace this, don’t they? Because the growth is going to be there for quite some time.

John O’Mahony Exactly. Australia is in the middle of a digital boom right now. In many ways, you don’t need a report to tell you that Ross. Just walk outside and you’ll see people on their iPhones, they’ll be catching Ubers, using GoCatch to catch taxis, they’ll be watching Netflix at home, they’ll be logging online to do their shopping and all that jazz.

With so much digital technology that’s around us, it’s no surprise that it’s having a big impact on our businesses and it’s changing the way we work as well.

Ross Greenwood: In regards to changing the way we work, we know that the digital economy promises a range of things. The ability to be more flexible in the workplace, the ability to bring down the walls in offices because everybody is connected, the ability for people to be able to more easily manage their children. There’s very practical things as well as all the big productivity improvements that occur in offices.

There’s one other aspect of this I think and that is, even though we know that we have greater productivity, we seem to be busier than ever before. In other words, this productivity is almost a double-edged sword.

John O’Mahony Yes, look, it can be. One of the things that can be missed when all those changes are happening is just how much the information technology sector and it’s jobs are growing as well. After this report, Australia’s Digital Pulse finds that over the last two years Australia has added 40,000 digital workers. That’s people who are making websites, engineering software, who are– a new job called, “Data science,” which is people who are going through lots of data and finding out what it means for the company.

Business analysts, there are an extra 40,000 of them in the last two years, we predict over the next five years there’s going to be twice that amount added an extra 80,000 jobs. Australia’s going to have a lot more IP geeks in the next few years than what it’s had so far, it’s a very fast-growing sector.

Ross Greenwood: Of course this means that people who have grown up their whole working life knowing that people generally succeed if they make something that is physical, or if they provide a service that is very tangible, in this case you’ve got to bend your mind a little bit, don’t you? Because a person who is dealing in data and trying to make things more efficient by understanding how the flow of information goes through an organization, how it’s shared in that organization, how you then share and create services for the public, it’s quite a different way of thinking about work.

John O’Mahony Exactly. Workers are being expected to be more productive overtime. And that requires a mix of skills. Yes, it’s the technical skills and, in this case, it’s IT, but in many other professions people are expected to bring a lot of technical skills as well. But alongside that, people will also need soft skills as well. Communication, teamwork, creative thinking, critical thinking, problem-solving, all those things as well. And workers will need to be able to do both of those two things if they want to get the really best jobs in the future.

Ross Greenwood: Then we go all the way back to university. Parents, grandparents, grand kids or kids going through university, it’s also making certain that that person is well prepared for life ahead because work is not going to be the same as what their parents experienced, and indeed, if technology moves against you, you could find yourself out of the workforce until you’re re-skilled, retrained, or find the next growth opportunity.

John O’Mahony Exactly. There’s too much new technology coming down the line for everybody to be familiar with it based on what they learnt at primary school, or what they learnt at university. A lot of the technologies we’re talking about, won’t have even been developed yet. All I have to do is to throw at some of your listeners artificial intelligence, or robotics, or self-driving cars.

There aren’t big workforces of people to develop these materials yet because, of course, a lot of the thinking hasn’t gone on. It means that people can’t just learn at universities now all of the answers they’re going to have to get involved with lifelong learning and, basically, expect further change as they go through their working life.

Ross Greenwood: The interesting side of this is that this embraces so many people from so many different walks of life. Because while we might think it could be accountants and workflow managers, people who might be in specific computer development applications. But it might even go to musicians, to artists, to filmmakers. Those people also have to embrace the digital technology because, ultimately, that might very well be the platform on which their art is actually created.

John O’Mahony Well, exactly. Now you told me right about that. We did that, we did a bit of work with the Australian Conservatorium a couple of years ago and the Chamber Orchestra there were now starting to use digital tools for sharing notes for practising their performances, other things like that. Classical music might seem like a world away from digital technology but you’re absolutely right, as these digital waves roll on, it’s going to affect more and more people.

Just think of the humble farm and a job like weeding, or rotating crops, there’s a lot more technology and IT that’s being used there as well like farmBots and other things. It does mean a big change across the whole economy.

Ross Greenwood: It’s just– yes, and you’re right, you can dream about these types of things. But as we know, the more you dream about the way technology could change a person’s life or improve a person’s life, the more likely it is that that tool ultimately will turn up even now. I mean even just giving farmers in remote areas the ability to get onto the Internet in a very active and even very fast way, means that that person can get health care already.

They can also start to trade the commodity that they’re growing on that farm, they can gain access to a range of different banking and also accounting services. While they’re sitting there, they don’t need to come to town as often as what they might have once. I mean this, again, has got to make that person more productive.

John O’Mahony It does, yes. Look, there are lots of opportunities. We wouldn’t say it was a two-way street, a two-way street to say that obviously though open markets and new technology can bring threat. We think overall that there are net benefits from this change. But it does mean that certain jobs and practices will be threatened. But what one thing the report that we released also does is it tries to quantify how digital technologies have lifted productivity and how that’s flowed through to living standards.

We did some economic modeling over the last decade of change, how digital technology use has increased, and we tried to take out all the other factors that you and your listeners will be very familiar with, that have affected living standards like the global financial crisis, changes in the budget, changes in the mining sector. We tried to say, “Well, what about digital, what’s it done?” And we found that over the last ten years Australians can thank digital technology, on average, for about a $5,000 annual increase in their living standards.

Now obviously, most people won’t see that money directly, but through better jobs, or better wages, or lower prices it’s having that positive impact. Overall, while there are some positives and negatives to it, overall we think it’s a benefit.

Ross Greenwood: John O’Mahony, the partner of Deloitte Access Economics specializing in the digital economy and, of course, doing that work for the Australian Computer Society. There’s no doubt, but again, just think about this from an employment point of view, from a productivity point of view and the way in which people will work in the future as compared with now. And, John, we appreciate your time so much on the program today.

John O’Mahony Wonderful, thank you, Ralph.

Ross Greenwood: When you retire, you don’t want to be worrying about your finances. What you want to do is live comfortably and really enjoy your retirement. Maybe travel overseas, help out the kids, even buy a new car. Talk to AustralianSuper today and make more of your retirement income. AustralianSuper will advise you on how you can turn your super into a regular income and keep your super growing at the same time.

 

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