Chapter 1 Introduction

State of Australia’s Skills 2021: now and into the future

Chapter 1 Introduction

This report examines the current, emerging and future skills needs of the Australian labour market.

It also examines how well matched are the broad supply and demand of skills across the economy.

That said, there are always gaps between the skills employers need and those that workers possess. The NSC’s role is to help identify those gaps.

The report provides layers of intelligence from an industry, occupation and task lens on the skills needs of the economy, now and in the future.

The analysis starts with more traditional labour market insights and builds to provide new skills insights using innovative data science techniques. The result is a rich and complex blend of analysis that paves the way for better matching labour market demand and supply, and building the human capital needed for Australia’s economic prosperity.

Labour market analysis has traditionally focused on occupations as the key unit of analysis. This remains an important and useful lens. But it doesn’t tell us much about what lies within ‘occupations’. It doesn’t reveal the tasks employers need to be done. It doesn’t reveal the skills workers use to achieve those tasks.

A fundamental innovation in the NSC’s work is that it provides much more detailed understanding of the labour market than has been available until now. It puts a focus on skills, alongside the more traditional analysis of the changing mix of occupations.

The NSC applies this skills focus both to analysing the present state of the labour market and in forecasting what lies ahead. Better knowledge of skills gaps will help governments, trainers, educators, employers and workers find ways to bridge those gaps. This will help people get better jobs. They can better identify which jobs need the skills they have, and the training they could do to gain the skills that employers need.

The Australian Skills Classification (ASC) is one of the NSC’s new analytical tools. It is the means by which a traditional occupation perspective on the labour market is expanded and deepened to bring a focus on skills. This chapter gives a detailed discussion of the ASC, then briefly outlines the other main analytical tools used by the NSC. Other tools and techniques are discussed in more detail later in the report.