Digital skills are increasingly important in today’s economy. Growth in new technologies is changing the way businesses are run and the way tasks within jobs are undertaken. As discussed earlier, digital and data skills dominate the fastest growing emerging skills and can act as gateway for transitions between jobs.

The importance of digital skills is recognised by industry. In their 2019 skills forecasts, Australia’s industry reference committees ranked a series of 12 generic skill categories, in priority order. ‘Technology use and application’ skills received an average ranking of fourth across all skills forecasts. Digital skills were also identified by around half of the industries that reported on priority skills ⁶². The ASC has shown that almost all jobs require the use of at least one technology tool.

This section compares demand for digital skills between Australia and other countries. This can help us to develop an understanding of how the digital engagement of Australian industry compares internationally, where Australia’s skills gaps might be, where skilled talent may be lost, and where industry growth opportunities and future skills demand may be.

Digital skills proficiency is important to the economy on multiple levels. It can ensure success for people in the labour market, enable transitions between jobs and open new opportunities for Australia to lead in the development of digital technologies into the future. The analysis in this section suggests that while Australia recognises the need for specific digital skills, further effort may be required to build base digital skills proficiency at all skill levels, not just the higher skill levels.

Defining digital skills – using a common taxonomy across countries

The ASC provides the common language to define skills in Australia. The term ‘digital engagement’ is used in the ASC to refer to the ability to identify and use technology (including hardware and software) confidently, creatively and critically. The ASC provides for all occupations a measure and description of the level of competency required
for ‘digital engagement’ and a list of common technology tools that are likely to be used. The ASC also identifies ‘technology tools’ that are highly specialised and occupation-specific.

In this section, there are two skill types that align with the rationale behind the ASC of separating out digital skills required for most jobs and digital skills required for specific jobs.

Baseline digital skills – are digital literacy skills requested by employers for most jobs. They include skills in office suite software (word processing, spreadsheet, and presentation software), enterprise resource planning and project management software.

Specific digital skills – are digital skills required for more technical jobs, including skills in data analysis, digital design and computer networking.

The seven specific digital skill categories outlined in Figure 66 have been used to compare skills across international data ⁶³. To understand the spread of digital skills across the labour market, differences in demand for digital skills inside and outside the IT sector are considered. Finally, to get a better understanding of the digital skills driving change in the labour market, cutting edge skills are identified. These are defined as those with strong historical growth (of more than 150%) between 2013 and 2020 ⁶⁴. 

Figure 66: Specific digital skill categories

Using big data techniques, this analysis tracks digital skills sought by employers from job advertisements, the roles that require them, and the salary benefit associated with them. This creates a picture of the international digital skills market. Comparing Australia’s results with those from Canada, New Zealand, Singapore and the United States provides a measure of how Australia is faring in the international digital skills market. All these countries have similar economies but are at different stages of developing their IT sectors.

As shown in Figure 67, the proportion of Australian job advertisements requesting digital skills, both baseline and specific digital skills, remained relatively stable – between 26% and 33% over the period of the study. Australia had the second lowest overall observed demand for digital skills, with the downward trend from 2018 to 2020 in contrast to most other countries. Of the five countries, Singapore showed the strongest growth in demand, with a constant increase from 41% to 55%, with a noticeable upward trend from 2019.

Figure 67: Demand for digital skills, 2013 to 2020

When Australian employers recruit for digital skills, they tend to be looking for technical skills. Figure 68 breaks job listings mentioning digital skills across the specific and baseline skill categories. While the demand for baseline skills flattens out and then decreases over time, the demand for specific digital skills slowly increases over time. This trend intensified in 2020.

It is difficult to know why the demand for baseline digital skills in Australia is the lowest among the five countries. On one hand it could mean Australian employers are slow to recognise the need for baseline skills for a range of occupations in the labour market. On the other, it is possible Australia’s low figures for baseline digital skills reflect cultural differences in the type of information employers choose to include in job advertisements, rather than actual differences in demand. It may be that basic digital skills have become so ubiquitous they are now assumed job requirements and are often not explicitly stated. This is a limitation of web-scraped data that must be balanced against its richness and timeliness.

Figure 68: Demand for specific and baseline digital skills in Australia 2013 to 2020 as a percentage of job advertisements mentioning digital skills

In Australia the demand for specific digital skills (the share of job advertisements referencing these skills) is consistently high and comparable to other countries for each of the digital skill categories. Among job advertisement postings requiring digital skills, specific digital skills relating to software and programming have the highest demand across all five countries, ranging from 49% in Singapore to 37% in Canada. In Australia, the demand for software and programming is 46%, computer and networking support 17%, data analysis and digital design and marketing 15%.

When comparing demand for digital skills in IT sector occupations compared with non IT occupations, the trends are as expected. In the IT sector, the top three skills advertised are software development principles, SQL databases and programming and system design and implementation. These are the top three skills in all countries, although not necessarily in that order.

Looking outside of the IT sector, the top skills are unsurprisingly less technical. Here, office suite, enterprise resource planning and social media skills top the list of digital skills in demand.

That is not to say that the suites of skills requested for each type of occupation are separate and distinct. There are digital skills that are commonly requested across sectors, including office suite, system design and implementation, and even, in some countries, software development principles.

In Australia, the highest proportion of job postings requesting digital skills is for software and application programmers and computer network professionals, comprising over 16% of all job ads. After these, many occupations outside the IT sector are represented – including sales, accountants, and consulting and marketing roles. As mentioned above, up until 2020, jobs in the non-IT sector have shown the most growth in demand for digital skills.

The findings were similar in other countries with both IT and non-IT sector occupations among the top occupations requesting digital skills. In other countries, IT sector occupations topping the list were software engineers and designers, software developers and web and multimedia developers. The top non-IT sector occupations that requested digital skills were sales, administrative, accounting, and consulting roles.

When looking at employer demand for digital skills based on skill level, the trends indicate most jobs requiring digital skills are highly skilled jobs, and this was true across the five countries ⁶⁵. Figure 69 shows Australia has the highest share of this category among the five countries at 69%. One possible explanation for this is Australia’s higher recent growth in demand for specific digital skills and Australian businesses at the higher end of the labour market being more aware of the competitive advantage that could be gained from having more specialised technical IT skills. It may also be this trend reflects requirements within more highly skilled jobs to manage, manipulate and analyse more complex and larger volumes of data and information, which is increasingly done with digital tools.

Figure 69: Composition of jobs requiring digital skills, by job skill level

In most of the countries in this study, digital skills were associated with higher salaries when compared with jobs that required no digital skills ⁶⁶. As Figure 70 shows, in Canada and New Zealand, the requirement for digital skills is worth approximately $5,000 USD per annum, in Singapore it is around $3,500 USD and in the US it is worth almost an additional $7,000 USD per annum. Alongside the US, in the data set upon which this analysis is based, Australia has relatively high salaries, evident also in relation to digital skills. That said, the difference in Australia between jobs that do not require digital skills (an average salary in this data set of $67,000 USD per annum) and those that do (an average of $68,000 USD per annum) is minimal.

In all five countries there is also a bigger wage differential between jobs requiring only baseline digital skills, and those requiring specific digital skills from one of the six categories (listed in Figure 66). In Canada the difference is $7,000 USD per year, in Singapore $12,000 USD, in Australia more than $13,000 USD. The difference is the most in the US and New Zealand, where the requirement for specific digital skills is worth around $20,000 USD per year.

Figure 70: Maximum salary offered in job advertisements

People considering their employment options often need to make complicated trade-offs between current possibilities, long term prospects and salary considerations. While the data analysis category is associated with the highest advertised salary of $99,579 USD per year on average across all five countries, its share of digital demand in the marketplace is 15% which makes it a relatively niche skill. By contrast, software and programming accounts for 46% of digital demand in the market, which suggests a skill of wider appeal, albeit with a slightly smaller income at $98,937 USD per year on average in the five countries.

The demand for specific digital skills increases and decreases faster than other skills in the labour market. This is driven by the pace of innovation in the IT sector and the increasing requirement for all businesses to adopt new technologies, update systems, and digitise.

To focus on this phenomenon, the NSC identified a group of cutting-edge skills which have grown by over 150% between 2013 and 2020. These skills are growing quickly, but from a low base. Table 21 compares the 10 fastest growing cutting edge digital skills in Australia and the US. The results are quite similar in each country.

Table 21: Demand for cutting edge skills in Australia and the US

Sources: Burning Glass Technologies data, 2013 to 2020, NSC analysis

Despite considerable international consistency, time series analysis reveals some differences in the demand of cutting-edge skills across countries. Figures 71, 72 and 73 show a similar pattern of demand across Australia and the US for skills in data visualisation, IT automation, machine learning, artificial intelligence and the internet of things; but US job advertisements mention cyber security at twice the rate of those in Australia. The share of job advertisements demanding for cutting edge skills in Singapore outstrips those of the US and Australia, particularly for cyber security.

International differences also become apparent when looking at the interaction between cutting edge skills and specific occupations. For example, employers in Australia and New Zealand are more than three times more likely to seek data visualisation skills when recruiting actuaries (15% and 20% respectively) than those in Singapore, the US or Canada.

Examining skills that are emerging or growing rapidly in other economies can also provide a guide to potential developments in the Australian labour market.

Figure 71: Demand for cutting edge skills in Australia

Figure 72: Demand for cutting edge skills in US