The aim of this report is not just to outline the current, emerging and future workforce skills needs, but also outline how the NSC approaches that task.

That approach includes both not just a traditional occupational-based lens, but also a skills-based lens using the Australian Skills Classification (ASC). In other words, what are the skills that sit within the occupations that are likely to grow, and what does that imply for the portfolio of skills the economy might need. Thinking about the portfolio of skills an economy might need provides a practical way to mitigate the risks involved in forecasting the outlook for hundreds of individual occupations.

It’s important to acknowledge, however, we cannot be driven by data alone. Data can be noisy, and different sets of data may conflict.

The Treasury noted in the 2020-21 Budget: ‘The Government’s macroeconomic forecasts are prepared using a range of modelling techniques including macroeconomic models, spreadsheet analysis and accounting frameworks. These are augmented by survey data, business liaison, professional opinion and judgment.’

Similarly, the NSC’s analysis of skills shortages makes use of survey data, business liaison and judgement, as well as forecasts and projections.

And although we can bring a strong data lens to the question of skills shortages and the economy’s current, future and emerging workforce skills needs, data cannot, of itself, resolve all the economy’s skills needs or shortages.

Indeed, as the Productivity Commission noted in its review of the National Agreement for Skills and Workforce Development, data from the predecessors to the National Skills Commission ‘suggest highly persistent skill shortages in a range of occupations’ ¹⁰⁸.

There is a range of factors, beyond the provision of formal training, that might result in skills shortages and that might see those persist ¹⁰⁹.

Some examples include:

• Employers may want staff who are job-ready, with a mix of the right personal skills and on-the-job experience, thing that are difficult to provide through formal training alone.
• Skill mismatches may occur geographically, with a mismatch between where those seeking work are located and the work itself.
• An employer might need a highly technical or specialised skill which is emerging and might not yet be reflected in the training system.
• There may be mismatches between the preferences of employers and potential employees.

These highlight the importance of flexibility in labour markets, in labour mobility, in jobs themselves and in the training system – as well as the importance of the insights offered by the NSC – if we are to effectively prepare our workforce for the future and respond to current skills shortages and mismatches.

The final conclusion to impart is that the key – especially when it comes to looking forward – isn’t a rigid focus on a specific forecast or number, but a sense of what the big picture dynamics at play are.

It’s by understanding these bigger picture dynamics, and by focussing on the portfolio of skills the economy might need in response to them, that will best enable us to assess the skills needs of today, and tomorrow.