2012 AVETRA Conference
The Value and Voice of VET Research
for individuals, industry, community
and the nation
Aligning tertiary education with
the demand for skills and
qualifications in a changing world
Robin Shreeve
CEO, Skills Australia
12 April 2012
1
What is Skills Australia?
“Skills Australia will provide the Government with recommendations on
current and future skills needs (and) inform Australia’s workforce
development needs¹ …”
•
Expert independent Board with
expertise in industry, economics,
education and academia;
•
Provides independent advice to the
government on current, emerging
and future skills needs and workforce
development needs
•
Remit expanded in March 2009 to
look at full scope of labour market
and give advice on HE & VET
•
2011 Budget announcementsextended role as Australian
Workforce Development and
Productivity Agency. Responsible for
National Workforce Development
Fund – started early – 1 October
2011
Back row (L to R):
Dr John Edwards, Heather Ridout,
Keith Spence.
Middle row:
Paul Howes, Prof. Gerald Burke,
Peter Anderson, Ged Kearney.
Front row:
Marie Persson, Philip Bullock (Chair),
Dr Michael Keating AC.
Source:
Julia Gillard, Second Reading Speech – Skills Australia Bill 2008
(14 Feb 2008)
2
Advice Skills Australia has provided to Government
•
Foundations for the Future – June 2009
•
Australian Workforce Futures: a national
workforce development strategy – March 2010
•
Advice to Department of Immigration on
Skilled Occupation List for General Skilled
Migration program – February 2011
•
Skills for prosperity: a road map for vocational
education and training – May 2011
•
Energy efficiency in commercial and residential
buildings: Jobs and Skills Implications
– May 2011
•
2011 interim report on resources sector skill
needs – July 2011
•
Defence Industry Workforce Strategy
– January 2012
•
Scenario development - phase II of Australian
Workforce Futures
3
Benjamin Jowett (1817-1893)
Master of Balliol College, Oxford and Regius Professor of Greek
“Research! Research! A mere
excuse for idleness; it has never
achieved, and will never achieve
any results of the slightest value”
In conversation with Logan Pearsall Smith.
Reported in Smith's Unforgotten Years (1938) p.
169.
Abraham Flexner (1866-1959)
Foundation Head of Institute of Advanced Studies Princeton
"Intellectual inquiry,
not job training, [is]
the purpose of the
university.“
Universities English, American
and German (1930)
Professor Joseph Wright (1856 – 1930)
– a remarkable pathway
•
Professor of Comparative Philology at Oxford
University. Expert on dialect. J R R Tolkein was
one of his students.
•
Seventh son of a navvy, he started work aged
only 6 years old as a donkey boy, taking tools
from quarry-men to the local blacksmith to be
sharpened. Taught himself to read and write
aged 15 using the Bible and a “Pilgrim’s
Progress”
•
Attended evening classes at Mechanics Institute
•
in 1876, he had managed to save up £40 to
study for a term at Heidelberg University in
Germany. He found employment as a
Schoolmaster on his return to England.
•
He returned to Germany in 1882 where he
gained a PhD in Qualitative and Quantitative
Changes of the Indo-Germanic Vowel System in
Greek at the University of Heidelberg in 1885.
6
Why all the fuss about skills and qualifications?
•
Skill shortages - as the economy shifts to recovery and growth, concerns
are raised again about constraints due to skills shortages
•
Experience shortages – do employers prefer those with experience and is
there an issue with novice workers
•
Productivity - the positive growth in productivity earlier this decade has
flattened, and turned negative
•
Participation - Australia ranks only 10th out of 34 OECD countries on
workforce participation
•
Population - Ageing of the Baby Boomers, Migration and International
trends
•
Underemployment - there are 1.4 million Australians unemployed or
underemployed
•
Foundation Skills - currently 50% of the population has lower language,
literacy and numeracy levels than they need for their jobs
7
Australia – the challenge of prosperity
Glenn Stevens
Governor of Reserve
Bank of Australia
•
To put it in very simplified terms,
five years ago, a ship load of
Australian iron ore was worth
about the same as about 2,200
flat screen television sets
•
Today it is worth about 22,000
flat-screen TV sets – partly due
to TV prices falling but more due
to the price of iron ore rising by a
factor of six
8
Australia - Three Speed Economy
Output by selected industry sector
Source: ABS cat. no. 5204.0 and Treasury. Dr Ken Henry, Post Budget address to the Australian Business Economists ,
18 May 2010
9
Our three conceptual pillars in our response to aligning
skills, qualifications and the economy’s needs
Specialised
occupations
• Apply concept of specialised occupations those occupations with greatest risk of
market failure
Scenarios
• Develop, test and model multiple scenarios
to achieve flexible policy responses
Demand
Driven Funding
• Fund users rather than providers – but only
after you have sorted out quality and
regulation
10
Matching skills and jobs in a fluid labour market
Initial education or
training becomes less
relevant over time
45% workers change jobs every
three years
11
Planning for ‘specialised occupations’
•
We cannot plan for everything … we need to adopt a
targeted, focused approach
•
Skills Australia has found that the labour market is effective
in meeting skills needs but there are particular ‘specialised’
occupations where intervention is required
•
This planning framework forms the basis for Skills Australia’s
advice to government to identify longer term skills needs
that are of high value to the economy
12
Specialised occupations criteria
1. Long lead time – those skills which are highly specialised and require
extended learning and preparation time
– 4 years or more for HE courses; 3 years or more to achieve VET
qualification
2. High use – those skills which are deployed for the uses intended (that is,
there is a good occupational ‘fit’)
– There is more than 50% match between the training and the destination
occupation
3. Significant disruption – where the opportunity cost of the skills being in
short supply is high (e.g. registered nurse or doctor)
4. High information – where the quality of information about the occupation is
adequate
An occupation is considered ‘specialised’ if it meets at least two of the first
three criteria, as well as the fourth criterion
13
2011 Specialised Occupations List (SpOL)
includes:
• Construction Managers
• Engineering Managers
• Auditors, Company Secretaries and
Corporate Treasurers
• Air Transport Professionals
• Aircraft Maintenance Engineers
• Electronics Engineers
• Mining Engineers
• Veterinarians
• University Lecturers and Tutors
• Medical Imaging Professionals
• Optometrists and Orthoptists
• Speech Professionals and Audiologists
• Pharmacists
14
Australian example: shortage of engineers and
related employment skills
Factors driving demand for engineering skills
• Resources sector
• Expansion of Defence acquisitions
• National Broadband Network (NBN)
• Other infrastructure projects
Labour market supply of engineers
• Higher Education – A steady increase in domestic students for
engineering places at Bachelor level and above in universities
between 2001 and 2010 (DEEWR HE data, 2011)
• VET – The number of students in VET engineering and related
technologies total commencements between 2005 and 2010
increased by 21 per cent (141 471 to 171 354). The vast majority of
these commencements were at Certificate III level (NCVER, 2011)
• Skilled migration – Most engineering occupations are currently on
Skills Australia’s SOL
• Retention – in 2010, 58.2 per cent of engineering labour force were
employed in an engineering occupation
• Recruitment difficulty – employers seeking qualified and
experienced engineers often require five to ten years or more of
relevant industry experience
15
16
The challenge of forecasting – understanding
uncertainty through scenarios
•
•
•
Return on investment in skills takes many years and
therefore requires a long view
But projections into the future are inherently uncertain
– forecasting is difficult particularly beyond 1-3 years
Scenarios allow for alternative futures to be considered
in economic modelling
– Help manage uncertainty of the future
– Improve longer term decision making
•
Important – scenarios are not predictions
– Use scenarios to develop & test strategies, understand
risks & generate new ideas and possible responses
17
Approach to 2012 strategy
Australian Workforce
Futures
• 3 off-the-shelf scenarios
by Royal Dutch Shell
• Tailored to Australian
conditions
• Informed modelling but
focused on the scenario
most consistent with
government goals and
policies
•
•
•
•
2012 strategy
Progress since 2010
4 plausible scenarios
developed for Australia
in the global context
Inform economic
modelling
Focus on managing
uncertainty across
scenarios
18
- Modelling
Scenarios
-
Analysis
-
Strategy
Plausible
worlds
(but not
predicting
future!)
Projections
of demand &
supply side
implications
of the
scenarios
Analysing the
uncertainty,
commonality,
differences
and risks of
the scenarios
The policy
recommendations
balance
aspirational goals
and risks, after
assessing key
differences
between the
scenarios.
Each process informs the next
19
The key factors driving demand and supply
of skills for Australia to 2025
Social, demographic and cultural trends
Economic and financial trends and globalisation
Labour force, industrial and workplace trends
Science, technology and innovation
Governance and public policy
Sustainability (focus on water, energy, population)
20
Academy of Social Sciences in Australia - Forum
1.
Economic and financial trends and globalisation
– Dr David Gruen
2.
Social, demographic and cultural trends –
Professor Graeme Hugo
3.
Labour force, workplace and industrial trends –
Professor Sue Richardson
4.
Governance and public policy – Professor Glyn
Davis and Dr Michael Keating
5.
Science, technology and innovation – Professor
Anthony Arundel
6.
Sustainability (focus on water, energy,
population) – Dr Kerry Schott
The Scenarios
• Sustained
prosperity but a
two-speed
economy
• Risky world –
multiple shocks
1. The
Long
Boom
2. Smart
Recovery
4. Ring of
Fire
3. Terms of
Trade
Shock
• Uncertainty to
2015 with low
growth and
knowledgebased recovery
• Resource prices
fall, a more
balanced economy
22
1. The Long Boom
• There is a speedy recovery from the global financial
uncertainty of 2011-12. Asia is becoming the world centre of
gravity, and the rapidly urbanising populations of China and
India provide a continuing market for Australian resources.
Mining and construction thrive, bringing continued prosperity
to Australia.
• But the high Australian dollar impacts tourism, manufacturing
and international education sectors. Large employer and
traditionally low-skilled industries, including retail, do it
tough. Government introduces a sovereign wealth fund to
share prosperity more equally.
23
2. Smart Recovery
• Australia experiences a low-growth economy to 2014-15. The
European downturn is protracted and there is continuing
instability in global financial markets. Growth in the Chinese
and Indian economies slows, the demand for Australian
resources drops, and the terms of trade and Australian dollar
move lower.
• Global growth resumes from 2014-15, heralding better
growth for Australia. Our companies and government are
challenged to improve productivity and a knowledge-based
recovery follows, although the impact of technology means
that there are fewer opportunities for those with lower skills.
24
3. Terms of Trade Shock
• This scenario sees new global sources of mineral and energy
resources come on stream, leading to an oversupply of
commodities. Prices fall, Australia’s terms of trade decline and
the dollar loses value but resources export volumes are largely
maintained.
• Australia seizes the crisis as an opportunity to move to a
broad-based economy. We re-establish a viable manufacturing
sector and build strong and internationally competitive
businesses.
25
4. Ring of Fire
• Australia and the rest of the world lurch from one crisis to the
next. Recovery from the European downturn is slow. Natural
disasters and severe weather events occur on a regular basis,
damaging industry and costing human lives.
• Political unrest destabilises parts of Asia. There are ongoing
nuclear warfare threats and skirmishes over resources,
especially water security.
• Increased protectionism reduces trade between countries and
Australia too is protectionist
• In the midst of the doom and gloom, the lower Australian
dollar substantially improves the position of trade-exposed
industry sectors.
26
Next steps...
Consultations and submissions
(July – August 2012)
Education and training
implications of scenarios
NEW
WORKFORCE
DEVELOPMENT
STRATEGY 2012
Modelling, scenarios
and discussion paper
published
(June 2012)
Quantify scenarios
for modelling
27
Possible Futures: workforce growth to 2025
Projected total employment growth rates
Number of people in
Australian workforce in
2025 (based on three
scenarios)
Open Doors:
15.3 mill
Low Trust
13.7 mill
Globalisation:
Flags:
12.5 mill
Current:
11.3 mill
Source: Access Economics Pty Ltd for Skills Australia, Economic modelling of skills demand
(Oct 2009)
28
Qualifications and skill shortfall
THE THREE SCENARIOS
However, skilled
migration plays a
significant role in
supplementing the
supply of
qualifications, and if it
remains at current
levels, these deficits
may be made up
through Australia’s
skilled migrant intake
OPEN DOORS
By
2015
By
2025
LOW-TRUST
GLOBALISATION
FLAGS
Demand
770,000
Demand
646,000
Demand
540,000
Supply
533,000
Supply
524,000
Supply
506,000
BALANCE
-237,000
BALANCE
-122,000
BALANCE
-34,000
Demand
828,000
Demand
645,000
Demand
500,000
Supply
659,000
Supply
620,000
Supply
556,000
BALANCE
-25,000
BALANCE
+56,000
BALANCE
-169,000
Source: Access Economics Pty Ltd for Skills Australia, Economic modelling of skills demand
(Oct 2009)
29
Qualifications and skills demand
From 2010-2025
Numbers to be trained
at Cert III and higher
due to
• Demand for 12 million
qualifications
Replacement/Retirement
• Demand for nearly 7
million people with
qualifications at Certificate
III and above
Skills deepening
Employment growth
2.5 M
2.0 M
1.5 M
1.0 M
0.5 M
0.0 M
2015
2020
2025
• Demand by 2015 for
additional 2.3 million
workers with qualifications
at Certificate III and above
– but not all new jobs –
replacement and skills
deepening
Source: Access Economics Pty Ltd for Skills Australia, Economic modelling of skills demand
(Oct 2009)
30
30
Recent Trends in the Australian Labour Market
31
What are Australian Workforce Futures key findings?
•
The current capacity of our tertiary education system will need to
increase by 3% per annum, to deliver the qualifications and skills
Australia needs
•
Workforce participation needs to rise from 65% to 69% to provide
the workers and skills we need plus improve social inclusion.
Women (aged 25-34); men (aged 25-64); older Australians (55-64)
•
Numeracy and literacy are a major barrier to increased
participation and a national plan with targets and funding is needed
•
Enterprises need to make better use of the skills of their employees
•
Forecasting for all occupations is both impossible and impractical. Our
focus should be on ‘specialised occupations’ which we can and
should plan for. The 80/20 rule applies
32
Analysing the impact of demand-based funding in
HE on meeting Australia’s skills needs
The questions at the centre of
this project are about changes in
the supply of and demand for
specialised skills, indicators of
mismatch or disequilibrium in this
supply-demand nexus, the impact
that the moves toward demandled education funding have had
on that nexus, and the right time,
place and mechanism for
government intervention to
restore market balance.
33
Reforms underway in HE
34
More integrated tertiary sector
• Progression between education sectors is critical for skills
deepening, and should be as simple as possible
– Projected shortfall of 200,000 qualifications at Diploma and above by 2025
• Need to promote a “level playing” field between VET and Higher
Education
– to remove incentives for students to choose courses and institutions on the basis
of fee structures
– To equalise funding where universities and VET are operating in the same space
– As recommended by Bradley Review
– But avoiding a mandated “top-down” approach
• VET providers who meet certain quality criteria should have access
to Commonwealth supported higher education places for specialist
degrees with vocational emphasis
35
More integrated Tertiary Education Sector
•
One Ministerial Council – SCOTESE (Formerly MCTEE)
•
Intention of merging TEQSA and ASQA
•
More emphasis on pathways in AQF
•
Lower SES enrolment targets for HE an incentive for co-operation
with VET with its higher proportion of lower SES students
•
Structural Adjustment Funding for regional collaborative ventures to
extend participation
36
A more connected sector: some joint ventures
•
Shared campuses – e.g. Coffs Harbour (TAFE NSW North Coast Institute,
Southern Cross University, Coffs Harbour Senior College; Ourimbah (TAFE
NSW Hunter Institute, University of Newcastle)
•
Use of VET premises by HE providers – e.g. UNE Access Centres at
TAFE NSW - New England Institute campuses
•
Joint programs – e.g. TAFE NSW Riverina Institute with Charles Sturt
University; Deakin University with Sunraysia, East Gippsland and Chisholm
Institutes
•
Dual sector universities – e.g. RMIT; Swinburne; Victoria University,
Ballarat, Charles Darwin
•
Possibility of franchising arrangements – e.g. Macquarie University with
TAFE NSW Northern Sydney Institute?
37
Dual and mixed sector institutions
Australian Universities with RTOs
23
Non self accrediting mixed sector
(excluding TAFE Institutes, largely private providers)
61
TAFE Institutes approved for HE
(But includes TAFE SA/ TAFE NSW as single registrations)
12
Source: Gavin Moodie, Types of tertiary education institutions, description or prescription?
November 2010
38
Diploma and above (AQF 5 Plus) enrolments in a sample of TAFE Institutes
Institution
Total Students
Diploma and
above
Percentage at
Diploma AQF 5
and above
All TAFE Institutes
1,206,934
182,991
15.2%
Current
Degree
Offer
(16.2 with
Duals)
Canberra Institute
22,575
7,790
35%
Yes
Southbank Institute
25,641
8,441
33%
Yes
Central Institute
29,519
9,222
31%
Not yet
Metropolitan South
20,740
6,188
30%
Not yet
Holmesglenn Institute
39,530
9,366
24%
Yes
Sydney Institute
59,778
13,349
22%
Yes
Adelaide South
28,668
5,180
18%
Yes
North Coast
35,917
2,777
8%
Pending?
Polytechnic West
31,522
2,625
8%
Yes
The four above are the only ones with
more than 30%
39
Distribution of qualifications within occupations
University
32
9
19
30
71
36
VET
35
38
No tertiary qualification
22
73
24
3
48
49
36
36
13
12
64
60
29
28
5
9
68
25
4
Source: Derived from ABS Survey of Education and Employment, 2003
Source: A well-skilled Future, Richardson,S and Teece, R (NCVER, 2008)
40
Numbers of occupations by skill categories –
Tom Karmel (NCVER)
Skills Category
1996
2006
Academic (>50% Higher Degree)
2
3
Professional – uni (>85% Degree plus)
10
18
Professional – tertiary (>85% Diploma plus)
22
18
Lower Professional (>50% Diploma plus)
56
69
Skilled Vocational 1 (>50% Cert 3 to Diploma plus) 46
68
Skilled Vocational 2 (>50% Cert 3)
19
37
Other Vocational (Certificate)
11
3
Unskilled
231
191
Total
397
397
41
Student returns – VET and HE
42
Source: KPMG Econtech , Economic Modelling of Improved
Funding and Reform Arrangements for Universities (2010)
Which pathway for young people?
“......for males two paths stand out: Year 12 followed by
university study; and Year 12 followed by an apprenticeship.
Apprenticeships and traineeships score well for ‘satisfaction
with life’. For females, the best path is Year 12 followed by
university study, and this is true for those with a relatively low
academic orientation as well as those with a high academic
orientation”
Source: Tom Karmel and Shu-Hui Liu (2011), Which paths work for which young people?, LSAY, p. 13.
43
Female Students at Newer Universities
University
Female
Students
University
Female
Students
Australian Catholic University
73% Swinburne University of Technology
42%
University of Notre Dame
69% University of Ballarat
45%
Charles Darwin University
69% University of Canberra
56%
Charles Sturt University
60% University of South Australia
58%
Edith Cowan University
61% University of Technology, Sydney
50%
Queensland University of Technology
55% University of the Sunshine Coast
65%
Southern Cross University
63% Victoria University
55%
44
VET students get poor access to elite Universities
Type of University (Example)
Entry on basis of VET qualifications
Group of 8 (Melbourne)
2%
60’s and 70’s (Macquarie)
10%
Australian Technology Network (UTS)
14%
New Generation (UWS)
13%
Regional (Southern Cross)
9%
Dual Sector (Swinburne)
20%
Source: Gavin Moodie, unpublished research provided to Skills Australia
4545
VET students in “elite university courses”
Course
Total students
Vet students
Vet students %
Medicine
3348
18
0.5%
Dental Studies
676
37
5.5%
Veterinary Science
605
0
0%
Optical Studies
166
0
0%
Pharmacy
1311
1
0.1%
Nursing
11836
2619
22.1%
Law
8239
196
2.4%
Business and
management
19740
2486
12.6%
Source: Gavin Moodie, unpublished research provided to Skills Australia
4646
VET students discipline in areas in University
Discipline area
Entry on basis of VET Qualifications
Education
13.2%
Information Technology
12%
Management and Commerce
11.6%
Building and Architecture
11%
Society and Culture
7.1%
Food, hospitality and personal services
6.9%
Engineering and related technologies
6.1%
Physical Sciences
3.5%
Non award
1.5%
Mixed field
0.3%
Total
9%
Source: Gavin Moodie, unpublished research provided to Skills Australia
4747
(HIGHER EDUCATION INSTITUTIONS)
HAVE A GENIUS FOR MAKING
HIERARCHY OUT OF DIVERSITY
With apologies to Sir Howard Newby
– Former CEO of HEFCE
48
2012 Annual Conference – The Future of Work
Confirmed speakers:
Tony Jones (ABC’s Q&A)
Hugh Lauder (The Global Auction)
Lynda Gratton (The Shift)
49
Questions?
Thank you
50