Australia, relying on luck rather than training for innovation

4 February 2013

Australia faces being locked-in to its reliance on the resources sector unless businesses in other sectors of the economy make more effort to up-skill and train employees, according to a recent international Grant Thornton study.

The latest research from the Grant Thornton’s International Business Report (IBR) suggests that Australia is most affected in the world by the scarcity of talent, with more than two thirds of businesses finding it hard to source skilled workers. The fastest-moving sectors credited as major drivers of economic growth beyond the peak of the mining boom, such as high-tech and clean-tech, are reporting the most serious recruitment difficulties.

“As an unprecedentedly lengthy election campaign begins, both political parties will need to address the shortfall of skilled workers and how Australia will develop our capacity to compete in innovative sectors,” explained Grant Thornton’s Workforce consulting specialist, Rory Gregg.

The research also shows that 63% of businesses report a shortage of technical skills, and 70% are citing a lack of required qualifications as a major inhibitor to recruitment plans.

According to the study, businesses are now ready to invest in talent to fuel growth. However, with Australia almost doubling the global average (39%), it seems the ongoing dialogue between business, government and education institutions is not bearing fruit.

“In the afterglow of the release of the Asian Century Whitepaper, Australia’s vocal ambitions to move to a more high-tech, clean-tech and service-oriented economy will remain a distant reality if the country does not accelerate investment into the training and up-skilling of its workforce,” said Mr Gregg.

“These difficulties are directly impacting Australian businesses’ capacity to take up positions as industry front runners. To compete in these new and growing sectors, Australia needs to address the issue as a matter of priority.”

The recently released Understanding Productivity – Australia’s Choice Report developed by the McKell Institute at the University of Technology proposes collaboration among businesses together with research and education institutions is the key to successfulinnovation. It argued programs should not just focus on technical or scientific innovation, but also be directed at strengthening innovation management.

“People talk about R&D spend driving innovation, but the bottom-line is you need to have skilled people to deliver innovative developments. It always comes back to the quality of the people you have, now,” said Mr Gregg.
Mr Gregg urged businesses to get serious about retention of staff and look beyond current government funded programs and agreements such as the National Agreement for Skills and Workforce Development to fuel innovation and growth.

“Retention of highly skilled staff that will contribute to innovation through planning or execution should be an immediate priority. This may require targeted up-skilling of these staff to ensure they remain engaged and buy into the future growth plans of the business.”

According to Mr Gregg, if access to skilled labour does not improve during 2013, businesses will have no choice but to actively source technical and accredited skills in countries that have greater populations available – namely China and India.

“For business, this can be a positive strategy as their sourcing models may encourage collaboration, alternative ideas, and help work around local regulatory and taxation inhibitors. It will, however, require careful sourcing or partnership models to manage the intellectual risks.

“We are advising clients to pursue multiple strategies that source skills overseas, up skill existing employees and engage Government to increase its funding for skills training.

“Critically, businesses will need to look carefully at their growth strategies, they will need to prioritise activities and these will need to be aligned to their recruitment plans and access to skilled labour.”

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Emma Cooney
Public Relations Manager, Grant Thornton Australia
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Notes to editors
The Grant Thornton International Business Report (IBR) provides insight into the views and expectations of more than 12,500 businesses per year across 44 economies. This unique survey draws upon 21 years of trend data for most European participants and 10 years for many non-European economies. For more information, please visit:

Data collection
Data collection is managed by Grant Thornton International's core research partner -Experian. Questionnaires are translated into local languages with each participating country having the option to ask a small number of country specific questions in addition to the core questionnaire. Fieldwork is undertaken on a quarterly basis. The research is carried out primarily by telephone.

IBR is a survey of both listed and privately held businesses. The data for this release are drawn from interviews with more than 6,500 Chief Executive Officers, Managing Directors, Chairmen or other senior executives from all industry sectors conducted between August and December 2012.