Australian Jobs growth

Grattan Institute analysis poses strategic questions for the VET sector.

The Grattan Institute, a Melbourne-based think tank, has pulled together some valuable data about where jobs growth is occurring in Australia. The Institute’s CEO, John Daley, spoke about ‘Productivity and geography’ to a Productivity Commission conference in December last. His presentation was accompanied by a slide show that visually maps out his analysis.

Jobs growth, and economic activity, are fast shifting to capital city centres

The key message is that employment growth in service industries is accelerating. Between 2010 and 2016, around 450,000 jobs were created in education and health, 275,000 in business and other services, and another 150,000 in accommodation, food and recreation. By comparison, construction created around 100,000 jobs, as did wholesale, retail and logistics. Jobs were lost in agriculture, utilities and manufacturing, while mining contributed only 50,000 new jobs to the national total in the five year period.

Daley also shows that Australia’s big cities contribute the lion’s share of economic activity. Melbourne contributes 80 per cent of Victoria’s economic activity – the highest concentration of any state or territory. Brisbane is lowest at around 50 per cent, though if you include south-east Queensland the proportion lifts to around 65 per cent.

The shift of jobs growth to inner cities began taking off in 2008 as the economy turned ever more decisively to services. Daley also shows that small businesses are spread out across metropolitan areas, while large businesses are increasingly concentrated in inner cities.

Daley thinks a primary reason why the centres of big cities are now the engine rooms of jobs growth has much to do with quality communication opportunities. These days we frequently assume information and communications technology means distance counts for less than it used to. Not according to Daley. As he impishly says, ‘The first companies to limit remote working and insist on physical proximity between their staff were … technology companies.’

Implications for VET

The analysis has any number of ramifications for politics, industry policy, housing policy and infrastructure spending. It also has many implications for VET.

How do we balance the geography of where our students live with the geography of where jobs growth is occurring? How do we gear up to meet service industry skills requirements and still train in areas like agriculture, manufacturing and logistics which have slower jobs growth over a much larger geographical area? How do we adequately meet the skill needs of small businesses that are widely dispersed across metropolitan and regional areas?

We’ve pondered questions like these for a while. Answering them is becoming more pressing as jobs growth intensifies in inner cities and in service industries.