Manufacturing Rebound Could Be Cut Short By Skills Shortage

After years of decline, Australia’s manufacturing industry is finally recovering – adding almost 50,000 jobs in the last year, one of the best job-creation records of any sector in the whole economy. But that recovery could be cut short by growing shortages of skilled workers, according to a new report on vocational training in manufacturing.

The new report from the Centre for Future Work identifies key factors behind the rapid emergence of skills shortages in manufacturing, including:

  • The sector’s ageing workforce, creating a looming demographic transition for skilled worker
  • The highly specific nature of manufacturing skills (across sectors and occupations), creating difficulty for workers moving from between shrinking sectors to growing sectors
  • The need for new skills and ongoing training as companies adopt advanced manufacturing techniques and new digital technologies.

“Manufacturing is again making a positive contribution to Australia’s economic progress after over a decade of decline. We don’t want to squander this potential,” said Dr. Jim Stanford, Director of the Centre for Future Work.

“If Australia doesn’t get its act together on vocational training, this will be a wasted opportunity for manufacturing.

“Recent experiments with market-based vocational training have been a waste, they have damaged confidence in the skills system among both potential students and employers.

“Stable, well-funded, high-quality public institutions must be the anchors of any successful VET system.

“Public institutions are the only ones with the resources, the connections, and the stability to provide manufacturers with a steady supply of world-class skilled workers.

“No sector feels the pain of the failure of vocational training more than manufacturing, precisely because advanced skills are so essential for the success of advanced manufacturing techniques.

“Manufacturing stakeholders need to work together to strengthen vocational education and training.”

Key principles for rebuilding vocational education in manufacturing, discussed in the report, include:

  • A greater reliance on courses and apprenticeships through public-sector TAFE (rather than private providers)
  • Phased-in retirement programs to allow senior workers to pass on their skills to new apprentices
  • Inclusion of provisions guaranteeing access to further training in industry awards and enterprise agreements.

The report was co-authored by Dr. Jim Stanford and Dr. Tanya Carney and prepared for the Second Annual National Manufacturing Summit at Parliament House on 26 June 2018.

The National Manufacturing Summit engages leading representatives from all parts of Australian manufacturing: businesses, peak bodies, unions, universities, the financial sector, suppliers and government. The growing problem of skills shortages is a priority focus for this year’s Summit.

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