An agile and collaborative education sector that works closely with industry is crucial to Australia’s success in the digital economy, according to an industry body.

A new report from Ai Group, Developing the Workforce for a Digital Future, has found that drastic change to the education system at school, vocational education and training (VET) and university levels is required.

It called for a stronger focus on digital and ICT literacy skills as well as an effort to improve basic skills across STEM fields.

CEO of Ai Group, Innes Willox, said businesses and educational institutes are struggling to respond to the pace of digital transformation.

“Businesses are becoming increasingly alert to the fact that their business model could be upturned overnight,” he said.

“Major technological advances are changing the nature of the link between technology and work.

“It is clear that this digital change is outpacing the capabilities of our education and training institutions.”


The report highlights the shortfalls of the current Australian school system when it comes to equipping students with digital literacy.

It pointed to recent findings from the Australian Council of Learned Academies which stated Australia is not improving its student uptake of STEM education at the same rate as other countries.

A drop in the proportion of year 12 students undertaking STEM subjects was said to be a contributing factor towards this.

At a primary school level, it was revealed that 30% of Australian Year 4 students were only achieving at a low level on the international benchmark for mathematics and science.

Increased professional development and industry partnerships were viewed by Ai Group as a way to deliver digital and ICT literacy skills.

School-industry STEM partnerships and school-based STEM initiatives were amongst the recommendations.

“Initiatives such as these need to be implemented to enable school students to prepare for the workforce with an increased emphasis on STEM skills.”


Although worked-based learning is at the core of VET, the report explained that the sector can still do more in this space.

With upskilling and reskilling set to become increasingly important, as workers attempt to stay relevant in the digital economy, the report suggests the VET sector can provide a space for this lifelong learning.

However, it explains “this will require a shift in the nature and level of skills that the VET sector will need to provide.”

This involves placing more emphasis on highly-skilled occupations in the service sector and a continual push for digital literacy.


Unlike the drop in year 12 students, it was found that the proportion of university students in STEM fields had increased from 2011-2016.

Despite increased participation in these fields, the report made clear that technical skills will soon be required across all industries.

“Regardless of discipline, graduates will need to be sophisticatedly technically proficient, with higher level cognitive skills in, for example, analytics, applications, network management, security and privacy,” the report said.

Much like the other sectors, closer industry collaboration was recommended as a way to better prepare students for future challenges.

“The current transforming economy, with a faster fusion of technologies evolving at an exponential pace, means that university graduates need to be work ready, preferably having experienced time in industry.

“The models of connection between industry and higher education providers will need to become even closer as change becomes quicker.

“Shared campus/business operations well established in some areas must become more widespread.”

Beyond the classroom

As stated earlier, upskilling and reskilling are expected to shape a culture of lifelong learning.

Ai Group suggests in the report that private companies, not just educational institutes, must shoulder some of the responsibility when it comes to training staff for the future.

“Within a broader digital skills strategy, employers must plan to upskill existing workers in order to take advantage of growth opportunities and adapt to the digital economy.

“By assessing their own capabilities and then implementing training, companies will develop employees who are more capable of taking control of their roles, need less supervision and are more engaged.”

From an employees’ perspective, it was also explained that skills only retained their value through continual development.