Nearly 70 per cent of ICT professionals' occupations are in shortage around Australia, according to a new reporting warning the nation faces a skills challenge not seen for six decades.

The first annual Jobs and Skills Report, Towards A National Jobs and Skills Roadmap, released this week, outlines the “very significant challenges” Australia is facing in terms of skills shortages as digital literacy gaps threaten the country’s ability to embrace the opportunities emerging technologies provide.

Acting Jobs and Skills Australia Commissioner Professor Peter Dawkins said Australia is facing a skills challenge unlike anything it has seen since the 1960s.

“A focused and coordinated effort is required to ensure Australians are equipped with the knowledge, skills and capabilities needed for today and tomorrow,” Dawkins said in the report’s foreword.

Jobs and Skills Australia was established in November last year by the new Labor government, and made permanent in August.

More than a third (36 per cent) of all occupations assessed are in national shortage, the report found, with tech skills and jobs facing particular shortages while demand is only set to increase.

Professional, scientific and technical services jobs are projected to grow by 116,900 people by 2028, and by 233,600 workers by 2033.

The second largest occupation within this subset – software engineers – has been in shortage since 2021 which the report said “represents a tangible risk to Australia’s ability to compete in a global digital world”.

Further exacerbating the problem is a significant gender imbalance in software engineering in Australia, with 85 per cent of workers in the profession being men.

Digital transformation was labelled as a “megatrend” that will shape Australia’s future workforce and economy.

Developments like digitisation, automation and the emergence of artificial intelligence “open up significant productivity enhancing opportunities, and bring with it a critical skills agenda”, the report found.

But Australia needs to uplift its workforce’s expert digital skills and digital literacy if it is to embrace these opportunities.

“The entire Australian workforce will need to be digitally literate and digital literacy has emerged as a foundation skill,” the report said.

“To close these skills gaps, the education and training systems will need to both deliver new skills and adapt in how they deliver them.”

The need for tech skills isn’t specific to tech roles, with the demand for digital skills mostly coming from outside these traditional roles.

Last year, five out of 20 occupations with the highest numbers of job listings requesting digital and data skills were not data and digital occupations.

Jobs where people tend to spend more than half their time using specific data and digital skills are expected to grow at twice the rate than other occupations.

Jobs and Skills Australia called for a comprehensive reform agenda focusing on education to address these severe skills shortages.

The VET sector will be especially important, it found, with “job roles requiring applied learning and practical skills continue to be in demand and in persistent shortage across Australia”.

The planned National Skills Agreement, which will embed a new model of shared national control of the VET sector to support collaborative and evidence-driven delivery of education and training in response to skills needs, is also important, the report found.

And the VET sector needs to be better connected with higher education, and complemented by migration system reforms with a new data-driven approach to identifying the skills needed.