“The size of our economy can grow as we add more people to it, and as we work for longer, but the holy grail of economic growth is productivity growth – doing more with less. Productivity growth is the key driver of per capita living standards over time.” Paul Krugman
Queensland’s productivity performance over the last decade has left a lot to be desired. Queensland labour productivity growth averaged 1.7% during the 1990s, but only averaged 1.1% during the first decade of the 2000s.
At present, Queensland is starting to see a cyclical improvement in productivity growth as the recent significant tranche of resources investment starts to pay dividends in the form of higher production and exports. These projections include a view that Queensland labour productivity growth will lift to average 1.8% per annum over the next five years.
An improved rate of productivity growth often goes hand in hand with skills development.
Having the skills to harness new technologies and techniques will be an important enabler of productivity for governments and businesses, with digital disruption (digital change) a key challenge for many sectors. This message is particularly true for manufacturing and engineering organisations. Manufacturing and engineering demands people have specialised skills such as welding, fitting and turning, toolmaking, electronics and electrical assembly, fibre glassing, Plastics injection moulding. The list of different materials and the skills required to fabricate products in engineering and manufacturing are almost endless so maintaining high levels of skills and adopting future skills quickly is paramount to the success of any engineering and manufacturing company.
Deloitte has recently mapped the expected impact of digital trends on different parts of the economy (Figure below). Sectors were mapped according to the expected size of the impact upon the sector from digital disruption to the imminence of the change. Those sectors in the top left quadrant of the figure below (short fuse, big bang) potentially face the biggest change in the short term, creating some difficult challenges but also opportunities for significant productivity improvement.
The impact of digital disruption on manufacturing and engineering will be a long fuse, small bang, but this doesn’t mean that all is fine in this sector. What it means is that digital disruption has yet to make an impact. The short fuse big bang sector of the figure below shows Information and communications technology (ICT), this will impact on all businesses in a massive way with manufacturing and engineering being no exception. We already have a plastic tag company here in Brisbane that employees two people, a Director and his Wife, that take the orders and set the plastic injection machines during the day and set them running over night. The injection equipment is monitored at home through an online portal to the equipment and when they arrive in the morning all the plastic tag batches are ready for packaging and delivery. ICT has made this possible and this type of remote manufacturing will only increase as technology improves.
So if, productivity growth is the key driver of per capita living standards over time and having the skills to harness new technologies and techniques is an important enabler of productivity for manufacturing and engineering, what are the federal and state governments doing to support these economic needs? Below outlines a few of the significant government assistance/funding opportunities for companies wanting to upskill their staff and increase their productivity.
The Industry Skills Fund
The Industry Skills Fund is a key element of the Australian Government’s strategy to boost business productivity and increase competitiveness across the economy. The fund provides training places and support services for industry.
A highly skilled workforce that is able to adapt to rapid technological change, structural change and new business opportunities is a priority for Australia. The fund will support business to upskill and train employees to meet these future challenges and take advantage of new business growth opportunities.
The fund prioritises Small and Medium Enterprises (SMEs), including micro businesses, and is delivered through the single business service, which streamlines access to essential information for all Australian businesses.
The fund assists industry to invest in training and support services, and to develop innovative training solutions.
As of 1 September 2015, businesses operating in or seeking to expand their operations into Northern Australia can receive additional support under the fund. The fund will focus on promoting indigenous participation and encourage business to think of the opportunities for expanding operations to and within Northern Australia.
The Australian Government has released the first ever White Paper on Developing Northern Australia. The White Paper is a vision to unlock the great potential and opportunities of the north.
Employer Training Incentives
The long standing Australian Apprenticeships Incentives Programme provides a number of incentives to assist employers who take on an Australian Apprentice, particularly where the Australian Apprenticeship is in a trade experiencing a skills shortage.
Eligibility for incentives under the Australian Apprenticeships Incentives Programme may be affected by the duration of the employment relationship you have with your current employee.
Apprenticeship Network providers eg; MEGT are contracted by the Australian Government to deliver free Australian Apprenticeships support services, which include providing information and assistance to employers, Australian Apprentices and other interested people, marketing and promoting Australian Apprenticeships and administering Australian Government incentive payments to employers and allowances for Australian Apprentices.
Higher Level Skills – Qld Only
The Higher Level Skills program supports the Queensland Government's Working Queensland jobs plan.
The program provides a government subsidy to support eligible individuals to access one subsidised training place in selected certificate IV and above qualifications, or priority skill sets.
The aim is to assist individuals to gain the higher level skills required to secure employment or career advancement in priority industries or to transition to university. Employers may also be able to access training to address workforce development needs.
Subsidies are provided for a select number of certificate IV, diploma and advanced diploma qualifications, and priority skill sets critical to productivity within the workplace.
Certificate 3 Guarantee - Qld
The Certificate 3 Guarantee supports the Queensland Government's Working Queensland jobs plan. The Certificate 3 Guarantee provides a government subsidy to support eligible individuals to complete their first post-school certificate III qualification. It also supports Queensland's Year 12 graduates to transition to employment by providing fee-free training in high priority qualifications.
The Certificate 3 Guarantee is targeted at certificate III qualifications because they are considered the entry-level qualification most often needed to gain employment in many industry sectors.
As you can see both state and federal government are putting their money into their strategic plans for the country. Queensland and national businesses have access to these funds and should consider these funding pools when planning their staff development needs.