South Australia Economy – Unemployment Down, But Beware the Train Coming Down the Track
The Deloitte Australia CFO sentiment survey recently published is positive.
CFOs are confident that the Global economy will continue to pick up and Australia will benefit (‘CFO Survey Edition 3’ Deloitte 2017).
Twenty-five per cent of CFOs are more optimistic about the immediate future than they were 6-months ago. It’s not all plain sailing though, as there are concerns about the level of debt in China and the high rate of house price growth at home together with lower wage growth.
The positive sentiment is echoed in the South Australia job numbers with unemployment recently falling to 6.6 per cent (see ‘The Advertiser’ 20 July 2017). There are worries though, about the closure of the Holden plant in October and knock on impacts.
An interesting statistic from the CEO survey is:
Fifty-six per cent of CFOs believe their headcount will be lower and staff will be re-aligned to delivering real-time predictive insights.
One of the reasons for this figure is the level of digital disruption that is forecast to take place; involving new ways of working due to technology. Basic tasks in finance are being automated and there’s plenty of evidence to say that this trend will accelerate (for a really compelling description of the far-reaching implications of automation on the future of work read New York Times best seller ‘The Rise of the Robots’ by Martin Ford).
This backs up the view expressed in our previous blogs where we said that, in finance, those that succeed will need to ‘add value’ over and above traditional job descriptions (see ’Adelaide Accountants: The Future of Work’).
More disturbing are medium and long term predictions about jobs in the general economy.
The Australian Industrial Transformation Institute at Flinders University released a report in March 2017 saying that two in five South Australian jobs would be replaced by robots in the next 10-years. Sectors impacted will include manufacturing, transport and retail.
Jobs at most risk include: bookkeepers, debt collectors, bank workers, switchboard operators, payroll clerks, telemarketers, accounting clerks and checkout operators. (Source ‘Automation Nation – a Workless Future?’ Flinders University).
Flinders University professor, John Spoehr said that:
‘Our industry structure in South Australia makes us a bit more vulnerable to automation than other states, because of the types of occupation we have and dominance of mass manufacturing.’
At present Australia ranks 9th in the number of robots per manufacturing job but will need to speed up their deployment. The worst possible scenario would be for jobs to be lost to organisations using automation based overseas. Professor Spoehr is of the view that we need to make a lot of progress in this whole area as otherwise ‘we have a big train coming down the track – called automation and robotics – and we need to move quickly.’ (See YouTube ‘John Spoehr: Prospects for the South Australian economy’).
Internationally, the deployment of robots and artificial intelligence is at a tipping point. For example, a recent report in the ‘Financial Times’ on 19th July 2017 discusses the possible devastating impact of automation on low-paid clothing manufacturing jobs in South Asia. Walmart is starting to automate the production of jeans at home and is turning its attention to T-shirts in 2018.
We are of the view that the overall result of automation will be to change the nature of many of the roles that we currently do. However, people will need to be flexible and prepared to learn new skills – and develop their knowledge about the technologies that are beginning to make a bigger and bigger impact.