$25bn productivity opportunity hinges on closing Australia’s tech skills gap

• Digital technology now contributes $134 billion annually to Australia’s economy, underpinning over a million jobs
• Gaps in tech skills appear across the workforce, including in the C-suite, with almost half of business leaders reporting only basic digital capabilities
• Fixing this could result in a $25bn boost to national productivity, according to new report

Special Report: With productivity firmly on the political agenda, it’s Australia’s acute digital skills shortage that poses one of the biggest threats to our future growth.

According to the ACS Digital Pulse 2025 report, bridging this gap could unlock a $25 billion boost to national productivity.

Released last week under the theme ‘Today, meet tomorrow’, the report calls for immediate national action to address a digital skills gap holding back approximately 150,000 Australian enterprises from reaching their competitive potential.

This skills gap extends all the way to the C-suite of Australian business, with a survey of 300 Australian C-level executives and 1,200 workers on the use of technology in the workplace finding that almost half of business leaders reported only basic digital capabilities.

ACS Chief Executive Officer Josh Griggs stressed the urgency of reform, stating, “Digital skills are the foundation of Australia’s economic future. In the past, we have spoken about ‘tech skills’ being its own domain of expertise, however this year’s report has found the average Australian worker spends nearly three hours per day using digital skills, accounting for 39% of their working time.

“The digital skills gaps endemic in our workforce affects not only tech companies at the cutting edge, but vital sectors like healthcare, finance, agriculture, retail, and manufacturing.

“Upskilling our nation’s technology skills, up to and including the boardroom, will not only position Australia as a global tech leader but unlock billions in economic growth and enhance our national cyber resilience.”

Strategic investment support recommended:

• Scaleup support: Australian investors and founders should watch for increased government co-investment opportunities, particularly targeting startups and scaleups. Australian startups currently face a ‘valley of death’ when it comes to finding funding to grow their business beyond the startup phase, encouraging them to move outside of Australia. This in turn harms investment opportunities for Australian investors in the long term.

• AI and innovation incentives: Australian businesses trail in AI adoption, with the largest skill gap revealed to be in the utilisation of AI. More direct support from government into innovation and R&D, particularly in the field of AI, will be needed to help our nation close this gap. Currently, Australia lags behind other OECD countries when it comes to the share of GDP spent on R&D and, in FY23, 95% of innovation patents filed in Australia were developed by overseas businesses rather than local businesses.

• Cybersecurity support: With cybersecurity threats costing the Australian economy $63bn annually, a projected requirement of 54,000 additional cybersecurity professionals by 2030 highlights a sector with strong tailwinds. Currently there is a lack of entry-level roles in cyber, with most existing roles requiring experience in software development. This is a handbrake on its growth in our region. Relevant industry associations should encourage organisations to create more entry-level roles to support specialised career development in this field.

As the pace of global digital transformation accelerates, Australia faces a stark choice: proactively address digital skill gaps now or risk falling behind competitors.

“If we close these gaps, Australia stands to unlock billions in economic growth, improve cyber resilience, and position itself as a global tech leader,” Mr Griggs noted.

“Our focus must not be just on fixing today’s problems, but about creating a future-ready nation.”

This article was developed in collaboration with Australian Computer Society, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.