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What are the impacts of Automation on the skills required in VET?

March 23, 2021

The effects and future effects of automation and Artificial Intelligence on VET will be highly impactful. With skill demand and supply changes, a stronger focus on digital skills and evolving education requirements, automation is a topic that needs to be discussed.

Digital skills

What are digital skills?

NCVER defines digital skills as a combination of five areas:

  • digital knowledge (theoretical comprehension and understanding)
  • cognitive knowhow (involving the use of logical, intuitive, innovative and creative
    thinking in the digital space)
  • practical knowhow (including the use of digital tools such as hardware, software, information and security systems)
  • competence (ability to learn, adapt and apply digital knowledge in a new setting)
  • ‘digital’ attitude (values and beliefs)
How do digital skills currently fit into VET?

Research shows the Australian VET sector needs to prioritise training learners to be digitally skilled workers, across all industries[1]. According to NCVER, the top five technologies with the most impact on skill requirements are:

  • Mobile
  • Cloud
  • Automation
  • Big data
  • The internet of things.
VET digital skills NCVER
NCVER Survey quote[1]
In training packages

NCVER found that within the training packages they analysed, units of competency were designed to develop digital skills to an extent. However, the majority of the units addressing digital skills tended to be electives rather than core units, showing a lack of consensus and perception of digital skills being ‘essential skills’. Additionally, many human resources, skills and training decision-makers believe VET training packages and industry qualifications aren’t current enough to meet industry skill requirements, and aren’t satisfied with the digital skills of VET graduates.

Employers and skill needs

On the other hand, many employers don’t specifically mention digital skills in job vacancy listings, which doesn’t reflect the economy rapidly entering the digital age. This raises questions about the ability of employers to articulate their specific skills needs, the expected level of application and the lack of a broad appreciation of the emerging digital economy and environment. With predictions that workers will be required to master not only specific tools in specific contexts, but also higher levels of overall digital competency, employers need to work together with VET to better define digital skills needs in training packages for the future of work.

VET digital skills gap NCVER
Digital skills gap[1]
Australia is under competitive pressure to adopt new technologies in the workplace, requiring the development of appropriate digital skills

Globally, the focus on a digital workforce has increased significantly and rapidly for the past decade, and has been accelerated even further due to the COVID-19 pandemic. NCVER has found that with Australia’s ongoing lack of appropriately trained VET graduates, a skills supply shortage will occur which will likely undermine the transition to a digital economy.

VET NCVER domains of digital skills
Different domains of digital skills

With a slow transition to embracing the widespread adoption of digital technologies across all industries and occupational levels, this could mean Australia falls behind in becoming a mature digital society. The suggestion is to reassess how digital skills are defined and treated in training packages, to not only give employers more confidence in the training system’s ability to successfully develop digital skills, but also establish a digital culture where people are competent, comfortable, confident and safe in their daily digital use.

Automation is changing skills needs

In addition to the importance of adequately training digital skills, a greater awareness of and capability to understand and use automation, specifically artificial intelligence, is needed. McKinsey has found that AI technologies may help the transition to better-quality jobs and increase the skills demand for creativity, leadership, communication skills, interaction with digital devices and other skills that aren’t affected by automation[2]. These are increasingly becoming the top skills sought by employers[3], and should become more focused on rather than skills which are highly susceptible to automation, such as courses like entry-grade engineering[2]. According to Cedefop, automation and AI transforms jobs, and will also require education and training to offer skills and competencies that teach learners and workers how to ‘cooperate’ with machines[4].

Almost all workers will need to upskill or retrain throughout their careers

Although the disrupted economy is likely to adjust and stabilise over the next decade, it’s predicted that 50-80% of displaced workers will need to retrain and transition to new occupations to find work[2]. Researchers at NCVER’s 2020 ‘No Frills’ event also discussed this topic[5].

impact of automation on jobs Australia
Impact of automation on jobs[2]

skills evolution Australian workforce
Skills evolution[2]

How can automation help the VET sector and the Australian economy?

For the VET sector, the automation opportunity will lead to gains in growth, income and GDP. According to research from the University of Adelaide, countries that invest in research and development to take advantage of automation create global economic advantage for their industries[4]. Automation will not only impact industry in this way, but also in education and training. AI can be used to improve personalised learning solutions and open education resources. It can also monitor learning difficulties, identify early warning signs of possible student failure, and assist with remote assessment[5].

the automation opportunity Australia VET sector
The automation opportunity[2]

For the Future of VET in Australia

It’s imperative that VET institutes and universities equip graduates with skills that meet or exceed employer expectations for an increasingly digitally-charged workforce. These skills should also be able to be further developed and built upon as industries change. To avoid a supply-demand mismatch, automation and AI should be embraced in education and training. After all, by 2030 people who are currently students could account for about a third of Australia’s workforce.


  1. NCVER, Skilling the Australian workforce for the digital economy
  2. McKinsey, Australia's automation opportunity: Reigniting productivity and inclusive income growth
  3. Artificial or human intelligence?
  4. The Impact of AI on the Future of Work and Workers PDF
  5. Vocational Voices podcast
  6. Employer Recruitment Insights, Australian Government Labour Market Information Portal

If your RTO is ready to accelerate business growth in 2021, find out how aXcelerate can help here, or request a demo here.

Want to know more about the future of VET? Check out these articles:

Learn more about the Australian Government's new action plan for artificial intelligence in Australia here.

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