### RESEARCH INSIGHT

Ai GROUP SURVEY

### Listening to Australian businesses on workforce
 and skills 2024

## The digital and AI revolution,
 jobs and skills

MAY 2024

Ai Group’s Centre for Education and Training surveys a cross-section of Australian
businesses every two years to learn more about skills and workforce challenges across
the economy.

This comprehensive, future-facing survey asks companies about the external and

internal factors driving their skills and workforce needs now and into the future. It also

asks where the skills challenges or shortages are, and the steps businesses plan to
take to develop or acquire the skills and capabilities they consider they need to succeed.

The survey has asked businesses about digital transformation and digital skills for

some time, providing data on the evolving demand for these capabilities. This year, for
the first time, the survey takes a deeper look at the impact of generative AI, exploring
what it might mean for workforces, jobs and skills.


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#### Cyber security skills the number one priority for business, followed by basic digital skills


**Cyber security skills are number one in a long list**
of digital and technology skills businesses are
seeking in 2024.

**64% say they need cyber security skills and**
**capabilities in their business. This has risen from**
33% of businesses surveyed in 2022.


**Basic digital skills remain a high priority for**
Australian businesses, with 42% of those
surveyed in 2024 reporting they need these skills
in their business. This demand has lessened
somewhat from the last survey in 2022, when
basic digital skills were the highest priority, with
62% of Australian businesses needing more of
these skills.


Which digital capabilities are you needing in your business?

#### More businesses seeking skills in artificial intelligence and
 big data


In 2024 30% of companies surveyed say they
needed artificial intelligence skills in their
business, up from 20% in 2022.


Demand for big data skills is also up since the
previous survey. 33% of businesses surveyed
in 2024 said they needed these skills in their
business, up from 25% in 2022.


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#### Less demand for programming, networking and cloud skills

The proportion of businesses reporting a demand
for cloud computing, programming, networking
and human-machine interface skills has dropped
off over the last two years.

This may suggest businesses are beginning
to consolidate and leverage the gains from
their investment in digital infrastructure over
the past few years. Now, as the valuable pool
of data grows and new technologies become
sophisticated enough to make productive sense
out of this data, businesses are switching their
focus to protecting their assets and investing in
cyber security capabilities.

Businesses were able to rank their need for these
digital skills in order of priority. They were able to
rank as many as applicable.


#### Improving the digital capability of managers and professionals the focus

This year businesses are focused on improving
**the digital capabilities of managers.**

Three quarters (75%) of businesses surveyed
intend to focus their efforts on improving the
digital skills of their managers (up from 60% in
2022) and a return to pandemic-era levels (77%
in 2020).

**Professionals are also a key focus, with 62%**
of respondents intending to improve the digital
capability of the Professionals in their business,
closely followed by Technicians and Trades
workers (56%).

Since 2020, businesses have been increasing
their focus on improving the digital capabilities of
Professionals and reducing their focus on Clerical/
Administration workers and Sales Workers.


If you intend to improve the digital capability of your business,

which employees are you prioritising?


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#### Many businesses yet to engage with AI

With the rise in availability and potential
applications of generative AI in the workplace,
this year’s survey sought to understand more
about how businesses are engaging, or not
engaging, with this technology.


**41% of the businesses we heard from reported**
**‘no engagement’ with AI.**

Small and medium sized businesses were the
most likely to report no engagement, with 27% of
small businesses and 29% of medium businesses
yet to engage.


In what way is your business engaging with Artificial Intelligence?


37% of the businesses were utilising AI to develop
**business analytics to inform decision making**
and 36% were using the technology to optimise
**operations and reduce waste/cost.**

Others were using it to automate appropriate
**labour intensive processes/tasks and improve**
the speed and quality of customer service.

19% were using AI technology to identify new
commercial opportunities.

The implications for jobs and skills are clear.
More businesses using AI to automate labour
intensive processes and tasks is likely to reduce
demand for clerical and routine jobs and skills.
On the flipside, as more businesses utilise the
technology to create a greater volume and depth
of business analytics, there is likely to be greater


demand for managers and leaders with skills in
data management and analysis.

#### Large businesses most likely to be utilising AI

Large businesses were the most likely to be
engaging with AI – only 7% of large businesses
said they were yet to engage with the technology.

Large businesses were most likely to be using AI
**to develop business analytics to inform decision**
**making and optimise operations to reduce**
waste/costs.

Small and medium businesses were more likely
to report ‘no engagement’.


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Engagement with AI by business size

A small number of firms reported they were using AI in various functions of their business, such as
marketing, tender writing, report writing and research. A number also mentioned that at the time of the
survey, they were integrating AI with their existing software suite to complete specific tasks.

#### A lack of skills, capabilities and understanding of the technology is holding businesses back

There is a clear message here – a lack of human skills and capabilities is preventing many businesses
from embracing and utilising AI technology.

When asked about the barriers holding them back from doing more with AI, the top three answers were
**insufficient understanding of the opportunities, skills gaps and leaders lacking the skills and capabilities.**

**63% of companies reported a lack of understanding of the opportunities AI presented for their business**
as the reason for not engaging further with the technology.


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What are the barriers holding you back from doing more with Artificial Intelligence?


Few businesses cited regulatory barriers or risk
as a reason for not engaging further with AI.

Many companies noted that at this point they
simply don’t have the capacity to divert attention
away from their day-to-day operations to
investigate or implement AI in their business.

#### AI knowledge and skills gaps right across the economy

The lack of knowledge and skills about the AI
opportunity was fairly evenly spread among
small, medium and large businesses.


Large businesses were as likely as small
businesses to report skills gaps as a barrier to
embracing AI – 22%, 21% and 22% respectively
for small, medium and large businesses.

Likewise, businesses of all sizes reported
leaders’ lack of skills and capabilities to be
barrier to doing more with AI.

More small and medium businesses reported
insufficient understanding of the opportunities
for their business.


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Barriers to engaging with AI by business size

Overall, the survey responses on this issue tell
us that, for many Australian businesses, a link
has not yet been drawn between their business
needs and the potential applications of AI.

For the majority of businesses we heard from,
there was a self-reported lack of understanding
and lack of skills to make sense and use of the
technology at this point – including among
business leaders themselves.


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## The businesses we surveyed


A total of
# 251
Australian businesses completed our
survey in the first quarter of 2024,
employing a total of

# 291,232

Full Time Equivalent (FTE) employees.

**52% of the respondents reported being part of**
**the manufacturing sector. This included a diverse**
range of manufacturers, including those making
food, beverages, chemicals, equipment, building
materials, metals, textiles and furniture.

19% came from the services sector, and a
further 10% from construction. Respondents
selecting ‘other’ were diverse and included
defence/aerospace, aviation, recyclers and
not-for-profit community organisations. The
remaining 3% reported being from the mining/
mining services sector.


#### We heard from
 businesses across a range of industry sectors


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#### We heard from businesses right around the country

38% of the businesses we heard from were based in Victoria, 26% in New South Wales
and 22% in Queensland. 10% were from South Australia, with the remaining 4% located
in Western Australia and the ACT.

#### We heard from businesses
 of all sizes

22% of the businesses we surveyed
were small (between 0-19 employees),
51% were medium sized (between 20
and 199 employees) and 27% were large
(200 or more employees).

Respondents provided their best estimate of
their full-time equivalent headcount active in the
business. Using these estimates, the responses
have been grouped according to the Australian
Bureau of Statistics categories of small, medium
and large businesses.


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Ai Group Centre for Education and Training


Level 5, 441 St Kilda Road, Melbourne VIC 3004 Australia
Email: cet@aigroup.com.au www.cet.aigroup.com.au

### cet.aigroup.com.au


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