1) Technology will significantly transform economies, workplaces, and the roles of children in the future. Jobs will be automated, but new jobs will also be created that require different skills. 2) Countries and businesses need to invest in skills training, lifelong learning, and foster new types of work to prepare for these changes. This includes investing in both STEM and soft skills. 3) Significant changes to education systems are needed to build the skills required for future jobs, such as problem solving, creativity, and adaptability. Business leaders have an important role to play in partnering with governments on these issues.

1. How technology will transform your
economy, your workplace, and your
child’s role in it
Michael Priddis
Partner and Managing Director
BCG Digital Ventures
michael.priddis@bcgdv.com

2. INTRODUCTION
Introduce Today’s central insight Outcome
The research questions
we’re answering
Education > STEM
Appeal to your role as thought
leaders in innovation, creativity
and growth to drive education
thinking in your organisations
and at the national level
Share some research into the way accelerating technologies such as AI will impact the economy
of the future

3. 1953=100
THE GREAT DECOUPLING
Andrew McAfee
US PRODUCTIVITY, GDP, EMPLOYMENT & INCOME 1953-2011
Labour productivity
Median Household Income
Real GDP
Private Employment

4. THE SECOND MACHINE AGE
Erik Brynjolfsson & Andrew McAfee
“Racing with the
machine beats racing
against the machine.”
Erik Brynjolfsson

5. cognitive
manual
routinenon-routine
Adapted from ‘the second machine age’
• Scientists & Researchers
• Architects
• Doctors
• Designers
• Data Entry & Formatting
• Telephone Sales / Advice / Services
• Routine Accounting Work
• Hair Dressers
• Plumbers & Builders
• Nurses
• Baristas
• Checkout & Retail
• Distribution Centre
Pickers & Packers
• Mine Truck / Train Drivers
JOB MARKET SHIFTS
DEMAND INCREASING ↑ DEMAND DECREASING ↓

6. Oxford University, December 2014
MICHAEL OSBORNE
Employment
Probability of Computerisation
LOW
33% Employment
transportation & material moving
production
installation, maintenance & repairs
construction & extraction
farming, fishing & forestry
office & administrative support
sales & related
service
healthcare practitioners & technical
education, legal, community service, arts & media
computer, engineering & science
management, business & financial
MEDIUM
19% Employment
HIGH
47% Employment

7. OTHER
COUNTRIES’
RESPONSES

8. GERMANY

9. UNITED
KINGDOM
FORCED FLEXIBILITY
(BUSINESS AS USUAL)
THE
GREAT DIVIDE
SKILLS
ACTIVISM
INNOVATION
ADAPTATION

10. FUTURE
SCENARIO 1

11. FUTURE
SCENARIO 2

12. 2018
$152 BILLION
LOCAL GOVERNMENT
OF GUANGDONG
CHINA

13. WHAT DOES
IT MEAN
FOR
AUSTRALIA?

14. What are our kids learning now,
and what do they need to learn in the future?

15. How will our cities, workplaces and transport infrastructure
respond to changes in the future of work?

16. What do these changes mean for the people & jobs in regional areas that
are built around a single industry that is likely to be disrupted?

17. How will Australia remain competitive, when Asian countries
and the global market advances so quickly?

18. For Business
WHAT THIS MEANSINTERNAL
CHANGES
RESPONSES
EXTERNAL
CHANGES
• Major shift in number of staff
• Entirely replaced job categories
• New jobs, (re)training and skills development
• New work practices and industrial relations
• New recruitment strategies and processes
• Significant change and costs, over years
• New property requirements
• Balance TSR with CSR
• Create the $1bn+
opportunities
• Benefit from industry-
wide and government
collaboration
• Major changes to the needs, behaviours and
motivations of customers (all segments)
• New products, services, value propositions
• New pricing models for current products
• Shifts in the relative attractiveness/risk
profile of customers and products
• New markets rise as current markets decline
• New capabilities that use new technologies
• New and disruptive competitors
Strategy, Innovation,
Business Model, Risk
Management, HR,
Change Management
Building the business
cases for change:

19. In collaboration with business
WHAT THIS MEANS FOR THE
AUSTRALIAN GOVERNMENT
UNDERSTANDING
PLANNING FOR AND
HARNESSING THE SHIFT
The cumulative effect Welfare
Taxes
IR
Education
R&D
Infrastructure
At a National,
State & Local
level
Across Industries
In relation to
Regional &
Global change

20. SO, LET’S SEE AN EXAMPLE
OF THE DATA, AND SHOW
ME WHAT THAT MEANS

21. AUGMENTATION
by working with technology people can accomplish more, and overall job numbers are protected…
Totalemploument(‘000s)
0
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
2
4
6
8
10
12
14
Photographic developers and printers
Photographers
Source: Australian Bureau of Statistics [67]
Jobs in photography

22. …However, not all people get to enjoy these benefits;
it is unlikely that many displaced printing press workers have become graphic designers.
Source: Australian Bureau of Statistics [67]
Jobs in graphic design and printingTotalemploument(‘000s)
0
1992 1994 1996 1998 2000 2002 2004 20082006 2010 2012 2014
10
20
30
40
50
60
Printers/graphic press workers
Graphic designers

23. HOW MIGHT WE FOSTER NEW JOBS IN NEW
INDUSTRIES, AND NEW SKILLS PEOPLE WILL NEED?
VENTURE CAPITAL1
NEW PARADIGMS OF WORK2
DIGITAL INCLUSION3
LABOUR MARKET RE-ACTIVATION4
NEW WORKFORCE STATISTICS5
EDUCATION7
OVERCOMING THE DISINCENTIVE
TO BE A MODERN WORKER
6

24. INCREASED INVESTMENT
600-800
significantly
private
sector jobs
US GDPAmerican venture capital has
per year
$ $
$ $
$ $
$ $
$ $ $
$ $ $
new US enterprises acquire
venture capital funding
into early start-ups since the GFC
venture-backed businesses
Encourages innovation, creativity and growth in the small business environment, correlated with job creation [161]
VENTURE CAPITAL
11% 21%

25. Australian VC is declining, accounting for 0.02% of Australian GDP, with funding available for start-ups in decline since
the GFC.
A 50% increase in the number of patents in Australia in 1999-2013 compared to 16x in China, and migration of
Australian skilled workers and entrepreneurs overseas.
IN CONTRAST
THE EFFECTS
Source: ABS, Venture capital and later stage private equity [155]
Declining Australian venture capital funding
NumberofInvestments
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
0
20
40
60
80
100
120
140
160
Early Expansion
Start Up
Other

26. TECHNOLOGY IS BRINGING CHANGE
In 2012 the number of co-working spaces in Australia
increased by 156%, and freelancer.com is booming
4 million Australian households don’t have internet access
Infrastructure and funding to help people find new jobs
GDP doesn’t measure the value of 24 hour access to services, but it does
capture the cost. We must measure productivity, living standards income
distribution, labour markets
Who provides the funding for freelancer’s superannuation, payroll tax, sick leave and
vacation time? For entrepreneurs, and given the VC status, who provides the safety
net for the high failure rate associated with start-ups, which can have financial, social
and psychological impacts for not only the entrepreneur but also his or her family?
so how might we foster new jobs in new industries, and the new skills people will need?
VENTURE CAPITAL1
NEW PARADIGMS OF WORK2
DIGITAL INCLUSION3
LABOUR MARKET RE-ACTIVATION4
NEW WORKFORCE STATISTICS5
EDUCATION7
OVERCOMING THE DISINCENTIVE
TO BE A MODERN WORKER
6

27. INVESTMENT IN STEM IS VITAL
SAY EMPLOYEES WITH
STEM SKILLS ARE THE
MOST INNOVATIVE
GROWING OCCUPATIONS
REQUIRE STEM
KNOWLEDGE
70% 75%
However,
• 1992-2012 STEM participation in Australian schools dropped
• OECD STEM PISA rankings: Australia is in relative decline
• Students at Australian universities mainly target non-STEM fields of study
• By 2030, China and India will provide half of all people with tertiary education, and over 60%
of the STEM qualified workers
OF EMPLOYERS OFTHE FASTEST
SO, STEM INVESTMENT IS IMPORTANT, BUT IS IT ALL WE NEED TO DO?

28. In 2012 every third adult in the OECD had a tertiary degree
THE AGE OF THE GRADUATE BARISTA
There’s more going on than investment in STEM will fix
Source: Graduate Careers Australia [201]
Proportion of bachelor degree graduates working full-time of those available for full-time employment
%
50
55
60
65
70
75
80
85
90
95
100
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014

29. 350 ABS occupations
Matched to US Department of Labor O*NET database, which provides breakdowns of
the relative importance of 41 different activities in each occupation
Statistical learning identified four clusters of activities which best explained changes in
employment:
1. Knowledge work: getting, documenting and analysing information, creative thinking and problem solving
2. Higher-level people skills: influencing, negotiating, coaching
3. Machines and physical work: maintenance, operation
4. Service work: caring, working with the public
Statistical analysis of the drivers of employment growth across professions, looking at
the Australian data going back to 1991:
1. People skills +43% more jobs than the average
2. Machines or physical work -55% below the average
WHAT THE TEAM DID
(brace yourself)

30. Australian employers want ‘soft skills’
THERE’S A PERSONAL SKILLS GAP
TO BE BRIDGED
WILLINGNESS TO LEARN
INTERPERSONAL AND
COMMUNICATION SKILLS
ATTITUDE AND WORK ETHIC
SELF-MANAGEMENT
TEAMWORK AND MOTIVATION
CRITICAL THINKING AND
IMAGINATION
Innovative thinking and self-development
as professionals can set a young
employee apart
Problem-solving skills and capabilities
including creativity and persuasion will also
be required to fulfil abstract, non-routine
tasks which are less likely to be computerised

31. EDUCATION QUESTIONS
How might we build People Skills for tomorrow’s jobs?
The current education system teaches people to be effective in a highly structured system. Australia’s future
workforce is likely to encounter much ambiguity and openness. How might we teach this?
Our future educational system will need to do more to encourage innovative, entrepreneurial and flexible
mindsets. “Innovation Education” was included in the Icelandic national curriculum in 2007. How might we
foster the Australian discussion about this?
Continual investment in education will be required in order to keep up with the rate of change brought about
by developments in digital technology. How might we fund the infrastructure, and the purchase, of lifelong
learning?
Existing educational institutions are facing business model and service delivery challenges. How might we
drive the evolution of Education, so these organisations can deliver on future needs?
The current youth unemployment crisis can be viewed as a sign that educators are not providing new
workforce entrants with skill sets that are sought after in the current labour market. How might we identify
and then invest in the skills that are required in the future?

32. an action you might consider doing next...
YOUR KEY QUESTION
WHAT IS YOUR ROLE, AND YOUR
COMPANY’S ROLE, IN ENSURING THE
FUNDING, DELIVERY AND DEVELOPMENT OF
ESSENTIAL SOFT SKILLS, ALONGSIDE STEM?
National, metro, regional.
Government policy.
Professions, job categories.
Corporate strategy.
Existing and new industries.
Near and long term investment. And change.

33. THE BUSINESS CASE:
If we don’t, we’ll likely lose out in the international Knowledge Economy.
And that’s not only about how you retain and win new clients and
customers. Given the timeframe and significance of the changes ahead... ...IT’S ABOUT...
an action you might consider doing next...
YOUR KEY QUESTION
WHAT IS YOUR ROLE, AND YOUR
COMPANY’S ROLE, IN ENSURING THE
FUNDING, DELIVERY AND DEVELOPMENT OF
ESSENTIAL SOFT SKILLS, ALONGSIDE STEM?
National, metro, regional.
Government policy.
Professions, job categories.
Corporate strategy.
Existing and new industries.
Near and long term investment. And change.