Today, meet tomorrow – Australia’s Digital Pulse
Reducing digital skills gaps among businesses could represent a $25 billion economic uplift for Australia by 2035.
The technology sector is central to Australian prosperity, contributing $134 billion to the Australian economy in FY24 and employing more than one million technology workers. As the Economic Reform Roundtable approaches, technology investment is emerging as a key lever to address Australia’s persistent productivity challenges.
According to the latest edition of ACS Australia’s Digital Pulse, written by Deloitte Access Economics for the Australian Computer Society, a concerted effort to reduce digital skills shortages in the workforce could provide a $25 billion economic benefit for Australia by 2035.
This reflects not only the importance of the technology sector, but the importance of digital skills to the wider economy. Based on analysis of the skill mix of all occupations and time spent on tasks, the typical Australian worker spends nearly three hours using digital skills every day, equivalent to 180 million hours across the whole economy each week.
However, most workers lack the digital skills required for their role. Over half of workers believe one or more of their digital skills is insufficient for their current role, with AI skills lagging most.
Major digital skills gaps affect an estimated 150,000 businesses, resulting in difficulty adopting new technologies, lost revenue, and increased cybersecurity risks. The consequences of this are on display in the latest World Competitiveness Ranking, where Australia ranks 54th out of 69 countries for use of digital tools and technology.
Skills gaps are more prevalent in the public sector, where half of agencies have a critical shortage in digital literacy skills and three-quarters face cybersecurity skill shortages. Furthermore, surveyed public sector workers were more likely to report their digital skills are insufficient for their current role compared to their private sector counterparts. These skills gaps may be related to the risk averse approach to adopting new technologies in public sector entities. This is understandable given the sensitive nature of data held in their systems, but can leave systems vulnerable to cyberattacks and stagnant productivity.
Improving our digital skills is critical to mitigating the costs associated with cyberattacks. The report estimates cyberattacks cost Australia $63 billion in 2024, including costs to individuals and businesses. In Australia, a cyberattack is reported every six minutes, and this number is expected to grow as AI enables greater automation of attacks.
Despite Australia’s increasing need for digital skills, traditional sources of digital talent are under pressure. The technology workforce is heavily reliant on international talent to fill digital skills gaps, with nearly half of technology workers in Australia born overseas. Yet the number of new temporary work skilled visas for ICT occupations fell from 14,000 in 2023 to 9,000 in 2024, and overall net overseas migration has slowed. Broadening the entry pathways into technology roles is key to meeting skills needs.
Harnessing the potential of new technology and ensuring the workforce has the necessary digital skills is crucial to addressing Australia’s long-term productivity challenges. Important steps are being made, including the ongoing development of a National AI Capability plan, the upcoming Strategic Examination of Research and Development report, and the Economic Reform Roundtable.
This week the Productivity Commission acknowledged the significant productivity potential of AI, emphasising that regulation should be proportionate, balancing the technology’s opportunities with its risks. This underscores the importance of having a sufficient skills base to capitalise on the upside of emerging technology.
This newsletter was distributed on 6th August 2025. For any questions/comments on this week's newsletter, please contact our authors.
This blog was co-authored by Angela Watzdorf, Economist at Deloitte Access Economics.
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