Australia's tech workforce shrinks: report

Australia’s tech workforce has shrunk for the first time on record, according to a new report from the Australian Computer Society (ACS).

The Australia’s Digital Pulse 2026 report, prepared by Deloitte Access Economics, found the tech workforce has declined by 0.3 percent, despite the country needing a predicted 259,000 additional technology professionals within the next decade. Driving worker demand is the growth in AI adoption, which isn’t going to flatten any time soon.

It’s not all skill shortage doom and gloom, however, with the report finding digital skills in the workplace contributed $476 billion to the national economy, with the direct contribution of the tech sector growing five percent to $142 billion.

Richard Marles, Deputy Prime Minister and Minister for Defence launched the report, highlighting the need to prepare Australia’s workforce for the next wave of technological change.

Marles said people shouldn’t fear change, noting the task ahead is to make sure Australians have the education, training and professional skills to succeed. Australia also must build sovereign capability while continuing to work with international partners, the Deputy PM said.

Other findings include Productivity Commission estimates that AI adoption will be worth $116 billion to the economy over the next ten years, while also observing further private AI investment, to the tune of $13 billion per year, is needed for the nation to keep pace with “leading digital economies.”

Tech workers are also coming into the industry through alternative pathways, with 40 percent eschewing the traditional university degree qualification to get their foot in the door. The most common alternative pathways taken by tech staffers were workplace training, industry credentials, and self-directed learning.

ACS chief executive officer, Dr Prins Ralston, warned the skills gap will widen without immediate action.

“Anybody can put an AI model into a hospital. We have spent a year deciding how Australia will govern AI. We still have not decided who is qualified to do it,” Ralston said.

Policy recommendations

The report sets out eight core policy recommendations needed to ensure Australian competitiveness, including promoting SME investment by providing a one-year $1 billion SME AI investment boost featuring a 50 percent tax deduction on AI training, strategy and technology expenditure for businesses with a turnover of less than $50 million.

Among the other recommendations is building AI capabilities in areas where Australia has a competitive advantage; ensuring migration settings address the digital skills gap; and harness gaming as a gateway to STEM.