Report: Australia's tech workforce shrinks

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 owing to support for rapid AI adoption and a need to maintain national competitiveness.

The report did find, however, that 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..

Other findings include the Productivity Commission estimating 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, stated that technology alone won't deliver Australia's AI agenda.

"These findings warn that our skills gap will widen without immediate action. In the age of AI, clarity about human capability is just as critical as standards and regulation. We must take action now to ensure technology professionals are equipped with the skills required to enter and support the workforce," Dr Ralston said.

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; promoting workforce professionalisation by driving consistent capability standards using frameworks like SFIA across government and industry recruitment and procurement criteria; and establishing a national commitment for 20 per cent of entry-level tech hires to come via alternative pathways by 2030, supported by an 'earn while you learn' digital cadetship pilot and greater government support for employer-funded accredited training.