A new report from Oxford Economics has found that the future workforce will be largely led by digital skills.

The comprehensive study, conducted across six markets including Australia, the United States, U.K, France, Germany and the Netherlands, found that Generation Z (people born between 1995 and 2010) is in fact set to benefit from the lasting changes to the ways we live, work and communicate brought about by COVID-19.

Analysing the impact of the recent steep increase in digital communication, remote working, e-commerce and other online services on the job market, the study forecasts that three out of five of jobs in Australia will require advanced digital skills by the year 2030.

And as the first generation to have grown up as digital natives, Gen Z – who beat all other groups in Oxford Economics’ analysis of digital capabilities – will be able to take advantage of this growing need for digital skills more than any other generation. Beyond digital aptitude, Oxford Economics found that three Gen Z traits were likely to serve them well in the future workplace: agility, creativity and curiosity.

Jobs in the emerging field of Augmented Reality – a market that is expected to see a ten-fold increase in value by 2023 – are a good example of the kind of profession that will require this blend of tech skills and creativity. Experts predict this fast-growing technology will be used across a wide variety of industries – from marketing and education to construction and agriculture – to streamline processes, reduce human error and support training, in the coming years.

Oxford Economics predicts that Gen Zers will become the engine of economic growth in Australia. The number of Gen Z in work is forecasted to more than double to nearly five million by 2030. Income (after tax) is expected to increase to almost AUD 265 billion, a 500% increase on 2019 income. And it’s this generations’ natural inclination towards technology and creativity which will help push the economy forward.

Oxford Economics director Henry Worthington said: “Simply put, in the near future workers will have to do the jobs that computers can’t. This isn’t about robots taking our jobs, it’s about making sure we train up the next generation to think and work in ways which computers can’t. Our research shows that we need to move away from teaching young people to accumulate knowledge, to a more well-rounded education which focuses on the application of this knowledge, creativity and critical thinking.”

Kathryn Carter, General Manager for Australia, New Zealand, South-East Asia and Hong Kong at Snap Inc. said: “Young people have had to navigate through huge challenges during the pandemic so far, but as the research from Oxford Economics shows there is a real case for optimism particularly if we can equip young people for a fast changing digital economy. Technologies like Augmented Reality have the potential to permeate all aspects of society and to drive demand for a new set of creative and technical digital skills over the next decade. And most promisingly for Gen Z, AR entrepreneurs highly value the soft skills inherent to Gen Z including creativity, agility and an eagerness to learn.”

Rethinking and refocusing education is essential

But this promising picture comes with a warning. Experts believe that for Generation Z to fully seize the opportunity of the shift to a more digital economy, governments, schools and universities must not only play catch-up on months of disrupted learning, but fundamentally rethink traditional models of education. As with previous recessions, the economic shock following COVID-19 is expected to lead to another wave of automation, but this time, one that will impact higher-skilled occupations rather than manual jobs. The analysis shows this will mean tech know-how and so-called ‘cognitive skills’ like creativity and critical thinking will be much more in demand in future.

To develop tech and AR talent further, Snap has launched a number of initiatives around the world which have reached over 10,000 young people to date. In Australia, India, France, the US and Malaysia, the company runs Snap Lens Studio workshops, which teach young people valuable augmented reality creation skills. The company’s Head of Games Studio is based in Brisbane, showing an ongoing investment into the local gaming community.

To ensure the support of young people and help them recover and harness their unique skill-sets following the COVID-19 pandemic, Oxford Economics calls for the following steps to be taken by business, the government and the education system:

1. Closing the schooling gap: The pandemic has seriously disrupted young people’s learning which, left unchecked, has the potential to negatively impact the economic prospects of Gen Z, leaving them unable to seize the opportunities presented by the new digital economyIn the drive to catch-up on missed learning, governments must consider the use of additional small group learning, in particular for children from disadvantaged households, where they are less likely to have access to the required technology at home for informal learning.
2. Rethinking and refocusing education: Formal education is still centred on the accumulation of knowledge rather than developing the skills needed to interpret it. Current education systems around the world are not doing enough to encourage creative, agile thinking which will be required for jobs of the next decade.Education systems should move towards problem-based learning and away from regular standardised testing of factual knowledge, as this would be an effective way to bring in more opportunities for the development of these kinds of skills.
3. Using technology to meet the reskilling challenge: COVID-19 has rapidly accelerated the move to a more digital economy and has disrupted many industries permanently in the process. Retraining needs to be accessible for wide groups of society so no one is left behind.

Governments should not only focus on training workers from disrupted industries for jobs that require more digital skills, but they should look to emergent technology like augmented reality to support this, which could be of particular help in training situations with limited physical resources.

4. Prioritising life-long learning: OECD survey data suggest that just under half of adults engage in further learning. But to keep being able to adapt to changing patterns of demand and skill gaps in local economies, this behaviour will become more important for all people of working age.

To incentivise this kind of learning, businesses should move away from asking candidates for proof of their formal education in favour of evidence of their commitment to learning outside of conventional systems.