Nearly half of New Zealand businesses have difficult-to-fill vacancies

Councils rely on a wide range of skilled labour to function, so the Productivity Commission's issues paper on new models of tertiary education has important implications for the local government sector. The trends in employment and education will also affect communities around New Zealand. The full paper is available here and initial submissions are due by 4 May 2016. Here's a summary of some key points.

There is a need for an increasingly educated workforceTechnological advances could make a large proportion of existing jobs obsolescent in the coming decades.

Based on current expectations of technological trends, the jobs most at risk are those with lower wages and requiring low levels of educational attainment. Analysis suggests 46% of New Zealand’s workforce faces a high risk of computerisation, which is similar to estimations for the United States.

Historically, routine and manual jobs (which tend to be low-wage and low-skilled, and which a computer can more readily undertake) are more at risk of decline than non-routine or interpersonal roles that require contextual judgement and emotional input.

This skills-biased technological change may mean that a large proportion of working adults will need to upskill and, in some cases, gain new qualifications to stay employed – including those who already hold qualifications. This proportion of students re-entering tertiary education could therefore be much larger in the future.

Nearly half of New Zealand businesses have difficult-to-fill vacanciesA 2013 survey of businesses reported 41% with difficult-to-fill vacancies. Half of those businesses identified applicants lacking the necessary “qualifications or skills” as a reason. Other common explanations included applicants lacking the desired attitude, motivation or personality; that they lacked work experience; and that there were not enough applicants (Statistics New Zealand, 2013).

New Zealand’s economy has a growing services sector and shrinking goods-producing and primary sectors. This trend increases the importance of skills development, the availability of skills in the labour market, and their effective use by employers. This is because performance improvement in the services sector relies on the acquisition, manipulation and application of information – and this is strongly influenced by worker skills.

How might tertiary education be delivered in future?Technological change is improving quality and reducing costs in tertiary education in many countries, and has further potential to do so. For example, computer programmes are increasingly able to personalise content or customise learning based on individualised assessments and some argue that massive online open courses (MOOCs) offer the potential to radically increase the output of education without compromising quality.

The Ministry of Education and the Tertiary Education Commission consider there are a number of implications of MOOCs in New Zealand:

• the potential to unbundle learning and accreditation; for example, allowing students to undertake courses for free, while paying for assessment and accreditation
• the potential for New Zealand institutions to extend their brand and reach a large international audience, including through offering MOOCs as a “taster” to attract paying students, or offering courses that would otherwise be too niche to be viable
• an opportunity to experiment with innovative teaching approaches
• the opportunity for institutions to reduce costs
• the ability for students to easily access learning in an area of their choosing
• opportunities to better support continuing education and professional education for employers and employees.

A particular challenge for online delivery of education is that while it has the potential to improve productivity and improve access for students, there is also good evidence that establishing positive peer and student-teacher relationships are important elements of success for some population groups who experience worse tertiary education outcomes than other groups.

Impact on international student numbers
International education is one of New Zealand’s largest exports. In 2014, more than 54,000 international students were enrolled at tertiary providers.

Commentators have identified a number of risks that New Zealand providers face in serving the international student market, including:

• the rapid rise in the availability and quality of education in the home countries of international students could make domestic study more attractive
• successful online distance education models may reduce the desirability of travelling for education.

Issues paper
The full ‘New Models of Tertiary Education’ issues paper is available here.
It considers five major trends:

• demographic change
• new technology
• changing labour demand
• increasing costs of tertiary education
• internationalisation (global markets for education).

​Initial submissions on the issues paper are due by 4 May 2016.  The submissions will help shape the nature and focus of the Productivity Commission's inquiry.

Anyone can make a submission. It may be in written, electronic or audio format. A submission can range from a short letter on a single issue to a more substantial document covering many issues. Supporting facts, figures, data, examples and documentation should be provided, where possible.

Submissions may be lodged at www.productivity.govt.nz or emailed to info@productivity.govt.nz. Word or searchable PDF format is preferred. Submissions may also be posted, but an electronic copy should be emailed as well, if possible.

​Next steps

• The Productivity Commission will release a draft report in September 2016.
• Submissions on that report will be due in November 2016.
• A final report will be provided to the Government by 28 February 2017.