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By Alison Donnellan 3 September 2020 13 min read

COVID-19 has and will continue to have an unprecedented effect on the global economy. In Australia, the pandemic has halted economic growth, with the disruption of supply chains and the restriction of movement being major factors behind an estimated 2020/21 Budget deficit of $180 billion and the economy plunging into recession, with GDP shrinking by 7%. 

Currently, more than five million people are accessing JobKeeper and JobSeeker programs (termed ‘job retention’ measures by the OECD), with close to one million Australians currently unemployed.

Once JobKeeper ends, Australia will see the true economic damage to small and economically fragile enterprises. Job retention programs are acting as a temporary shield for businesses on the edge, with data showing that business bankruptcies are 12% lower in 2020 than 2019. 

JobKeeper is effectively sustaining businesses that ordinarily would have gone bankrupt. Because of this, enterprises outside of this pool will re-emerge from the pandemic with drastically reduced incomes, ultimately resulting in far lower employment.

The pandemic has also accelerated monumental structural changes to the nation’s industrial make-up, providing Australia with an opportunity to pursue new and innovative business models and sectors  that have increased high-growth potential. 

The policy question for strategists trying to regenerate the embers of our dampened economy is which industries can provide an immediate boost to employment and which can sustainably boost employment into the future but require re-skilling and investment?    

Economic recovery in the past has often involved two phases:  

  1. Large job creation programmes to tide-over the sectors and demographics hardest hit by the pandemic; and 
  2. Training people and boosting growth industries that will provide the sustainable jobs of the future. 

Figure 1. Bankruptcies 2019 and 2020.  Source: ASIC weekly insolvency statistics

1. Interim-job creation projects 

Iconic job creation projects that have pulled Australia out of past crises include the Sydney Harbour Bridge construction during the great depression in the 1930s (nicknamed ‘The Iron Lung’ of the NSW economy), the Snowy Mountains Scheme which provided work in the post-war period, and the Nation-building and Jobs programme that constructed schools and infrastructure after Global Financial Crisis in 2009

Photo: Workers on the Sydney Harbour Bridge 1930 Source: Photographer unknown, 3 September 1930 Sydney Harbour Bridge Photographic Albums 1923 –1933, vol 6, State Records NSW

These schemes were designed to boost low-skilled employment immediately after economic hardship to ensure Australian workers, especially young workerswere not left with permanent scars to their future employment prospects. There is already evidence that the break in employment or study caused by COVID-19 has permanently hampered the career and life trajectories of younger workers.

Paying workers whose careers have been disrupted by COVID-19 to participate in job creation programs rather than providing welfare not only keeps money circulating throughout the economy and supports small business, but also averts mental health issues.

However, while short-term job creation projects have created essential and productivity-enhancing infrastructure in the past, they almost always involve an enormous public outlay and have limited lifespans or construction-phases

They have also typically focused on male employment in sectors such as infrastructure construction, and not on employment in female-dominated industries.  

Youth and women are the hardest hit 

 Younger people working in part-time and casual jobs in the hospitality, the arts, recreation and retail sectors have been the hardest hit demographics, with the June unemployment rate reaching close to 14% for 15-19 year-olds, and 12% for 20-24 year-olds.  

Global market research firm CoreData Research5 reports that while job losses due to COVID-19 has been greater for women, men have lost more income, an outcome likely due to more women working part-time in lower paid jobs with less income streams to fall back on.  

The Australian Bureau of Statistics shows little difference in the unemployment rates of men and women (7.5% and 7.4% respectively in June 2020), but the participation rate for women is lower and fell slightly more during the pandemic.  

Many older workers may also be forced to retire early due to redundancies in larger corporations, particularly in the middle management areas. Most of these workers are employed in industries that are not likely to re-employ them post-pandemic due to the impact of new technology or changes in working style.

Unemployment by age gap and participation by age gap.Source: Australian Bureau of Statistics, Labour Force Survey Cat. 6291.0.55.001 June 2020

What jobs have been hit hardest by the COVID-19 pandemic and where is employment stimulus needed 

Unsurprisingly, accommodation, food services, retailarts and recreation have experienced the largest number of job losses during the pandemicwith Sydney and Melbourne bearing the brunt of the damage 

While the decrease in employment is substantial in accommodationfood services, arts and recreation, the National Skills Commission[Link will open in a new window] (NSC) predicts these sectors have the best chance of growing rapidly once pandemic-induced lockdowns end, with the population relishing the opportunity to dine out and travel again.  
In a May 2020 report[Link will open in a new window] NSC also hypothesisethat healthcare, social assistance and construction companies would increase their staff level in the coming months, an insight that aligns with the creation of new enterprises that have sprung from the ashes of those that closed due to lack of cashflow during lockdown.

Job numbers change by industry May 2019 – May 2020Source: Australian Bureau of Statistics Labour Force Survey, four quarter average, except for Australia which is seasonally adjusted data via the Australian Government labour market information portal.

2. Longer term sustainable jobs: industries that kept growing jobs during the pandemic 

Longer term sustainable jobs will rely on supporting wealth-generating industries in new and emerging sectors. When the JobKeeper ends, it will be vital for Australia to focus on supporting firms that can rapidly increase employment.   

In 1987, economist and author David Birch found that 70% of job growth in the US came from just 4% of high-growth companies. These companies were termed ‘gazelles’ and were defined by their ability to increase their $1 million value by 20% per year for four or more consecutive yearsMore recent studies in the UK estimated that more than half of all employment growth between 2002 and 2008 was found in just 6% of firms.

Gazelle firms operated across all sectors, but were far more likely to be innovative, deploying new technology (such as digital technology) and exporting early. And while the dynamics of firm employment are different in Australia (this is because many of our fledgling high-growth firms leave our shores early in their development for larger markets in the UK, US or Asia7), we are more likely to create sustainable and longer-term jobs by focusing our efforts on emerging and disruptive companies in growth sectors that have the potential to export.

What are those growth sectors?  

There are three industry sectors the pandemic has and will continue to accelerate: 

  • Digital and ICT industry 
  • Health and aged care 
  • Reusable products and renewable energy sectors.  

Advanced manufacturing and the need for increased sovereign capability might see a revival, however, manufacturing in Australia has always suffered from a small domestic market, with ballooning transportation costs to global markets outperformed by closer and lower-wage nations.

Education is more promising, with citizens investing in and relying upon the industry to train them for the ‘new normal’ A survey of Australian workers commissioned for ING Bank found that one in three Australian workers are looking for a new career in the post-pandemic environment, with roughly 23% unsure they had the right skills for the future of the workforce.

Education and training will form the groundwork of the aforementioned growth sectors, playing a critical role iproviding skilled workers for the future.

Employment ('000s) in the four largest employment sectors in AustraliaSource: Australian Government Labour Market Information Portal - 2019 Industry Employment Projections Report 22 November 2019

The digital and ICT Industry 

The pandemic has boosted the stocks and market share of digital platform companies including e-retail (e.g. Amazon, ebay, Alibaba, shopify), financial payments (e.g. Afterpay, Zip, EML payments), telework platforms (e.g. Zoom, Slack, Webex, Microsoft Teams), telehealth (e.g. COVIU, Adracare, Updox and Mend) and cloud and smart phone services  

Other sectors are also seeing a boost in digital job offerings. LinkedIn data for April 2020 revealed the role of ‘Software Engineer’ was one of most advertised vaccanies (second only to ‘Project Manager’), while tech companies were the biggest employers of the month (Amazon Web Services, Atlassian and Telstra) with non-tech companies (eg, Australian Taxation Office, Commonwealth Bank and Westpac) also in need of digital specialists.

Even though the stock market isn’t an indicator of employment, there are signs that the tech boom is also creating an employment boom.  

The rapid growth of fintech, regtech and platforms across many industries indicate digital service jobs will be in demand during and after the pandemic, with the technologies needed to drive the Fourth Industrial Revolution requiring skilled workers in: 

  • Blockchain  
  • 3D printing 
  • Robotics and automation 
  • Artificial intelligence and machine learning 
  • Internet of Things and sensor networks 
  • Virtual and augmented reality  

Healthcare and Social Assistance 

The demand for healthcare and social assistance workers steadily increased in correspondence to Australia’s ageing populationhowever, the last decade has seen skill shortages in thsector, particularly in nursing, physio, occupational therapy, mental health, midwifery and clinicians.  

This trend is likely to be accelerated by COVID-19, with the pandemic putting increased pressure on Australia’s healthcare system. Technology may alleviate some of that demand by replacing repetitive and laborious work and enabling remote consultations, but overall, there will be more demand for workers over the coming decade.  

The roles that will be the hardest to fill are those that require substantial education and training rather than transferable skills.14 

Reusable products and renewable energy 

Beyond COVID-19, climate change is still a looming crisis that requires monumental industry change. Low-carbon, carbon-fixing and adaptive technologies and enterprises will be critical to Australia and the world’s future, and while the switch to renewable energy is underway, it’s a long way from complete, with renewableproviding less than a quarter of Australia’s total energy mix in 2019.  

Despite this, the number of jobs in the sector has increased substantially over the last four years, with increasing opportunities for employment in repurposing or replacing plastics. This trend aligns directly with the zero-waste movement and policies banning single-use plastics. 

The trends in employment in this area are harder to determine in collected statistics, however. 

Number of full-time equivalent jobs in the renewable energy sector 2009-2019 per yearSource: Australian Bureau of Statistics


Expected employment losses post-JobKeeper can be mitigated through short-term job creation projects, with a focus on metropolitan youth, women and older workers that may never work again without assistance. 

Long-term job creation can be enabled by supporting employment opportunities in new and emerging growth sectors and high-growth companies, particularly those that champion digital solutions. 

By using megatrends already impacting Australia as a framework, it’s clear that targeted investment in employment and training in growth sectors will reap the greatest long-term rewards for our future economy and society.  


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