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ICT skills crisis in public sector now “almost inevitable”

by Staff Writers •
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Intermedium’s analysis of the recently-released Defence White Paper and Capability Plan identifies the ICT component of planned Defence projects will be at least $10 billion, with around half of this coming to market over the next four years. The public sector risks a severe shortage of key ICT skills within the next 18 months as a result of the implementation of major projects in Defence, Budget infrastructure initiatives and the NBN, which will coincide with economic recovery in the private sector, Intermedium believes.


Intermedium’s Head of Research, Tim Conway, says this work – in addition to other public sector projects and “business-as-usual” activity – means Defence along with other government agencies will really struggle to find or retain skilled ICT people as the economy recovers.


Intermedium’s Defence Briefing held last week revealed that the 110 projects covered in the Defence Capability Plan, released by Defence Minister John Faulkner on 1 July, had a conservatively estimated content of around $10.2 billion at today’s costs.  In particular, Intermedium identified 67 of these projects as having “Very High” or “High” ICT content, which were worth more than $8.3 billion.


In addition, Conway told the briefing it was likely the classified or sensitive projects not released in the public version of the Defence Capability Plan could be worth up to $15 billion at today’s costs.  “Many, if not most, of these would seem to relate to intelligence, surveillance and reconnaissance (ISR) activities.  If so, then these will also be highly ICT intensive, further increasing demand for skilled ICT resources.”


“The demand created by these projects needs to be coupled with other developments such as the NBN and the infrastructure projects announced in the recent Federal Budget,” Conway said. 


“Intermedium estimates infrastructure spending will generate around $2.3 billion in ICT activity over the same period.  And construction of the NBN could well generate another $1-$2 billion over the same period, depending on how it is implemented.”


Intermedium’s analysis also points to the rate of economic recovery forecast in the May Federal Budget. “Treasury’s forecast economic growth trajectory of 2.25% in 2010-11 to 4.5% in 2011-12 and beyond represents a very strong rebound.  Moreover, recent economic data reduces some of the scepticism with which this forecast was greeted at Budget time.  As recovery gathers momentum, other significant ICT users in the economy, such as the Banking and Finance sector, can be expected to invest rapidly.  They will have to, for competitive reasons.”


Conway says that while the various government-funded programs would mainly be fulfilled by private companies, key government departments need to be aware of their impact on the availability of skilled people for the governments’ own needs. “History shows government is the least competitive employer when the economy grows rapidly.  Strategies such as reducing the number of ICT contractors, and their replacement with permanent public sector employees quickly faltered in the past. There is nothing to suggest the same won’t happen in this recovery cycle.  Indeed, given the level of stimulus generated by the Government, the risk is probably higher.”

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