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ICT Trends – Unemployment & the (ICT) Job Market

Youth Unemployment

An IITP Newsline opinion piece, published earlier this year, referred to the catastrophe of NZ's unemployed youth as publicised in a NZ Herald article (November 2012). The article stated that a tragic mismatch of skills was shutting most of New Zealand's record near-300,000 jobless out of the majority of the 15,000 jobs that were [currently] available. The jobs most in demand then, according to the Seek jobs website, were in information technology (IT) and engineering.

Further, the real tragedy was the length of time taken to get any traction on the vexing issue of the number of unemployed 15 to 25 year olds, then around 17 per cent, or 62,000 in total (IITP opinion piece, 7th October 2011).

A review of the current unemployment figures, based on the latest information available from Statistics NZ, shows a reduction in youth unemployment, but how significant is the reduction?

Current Unemployment Rate (Source: Statistics NZ)

In seasonally adjusted terms, New Zealand’s unemployment rate (Fig.1) fell to 6.2 per cent over the March 2013 quarter, a 0.6 percentage point fall from 6.8 per cent (revised) the previous quarter. This decrease reflects 15,000 fewer people unemployed (Fig.2).

Fig.1 Unemployment Rate Fig.2 Unemployed

Youth Labour Market

In the year to March 2013, there was a large fall in unemployment for people aged 15–24 years (down 10,500). Statistics NZ attributes this fall largely to an atypical decrease in unemployed 20–24-year-olds (down 11,200), as the number of people unemployed for this age group usually increases during March quarters. The unemployment rate for people aged 20 to 24 years fell 4.1 percentage points to 10.9 per cent, the lowest rate since the September 2009 quarter.

The number of both 15 to 19-year-olds and 20 to 24-year-olds in study rose, up 16,200 and 8,800 respectively.

NEET Rate

The NEET (not in employment, education or training) rate for youth (aged 15 to 24 years) decreased, in seasonally adjusted terms, 1.5 percentage points, to 12.5 per cent in the March 2013 quarter. This is the lowest youth NEET rate since the September 2011 quarter.

The NEET rate for people aged 20 to 24 years fell 2.4 percentage points to 15.9 per cent. However, an article in the NZ Herald Business section (Tuesday, July 16, 2013) states that youth unemployment is worse in Auckland; 28.6 per cent in the 15 to 19 age bracket compared to 24.4 per cent elsewhere and 11.1 per cent in Auckland for the 20 to 24 year age group compared to 10.7 per cent elsewhere.

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In Europe youth in the NEET category (Fig.3), currently as high as 50 per cent in some EU countries, including Spain and Greece, are being referred to as the lost generation. Angela Merkel said recently youth unemployment is the biggest crisis facing Europe and urged other governments to do more to copy the German system; concentrating on apprenticeships and not simply academic study, to prevent the emergence of a "lost generation".

Fig.3 OECD NEET Rate of Youth Aged 15 to 24 (Data for NZ & Australia June 2011 Quarter)

As stated two years ago in the October 2011 IITP Newsline, if just a small percentage of these disengaged youth could be persuaded that the ICT industry offers a well-paid career opportunity

then this would go some way to addressing the demand for skills while helping to reduce the number of youth in the NEET category.

Job Vacancies

A report by the ANZ bank in Stuff.co.nz, Business Day, 18 July, 2013, states that tepid growth in job advertisements may signal a rise in unemployment back to as high as 7 per cent. ANZ's job ads index for June was unchanged from May and just 0.7 per cent higher than at the same time last year.

Overall advertising eased 1.8 per cent in Canterbury, but grew 2.7 per cent in Wellington, as the city recovered from a slump in the job market earlier this year. Auckland ads fell 4.3 per cent.

ICT Online Job Ads

In comparison, Seek ICT job adverts (Fig.4) have increased by 7 per cent from May to June, although the June figure of 2427 is 13 per cent down on the same time last year.

Overall, Seek ICT job ads for all NZ to July have increased by 60 per cent since the beginning of this year, but are down by 7.6 per cent on July 2012.

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Fig.4 Seek ICT Job Adverts Monthly Trends 2010 –2013 (July)

Figure 5 illustrates the 2013 online job advert trends for Trademe IT, up by 63 per cent on January’s

figure, and for Seek ICT, 60 per cent since the beginning of this year. This is the third straight month

of significant/healthy increases for the Seek ICT job ad market.

Fig.5 Seek ICT & Trademe IT Job Advert Trends for 2013

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Figure 6 illustrates an overall increase in Seek ICT job adverts for July of 9 per cent for Auckland (+14

per cent for the month of June), 11 per cent for Canterbury and 4.4 per cent for all New Zealand for

the month of July. Auckland appears to be the powerhouse driving the overall increase in Seek ICT

job ads for all NZ.

Fig.6 Seek ICT Job Advert Trends Monthly Change for July 2013

Figure 7 provides a detailed record of the Seek ICT job advert trends by region to July 2013. Seek ICT

job ads for Wellington are up 46 per cent on the January figures while Canterbury is up 65.8 per

cent.

Fig.7 Seek ICT Job Advert Monthly Trends to July 2013

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Conclusion

The number of ICT jobs advertised for the month of July for all NZ is 60 per cent higher on the

January figure for Seek ICT and 63 per cent higher for Trademe IT. This continuing healthy demand

for suitably qualified and/or experienced ICT personnel should be/could be utilised to create

opportunities to reengage disenfranchised youth in the NEET category.

It will require a concerted effort by ICT industry leaders, IITP and tertiary institutions, working in

conjunction with government, to develop training and education opportunities to help address both

issues.

TIOBE Update

TIOBE July headline states that PHP is the fastest climber with an increase of +1.64 per cent, followed by database languages Transact-SQL with an increase of 0.99 per cent and PL/SQL up 0.34 per cent.

Fig.8 TIOBE (The Importance of Being Earnest) Programming Community Index for July 2013

News Bytes: A to Z

Australian IT Business (July 2013): The total ICT workforce is expected to grow by 7.1 per cent or 33,200 workers in 2017, including an extra 8000 software and applications programmers, 5700 ICT support technicians, 5600 ICT managers, 3000 database and systems administrations and ICT security personnel, and 4300 business and systems analysts.

ARN (June 2013): Serious shortage of niche skills particularly in high demand areas such as Cloud computing, Big Data and app development.

IT Education & Training Channel (May 2013): Advocacy group ICT Geelong has endorsed Deakin University’s development of a new business analytics course to cater for the growing demand from industry for skills in this specialty field. Typical candidates for an analytics course are managers and IT/IS graduates with some organisational experience.

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Independent (June 2013): Ireland's chronic IT skills deficit has been laid bare by the latest audit, which reports 4,500 vacancies in the booming sector, a finding that throws the national unemployment rate of 13.7pc into sharp relief.

Invest in Australia (July 2013): A new report on Australia's Information and Communications Technology (ICT) workforce points the way forward to delivering solutions to the nation's ICT skills shortage and boosting productivity in the digital age.

Irish Times (June 2013): Neelie Kroes, Vice President of the European Commission in charge of the digital agenda - Businesses and governments must join forces to bridge the gap between unemployed youth and the ICT skills shortage.

IT Web (July 2013): DC predicts the biggest stories in 2013 will concern South African and other sub-Saharan African organisations making use of technologies such as cloud, mobility, and analytics to increase efficiency in supporting their local and geo-expansion plans in other African countries.

MBIE Report (July 2013): CEO, industry body - The best guesstimate is that we will need twice as many people working in the technology industry – broadly defined – as we have today. The biggest bottleneck is the scarcity of people.

NBR Article (July 2013): New Zealand computer system design companies pay more than twice the average wage and have recorded faster growth in pay that the rest of the economy, yet increasingly they're reporting severe difficulties attracting workers.

NZ Herald (July 2013): ICT manufacturing, telecommunications, and information technology services collectively employed 73,392 New Zealanders last year, representing 3.2 per cent of the national workforce.

The Australian (July 2013): According to the Australian Computer Society a decline in undergraduates studying information technology and a skills shortage, rather than the overuse of 457 visas, is the issue facing the IT industry.

The Indian Express (July 2013): The skills shortage in the ICT sector is both an immediate and long-term concern in Australia. The ICT job numbers are expected to double between 1999 and 2015, while enrolments in training and education have fallen nationally by 55% over the last decade.

ZDNet (July 2013): Report recommends "a more strategic approach to work-integrated learning and the consideration of an apprenticeship/traineeship model for ICT skills". The report notes that graduates who complete an apprenticeship are 1.5 times more likely to find work.