ASKED ”What will you be when you grow up?” Australian children would be expected to reply with any of a number of occupations: builder, doctor, pilot, teacher. It would be unusual, but far more realistic, for a child to call out customer service officer, business development consultant.
The services sector employs more Australians than any other. Filling the offices of city buildings and spilling into suburban office complexes, services workers account for roughly 70 per cent of Australia’s economic activity, and 16 per cent of our exports. They are engaged in collecting, processing and analysing data – the backbone of the ”information economy” to which Australia supposedly aspires.
These jobs are just as real, and just as vital to our national interest as those requiring hard hats and high-visibility vests, but they are being forgotten in the debate over industry policy. Largely left to market forces by state and federal governments, jobs in the Australian service sector are under threat.
Each year, more than 21,000 skilled services and finance jobs are lost offshore. Australian companies, perhaps hoping for a quick boost to share price, move their data management and customer service divisions offshore, usually to a state-supported services investment hub in Asia. There, firms exploit immense labour competition, cheap access to infrastructure and proximity to the AEST time zone.
To expedite servicing from these offshore departments, firms may also offshore customer details including personal information, financial records and spending data, storing this data beyond the protection of Australian privacy law.
The jobs we are losing are skilled and valuable jobs, often involving data handling and customer interaction. They disappear largely without comment, unmarked by media interest around factory closures, in a constant trickle rather than in floods.
The Australian Services Union and the Finance Sector Union, which together commissioned the only existing research into the problem of services offshoring, report Australia has lost more than 80,000 services jobs and unknown terabytes of sensitive data in the four years since we last raised the issue with government. This week, armed with fresh data, we raise it again.
The loss of 20,000 quality services jobs next year, and again the year after that, is avoidable if governments take action to support our service economy.
We need a service sector plan: a strategic approach to develop service skills and business like we have for industries such as manufacturing. Infrastructure including the NBN can form part of that plan, but we must determine how best to leverage this infrastructure to build competitiveness and productivity. Approached without care, technical infrastructure will only serve to disaggregate business functions and make it easier to move jobs offshore.
In the short term, Australia can stem the tide of ”investor relations” offshoring – brief, expensive ”cost-cutting” experiments in offshoring – by offering a more favourable tax treatment for companies retaining work in Australia. Encouraging business to develop Australian competency will ensure our skills base is not irretrievably hollowed out over the business cycle.
In light of the data sensitivity of services jobs, government must also consider country-of-origin legislation, to protect consumers’ right to know where their data is stored. The right-to-know principle recognises that consumers should be alerted in advance when firms consider moving services and data offshore, as there can be no consent without knowledge. Particularly where an Australian firm has moved skilled services and customer relationship jobs offshore to cut costs, consumers are right to question what security precautions have been taken.
At the very least, government should be leading the way with a responsible procurement policy.
These aren’t simple solutions, but this is not a simple problem. The skilled information workforce we seek won’t simply emerge from the ashes of collapsed factories without investment of time and consideration by government and businesses, and neither is likely to shift from the status quo without the urging of Australian consumers.
We must call on both to invest in a plan for our services industry.