CANBERRA, 11 August 2026 - For Immediate Release
The latest ACS Australia’s Digital Pulse 2026 Report themed 'Now Shapes Next' reveals Australia’s technology sector has reached a critical impasse. While digital skills in the workforce contributed an unprecedented $476 billion to the national economy in 2025, and the tech sector’s direct economic contribution grew 5 per cent to $142 billion, Australia’s tech workforce shrank for the first time on record.
Prepared by Deloitte Access Economics, the 12th edition of the flagship report quantifies the decline at 0.3 per cent, taking Australia’s technology workforce to 967,000 workers in 2025. Despite this short-term volatility, the report confirms Australia will need an additional 259,000 technology professionals by 2035, growing at twice the rate of the broader workforce in order to support rapid AI adoption and to maintain national competitiveness.
Highlighting a fundamental shift in the talent pipeline, the report reveals that over the past five years, 40 per cent of new workers entered the workforce via alternative pathways. This includes 55,000 workers upskilling through workplace training, 44,000 entering with industry-recognised credentials, and 34,000 coming through self-directed learning.
While the report is aligned to the Government's ambitions that AI should support workers rather than replace them, it emphasises that having the skilled technology professionals needed to build, govern and secure these systems will be essential to achieving Australia's national AI goals.
In the report, launched today by the Deputy Prime Minister and Minister for Defence, the Hon. Richard Marles MP, Mr Marles highlighted the importance of preparing Australia’s workforce for the next wave of technological change.
“As AI continues to reshape the way Australians work, our task is not to fear that change, but to ensure people have the education, training and recognised professional skills to succeed, while building sovereign capability in those critical technologies where Australia can make the greatest contribution, working alongside trusted international partners,” Mr Marles wrote. “This report is a timely contribution to the choices governments, industry and educators must make now to ensure Australia has the people, expertise and capability to shape the next wave of technological change with confidence.”
Key Findings:
- The tech sector generated $142 billion in FY25 (+5 per cent real growth), while tech exports rose 13 per cent to over $12 billion. Digital skills in the broader workforce contributed $476 billion in 2025.
Tech employment fell 0.3 per cent to 967,000 in 2025. However, technical, professional, and management roles grew while trade and administrative roles declined.
Australia will require 259,000 additional tech workers over the next decade, growing at twice the rate of broader employment.
70 per cent of tech workers' tasks are now impacted by AI.
The Productivity Commission estimates AI adoption is worth $116 billion to the economy over the next decade. Australia needs an extra $13 billion a year in private AI investment to match leading digital economies.
40 per cent of tech entrants over the past five years came via alternative pathways, including workplace training (55,000), industry credentials (44,000), and self-directed learning (34,000).
Skills Framework for the Information Age (SFIA) accredited training delivers an average wage premium of 7.3 per cent, equivalent to $8,600 annually for the average tech professional.
The gaming industry generated $609 million in revenue in 2025, presenting an enticing entry option for younger Australians into tech careers. However, participation in school technology courses has declined significantly, falling from 36 per cent of students in 2012 to around 28 per cent in 2024.
"Technology alone won't deliver Australia's AI agenda. Every outcome depends on capable, trusted professionals," said ACS Chief Executive Officer, Dr Prins Ralston. "These findings warn that our skills gap will widen without immediate action. In the age of AI, clarity about human capability is just as critical as standards and regulation. We must take action now to ensure technology professionals are equipped with the skills required to enter and support the workforce."
“Anybody can put an AI model into a hospital. We have spent a year deciding how Australia will govern AI. We still have not decided who is qualified to do it.”
Dr Ralston said the gap could be closed using existing instruments. “The Security of Critical Infrastructure Act already recognises negligence, alongside malice, as a personnel hazard. Yet the framework tests only trustworthiness, not competence. We ask whether a critical worker can be trusted, but not whether they are qualified. Negligence is a competence issue, and competence is not tested anywhere in the regime.”
ACS President, Beau Tydd, added: "Entry into tech careers is no longer defined by a single route. While alternative pathways broaden our talent pool, professionalisation provides the shared language and trusted credentials needed to ensure skills are recognised, portable, and built to high standards across the entire economy."
8 Policy recommendations to achieve digital leadership
To manage this transition and ensure Australia remains competitive, resilient, and trusted, Digital Pulse 2026 sets out eight core policy recommendations across three priority themes:
Developing the AI ecosystem
1. Promote Australian SME AI investment, by providing a one-year $1 billion SME AI investment boost featuring a 50 per cent tax deduction on AI training, strategy, and technology expenditure for businesses with turnover under $50 million.
2. Build AI capabilities in areas of competitive advantage by establishing a review of sovereign IT risk to guide a core technology fund and pursue a more coordinated approach for data centre infrastructure planning approvals for regional data centre infrastructure.
Building a professional and skilled workforce
3. Promote workforce professionalisation by driving consistent capability standards using frameworks like SFIA across government and industry recruitment and procurement criteria.
4. Establish a national commitment for 20 per cent of entry-level tech hires to come via alternative pathways by 2030, supported by an 'earn while you learn' digital cadetship pilot and greater government support for employer-funded accredited training.
5. Ensure migration settings address Australia’s digital skill gaps by refining visa pathways and occupation lists to ensure skilled migration effectively complements domestic training and fills critical high-value tech shortages.
Developing the longer-term pipeline
6. Improve retention of women in tech by addressing structural barriers through inclusive, flexible workplaces, return-to-work pathways, and mid-career gender targets to retain female talent.
7. Support teachers with digital capability by creating a digital educator uplift fund, set Year 12 tech course participation targets, and roll out STEM labs across schools to rebuild the student pipeline.
8. Harness gaming as a gateway to STEM and support educators to use game design and development as a creative, accessible vehicle for teaching the Digital Technologies Curriculum.
John O’Mahony, Partner, Deloitte Access Economics, commented: “We are proud to have supported ACS with this important report. As Australia's technology sector navigates this pivotal stage, gaining clear evidenced-based insights ensures a fair and accurate representation of an industry that underpins our national economy.”
In order to seize our local AI advantage, we need to give Australians in every workplace the digital skills they need to thrive. By backing our workers, expanding new training pathways, and investing in our people, we can bridge the skills gap, drive real economic growth, and ensure no business or worker is left behind in the AI era.
The ACS Digital Pulse report continues to serve as an essential resource for policymakers, businesses, and educational institutions as they shape the future of Australia's digital economy. Copies of the report and full recommendations can be downloaded from www.acs.org.au/digitalpulse.
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Further information
Troy Steer
Director of Corporate Affairs and Public Policy
M – 0417 173 740
E – troy.steer@acs.org.au
About ACS
ACS is the voice of Australia’s technology sector, representing over 42,000 technology professionals across all industries and across the nation. Our members work in industry, education, government, and the community delivering the digital services that drive the nation and provide the high-skilled jobs of today and tomorrow. ACS works to grow the technology sector while making sure IT professionals act ethically, responsibly, and in keeping with the best interests of not only their employers, but the wider community. Through our network of branches in every state and Territory, our innovation lab, education programs and our history of over sixty years, ACS works to help all Australians be part of the nation’s highest growth sector. Visit www.acs.org.au for more information.