They’re supposed to be the most desirable candidates in the employment market: the saviours of services-driven economy, the diviners of economic growth.
And yet individuals with education and backgrounds in science, technology, engineering and mathematics, remain underemployed compared to the broader population.
The situation — known as the “STEM Paradox” — is real and it’s the reason the economy is stuck in neutral.
No matter how low the Reserve Bank of Australia takes interest rates, or how many more steel production plants China turns back on, the STEM Paradox continues to be the biggest impediment to the economy moving forward.
While public policy boffins continue to scratch their heads looking for solutions to break the nexus, the headline numbers show the paradox remains alive and well.
Healthcare graduates fare quite well and mining engineer graduates are still faring well too, but all other graduates in the STEM industries rank below the average outcomes for graduates as a whole, in some cases by large margins, according to a new Productivity Commission report published in June.
For instance, the “underemployment” rate in information technology and engineering and related technologies respectively is around 3 per cent and 6 per cent for graduates.
Graduates with mathematics and computer science qualifications have employment outcomes that are just below the average underemployment rate, although those numbers do improve significantly three years after graduation.
Recent evidence shows that nearly one in five people with bachelor degrees in the natural and physical sciences have not got a full-time job, according to Graduate Careers Australia data to the end of 2015.
Moreover, a significant share of people completing STEM degrees and in full-time employment are not using their qualifications as part of their main job.
For example, around 30 per cent of people with an information technology qualification do not think their IT knowledge is relevant to their job, compared with around 25 per cent of those completing a bachelor’s degree in the natural and physical sciences, according to Graduate Careers Australia data.
One in two people with university qualifications in science are actually professionals in their field, and that number is closer to 60 per cent for those qualifying in mathematics, according to Australian Bureau of Statistics data and data from the Office of the Chief Scientist.
This may not be a problem per se if their skills bring benefits to management, the Productivity Commission notes, but it says many more work in areas unlikely to involve their technical skills.
Outcomes for those who have completed postgraduate degrees run along the same theme — 15 per cent of postgraduate students available for full-time work in the natural and physical science field did not have full-time work three-years after graduation, a statistic that places this group considerably below the average. And of those who did get such work among the postgrads, about 15 per cent did not think their qualification was relevant.
The STEM Paradox goes beyond graduates; there are also mid- and even senior-level professionals who are struggling to find employment or are stuck in low-growth industries as they upskill and transition into careers to better position themselves within the new economic paradigm.
Mining engineers leaving the sector and looking for work in faster growth sectors are creating supply-side problems for companies inundated with mining engineering candidates retooling their skills to meet the demands of the new economy, explains Peter Gahan, University of Melbourne professor of management and founder of the university’s Centre for Workplace Leadership, in conversation with Finsia’s InFinance.
This situation is exacerbated by a similar supply-side glut globally as more mining engineers come out of China, Gahan says.
Meanwhile, companies seem reluctant to work with individuals to repurpose their skills, Gahan adds.
“It takes time for people to reimagine their careers and augment their tool kits. For instance, there’s not the blending of finance and engineering happening that there should be,” he says.
“Companies could be doing more,” Gahan comments.
Gahan also directs his comments towards companies in relation to graduates seeking their first jobs as well as professionals transitioning careers.
“Businesses are not looking at STEM graduates the right way yet,” he says.
He points to Australia’s burgeoning fintech start-up sector as an area that could be tapping recent graduates with engineering, technology and mathematics backgrounds.
A STEM world
And all of the evidence collected by governments and consultants examining the disruptive effects technology is having on our lives and on our workplaces suggests companies would do well to do more to address the STEM Paradox.
Overall, individuals with STEM backgrounds and training are able to be better problem solvers in technology-rich environments — they’re better equipped for new business models, new markets and new sources of economic growth, academics suggest.
While putting numbers around the direct benefit STEM contributes to the economy is far from precise (and some say dubious) there are some examples: 65 per cent of Australia’s economic growth per capita can be attributed to improvements in the use of capital, labour and technology innovation largely made possible by STEM in the 40 years to 2005, according to the Office of the Chief Scientist.
Meanwhile PwC reckons that shifting 1 per cent of the workforce into STEM roles would add $57.4 billion to GDP (net present value over 20 years ignoring the costs of implementation).
While some might disagree on the exact measurement of the benefit, the consensus overall is that we’re entering a world where STEM will be increasingly important.
The Productivity Commission report draws on academic and market research, identifying a series of areas where skills are needed to propel the country into the new technology and information age.
Data scientists with manipulation and statistical analysis skills will be required to handle the rapid collection of large data sets that has led to the need for big data modelling.
Big data sets have given rise to the development of machine-to-machine learning and artificial intelligence, increasing the demand for high-level maths and computer programing skills.
Advanced manufacturing, composites, robotics, nanotechnology, and the advent of 3D printing are increasing the need for designers and engineers who are capable of using certain computer software and have a greater understanding of material science and quality assurance systems.
The second machine age
Meanwhile, in the energy sector, the emergence of household solar photovoltaic, battery storage and smart metering will require installation technicians for connection and maintenance of this infrastructure.
In the throes of the federal election both major parties are making some of the right noises, albeit STEM now seems to be akin to a political slogan.
Aside from the incentives wrapped up in the National Innovation and Science Agenda, the Australian government has committed $12 million of extra funding to foster primary and secondary student engagement with STEM, a “mathematics by inquiry” programme for primary and secondary schools, a “coding across the curriculum” programme, the provision of seed funding to pilot an innovation-focused “P-TECH” styled education facility for secondary schools, and summer schools for STEM students.
Whether these measures are enough depends on your view on how disruptive technology will ultimately be to the workforce as we know it today.
The Productivity Commission notes some theorists have termed the current era of technology disruption as the “fourth industrial revolution” or the “second machine age”, while others will argue that the introduction of electricity, the telephone and the motor vehicle introduced between 1870 and 1970 had a far greater impact on the standard of living and workplaces than technology will today.