Developments in areas such as globalisation, digitisation and sustainability will pose challenges for accountants, as they are required to adapt their skills and compete in bigger markets. But, those developments also present a variety of new opportunities.
The new opportunities stretch right across the spectrum of human activity, from small business digital strategy and the prevention of money laundering to measurement of environmental impacts such as carbon emissions.
Demand for skilled jobs
Put simply, career prospects for accountants and other professional services workers are good. In its report, Australian Jobs 2012, the Department of Education, Employment and Workplace Relations shows that there is a clear trend towards highly skilled jobs, especially in professional services.
Over the five years to the end of 2011, the strongest employment growth was recorded at what the department calls skill level one, which means a bachelor’s degree or higher qualification. Job numbers at that skill level grew by 15.9 per cent. The lowest growth in employment (just 2.4 per cent) was for occupations at skill level five (compulsory secondary education).
This is a long-term trend. Since 1990, employment growth for jobs that require
a qualification at the diploma level or higher has outstripped growth in low-skilled jobs
by a wide margin.
The department expects that more than half the projected growth in jobs over the next five years will be in highly skilled occupations, including professionals, technicians and community and personal service workers. There will also be plenty of new jobs for clerical and administrative workers and managers.
This is a virtuous circle for accountants – more jobs in the profession and also more jobs in areas where there will be demand for professional services.
Research by the University of Canberra’s National Centre for Social and Economic Modelling (NATSEM) supports the view that the trend to highly skilled work will continue. In a report published in October 2012, Smart Australians, it says participation in tertiary education has increased substantially over the past few decades. More than 44 per cent of people aged 25 to 34 have completed tertiary education, compared with 29.6 per cent of people aged 55 to 64. In the past decade alone, the number of people in the community with a university degree has increased from 17 per cent to 23.7 per cent.
Looking to Asia
The economic environment in which accountants operate continues to change. They will continue to use their core skills but will be applying them in new geographies and new fields.
In its September 2012 study, Imagining Australia in the Asian Century, Boston Consulting Group (BCG) reports that Australia’s non-resource exports to Asia were worth $65 billion in 2011. Services made up about one-third of that total and had increased by 16 per cent since 2001.
The bulk of services exports are education and tourism, but business services exports have been growing fast, at around 50 per cent between 2001 and 2011. BCG estimates that non-resource exports to Asia could grow by a further $27 billion by 2021 if Australian businesses develop an ‘Asia-capable’ workforce.
The report says: “There is no algorithm for capturing the Asian opportunity. However, our case studies have identified several themes. Customers prize a firm’s ability to customise their product or service to local preferences.
“Relationships are critical. Firms must build relationships with partners and customers if they are to gain advantage from their intellectual property.
“Finally, there can be no pan-Asian approach. Asian markets are diverse and dynamic, and customer requirements differ.”
In its White Paper, Australia in the Asian Century, the Australian Government says accounting, legal, engineering and design services will be supplied increasingly across borders. It also says professional services firms have a big role to play in helping other businesses become part of the region.
Globalisation hits home
Businesses don’t have to go offshore to feel the impact of globalisation.
Over the past few years, industry regulation has started to take on a global flavour. The most obvious examples are the Basel III banking regime and the International Financial Reporting Standards (IFRSs). Tax regulation has also gone global, with the introduction of FATCA (Foreign Account Tax Compliance Act), and Australia’s anti-money laundering rules have to dovetail with the policies of the global body, the Financial Action Task Force.
These issues might seem of concern only for large businesses, but it is worth noting that 13,000 businesses are enrolled as reporting entities with Australia’s
anti-money-laundering regulator, the Australian Transaction Reports and Analysis Centre (AUSTRAC).
When it comes to the digital economy, Deloitte Access Economics pointed out in a recent report, Connected Small Business, that SMEs must “make measurement
part of the digital strategy” if they are going to succeed. There is a clear role here for business advisers.
The report says: “At the low end of the digital continuum, small businesses are characterised as having ad hoc or inconsistent approaches, while those at the high end are adaptive and base changes on a clear strategy and strong analysis of what is or isn’t working.”
Earlier in 2013, business forecaster IBISWorld identified two online sectors as markets for strong future growth – online education and online retailing. IBISWorld estimates that revenue for Australia’s online education industry will increase by around 10.5 per cent a year. Growth is being supported by the continued uptake of high-speed internet services, growing acceptance of online education, government support for students and efforts to expand access beyond the typical school-leaver group. When it comes to online retailing, IBISWorld’s general manager, Karen Dobie, says online retailers are increasingly moving into bricks and mortar, offering their customers greater convenience by providing accessible pick-up and return locations.
Another emerging area where accountants can play an important role is helping their clients avoid cybercrime. According to the 6th PwC Global Economic Crime Survey, published in March 2012, 45 per cent of companies had experienced economic crime in the previous 12 months. Rapidly rising cybercrime was the second most reported economic crime (the theft of assets or funds was number one) and accounted for a third of all economic crimes.
Sustainability remains a challenging business issue. Businesses are asking their advisers to help them combine growth while meeting government and consumer demands for reduced environmental impacts. Someone has to put the ‘accounting’ in such programs as the National Carbon Accounting System. Recent technical articles appearing on the Australian Accounting Standards Board’s website cover topics such as the financial reporting implications of the fixed price phase of the carbon pricing mechanism.
The Government’s Australia in the Asian Century White Paper says one of this country’s pathways into Asia is to support the development of environmental accounting in the region.
So, the future holds a range of new and exciting opportunities for the accounting profession. The challenge now will be how quickly and efficiently accountants can respond to meet the needs of a fast-changing economic world.
