Editor’s note: The ‘silver tsunami’ John Sheridan is discussing here is the knowledge retention challenge being brought on by ‘baby boomer’ retirement en masse: 2.5 million retirements over the next decade. It risks major losses in institutional memory, critical skill shortages, small business failures and macro-level impacts. He asks Australians, "What are we going to do about it?” and offers some critical “let’s get to work” suggestions – oh, plus a toolkit.

By John Sheridan, myRegion >>

AUSTRALIA is 74th (105th) out of 145 countries on the Atlas of Economic Complexity.

We sell minerals and seeds to the world.

We have knowledge and innovation knowledge in our universities and CSIRO, but we don’t share it effectively. We are just 72nd in the world for knowledge diffusion.

We have no clear national vision for the next 10 or 20 years, unlike most other nations on the planet.

And the skills we need, now, are not the skills we have. The advent of new technology is creating a demand for new skills that we currently don’t have … or have any channel or mechanism for generating.

Data literacy and analytics, automation and electro-mechanical systems, digital traceability, ag-tech and software system integration, artificial intelligence (AI) assisted workflow design, cybersecurity and digital risk management, remote operation management, circular economy and so on.

Each of these clusters assumes a baseline of literacy, numeracy and digital confidence that a meaningful share of the Australian workforce does not currently hold.

So that is another thing to think about.

The ‘silver tsunami’ is coming for Australia

On top of all of that, we have the ‘silver tsunami’ which will change the nature of our economy over the next 10 years.

Just another issue, largely ignored, that can be managed if looked at carefully – now.

The current peak wave for retirement is 2025–2035. Australia is undergoing a massive demographic shift with approximately 2.5 million Australians retiring over the decade, including roughly 710,000 who plan to exit full-time work within a narrow five-year window.

What does that mean?

It means we are about to lose institutional knowledge generated over decades.

Nearly 60% of Australian human resources professionals report that departing older workers trigger a distinct loss of key organisational skills, yet only a small fraction of businesses have formal knowledge-transfer processes.

The impacts vary across sectors and regions.

Critical shortages emerge in industries dependent on long-service expertise and technical know-how, such as the energy transition, construction, and specialised trades.

Australia is a small-and-medium enterprise (SME) country. About 97% of businesses are classified as SME-sized businesses.

So many privately owned Australian businesses face closure or failed sales upon owner retirement due to excessive owner dependency and poor documentation and succession planning.

And that adds up to impact at the national level that is largely ignored.

What are the silver tsunami’s consequences?

Unaddressed skill exits act as a structural handbrake on broader economic productivity and gross domestic product (GDP) growth.

Unlike large corporations with structured human resource departments, SMEs heavily rely on the personal knowledge, relationships, and technical mastery of their founders.

In many companies, the founder is the business.

Up to 78% of Australian small businesses aged 50 and over are built entirely around the founder. If the business exists only in the owner’s head, their retirement means the business essentially ceases to exist.

Around 40% of Australian SMEs have no formal business plan. Decades of operational workflows, client preferences, and supplier networks are rarely documented, leaving no roadmap for replacements

Nearly half (46%) of Australian SME owners expect their retirement to trigger the complete closure, liquidation, or forced sale of their business to an outsider.

Only a minority of family businesses successfully pass to the next generation. Less than 30% survive the transition to the second generation, often because children choose independent professional careers over taking over the family trade.

Buyers heavily discount or walk away from businesses with acute key-person risk. A lack of documented systems can strip 30% to 40% off the market valuation during due diligence.

Many Australian business owners mistakenly assume their business sale will entirely fund their retirement. When they realise the business cannot operate without them, they face inflated expectations and a lack of exit options.

In steps AI and modern ERP platforms

The rapid emergence of generative AI and modern enterprise resource planning (ERP) platforms is changing what ‘well-run’ means.

Business owners in their late 60s face a hard choice, fund a costly, decade-long digital rebuild or let their business quietly wind down. Businesses running on spreadsheets rather than integrated data systems trade at massive discounts.

Retirement-driven knowledge risk is not one problem.

It is at least five genuinely different problems, each requiring a different intervention design, with each recurring across multiple states independently. They can be summed up as:

Owner-operator agricultural and fishing succession, forced knowledge exit because of industry closure, founder led premium producer expert succession, capital city corporate knowledge concentration and First Nations intergenerational knowledge transfer.

The risk changes from sector to sector, and region to region. No one size solution fits all.

So, this is not a small problem. But it is an issue that can be managed successfully, if planned for now.

The challenge varies across sectors.

And across regions too. With the risk concentrated more in some regions than others.

So the ‘highest risk’ regions are where practical interventions and software solutions for knowledge risk should be started. With initiatives managed state by state, region by region, with strategies shared nationally.

What can we do about it and with what tools?

No single tool solves this problem.

Operational know-how, client trust capital, equipment workarounds and forecasting intuition each need a different capture method, and businesses that try to force all four into one platform (a wiki, a training LMS) typically lose the nuance that made the knowledge valuable in the first place.

Second, the software tools required are genuinely accessible to small businesses — most categories have usable free tiers or sub-$100/month entry points, meaning the constraint on action is rarely cost.

It is almost always that nobody has been given the job of doing the capture before the retirement date arrives.

There is a lot of assumption involved here, both with the retiree (“You already know this don’t you?”) and the managers taking over the role (“I don't know what I don’t know.”)

So how is the ‘silver tsunami’ going to impact your business? Have you already got this under control?

Is this under control in your sector? Your region?

Australia?

Australian digital platform designed to help

There is an Australian digital tool developed for this challenge. [It is named myRegion and it has been developed over many years by Digital Business insights, a company that is allied with Business Acumen magazine.]

The myRegion SME Tool shows 400 business categories across 19 sectors the challenges, software tools and how to use AI – and can be used, right now, for free. [Click on the myRegion Business Intel tab at the top of the Business Acumen homepage.]

For $55 a year membership, the retirement and knowledge risk summary is outlined for every category. These summaries show what is at risk for businesses across these sectors and offers practical first steps to protect it.

For councils, associations, RDAs, State and Federal Government departments, myRegion has created in-depth reports for all 19 industry sectors and 50 regions. For myRegion to assist such public service organisations it is best to get in touch initially by phone or email.

The ‘silver tsunami’ can be managed. We have time.

But like all of Australia’s bigger issues – economic complexity, tech skills gap, supply chain risk and more – it will require vision, decision and action.

And we tend to be not so good at that. 

John Sheridan is the CEO of Digital Business insights (DBi) whose latest platform, myRegion, aims to assist regions to connect and develop their local economies while becoming part of the platform’s Australia-wide knowledge diffusion and collaboration process. Digital Business insights has been researching, collecting and measuring data while producing reports and comment on the digital technology channels of the Australian economy for more than 25 years. DBi and myRegion have an editorial alliance with Business Acumen magazine. www.myREGION.au. www.db-insights.com.

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