Generative AI pegged to contribute billions to economy

Generative AI (GAI) could contribute as much as $115 billion to the Australian economy by 2030, provided the country accelerates responsible adoption, according to a new report.

The report, titled Australia’s Generative AI Opportunity, is a collaboration between Microsoft and the Tech Council of Australia and its authors say that growth will be possible through two major channels: improving existing industries and enabling the creation of new products and services.

How much of this potential value is captured depends on the pace at which GAI is adopted across all industries and how well workers are supported to transition to other tasks.

Kate Pounder, CEO of the Tech Council, said the report highlights the far-reaching potential of GAI across Australia’s economy.

“In this time of high inflation and low productivity growth, our economy needs a productivity shot in the arm.

“Emerging technologies like generative AI are going to be a big part of the solution.

“The report shows the enormous potential for generative AI to catalyse growth and innovation across a wide range of sectors, shaping a prosperous future for our nation.

“Making the most of this opportunity will require a collaborative effort across government and industry, particularly to upskill our workforce, provide regulatory clarity and drive uptake of responsible AI practices,” Pounder said.

The report estimates that in the slow-paced adoption scenario, GAI could contribute $45 billion annually to the Australian economy by 2030. Modelling of the medium- and fast-paced adoption scenarios show that this figure could rise to $75 billion and $115 billion, respectively. This range is equivalent to 2 to 5% of the Australian economy.

Most of these gains ($30 billion to $80 billion) would result from increases in workforce productivity through the automation of routine tasks, according to the report. The augmentation of tasks using GAI as a ‘co-pilot’ is expected to deliver between $10 billion and $25 billion in economic value.

On average, GAI has the potential to automate and augment 44% of Australian workers’ task hours at its current level of capability. This would enable workers to focus their time on higher value-adding tasks and increase the quality of their output.

The report also estimates that new products and services created using GAI will power new jobs and businesses, collectively contributing between $5 billion and $10 billion to Australia’s economy.

“However, Australia must ensure swift and responsible adoption of generative AI to fully capture the depth and breadth of this opportunity,” Pounder said.

Unlocking the potential benefits of GAI in four key sectors

The report identifies four key sectors of the Australian economy that are poised to benefit from GAI: health care, manufacturing, retail and professional and financial services. It details potential use cases for GAI in each of these sectors as well as the subsequent economic value that could be generated using this technology.

For example, GAI can enhance the quality and accessibility of health care by reducing administrative tasks, which allows more one-on-one patient care. It can also improve the personalisation of health care by being embedded in wearable devices, as well as support the transition towards more proactive models of care by enabling earlier and scalable diagnoses.

“We’re proud to partner with the Tech Council on this timely report. Generative AI has emerged as a transformational technology in 2023, with its adoption growing rapidly across various sectors in Australia,” said Lee Hickin, Chief Technology Officer at Microsoft ANZ.

“Microsoft is committed to fostering closer collaboration between industry and government to ensure the nation can realise the potential economic benefits of generative AI, and do so responsibly. Building trust in this technology is critical to harnessing its innovative capabilities and enabling Australia to become a global leader in this space.”

Leveraging Australia’s comparative advantages and taking strategic actions

The report notes that industry and government are at a critical juncture in GAI adoption, with deeper collaboration needed for Australia to capture the economic benefits of this technology and become a global leader in GAI.

Leveraging Australia’s comparative advantages in digital technology is key to spurring this collaboration. They include a large and highly skilled tech workforce, strong investment in digital infrastructure and a high level of cloud computing adoption.

The report — which is based on comprehensive economic analysis as well as consultations with industry, government and academia — also identifies the barriers that industry and government face in capitalising on GAI in four key areas: technology capability, enterprise readiness, awareness and skills, and responsible AI.

Finally, the report outlines the strategic actions that both adopters and policymakers need to take for Australia to overcome these challenges and become a global leader in GAI. These include defining the opportunity and vision for GAI in Australia, assessing readiness, incentivising adoption and innovation, upskilling the workforce and developing responsible AI governance frameworks.

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