Queensland should focus on getting its skills and regulatory settings right to take advantage of the productivity potential of artificial intelligence (AI), as global investment in the technology accelerates.
Productivity Commission Chair Danielle Wood told Queensland Futures Institute (QFI) members and invited guests at the Economic Outlook forum in Brisbane that AI represented a significant opportunity to lift Australia’s sluggish productivity growth.
Asked what Queensland could do to improve productivity, Ms Wood nominated the policy settings around AI as a priority.
“I do think getting the regulatory and skill settings around AI [right] is, because that is where I think the upside is,” Ms Wood said.
“That kind of set of things that I talked about for policy and AI is probably where I would be putting my time and attention.”
The Productivity Commission estimates that efficiencies from AI could add around 4% to Australian labour productivity over the next decade. Ms Wood said the potential uplift was significant against a backdrop of productivity growth of around 0.3% a year.
While Australians had embraced AI as consumers, she said adoption by businesses was lagging some comparable economies and tended to involve relatively basic uses rather than fundamental changes to business processes.
ANZ Chief Economist Richard Yetsenga told the forum the scale of investment flowing into AI globally also presented a major opportunity for Australia.
He cited projections of around US$3.5 trillion in global AI expenditure next year, which he said was nearly twice the size of Australia’s GDP and more than 12 times its current level of business investment.
“I think Australia could get about as much of that investment as it wants,” Mr Yetsenga said.
Mr Yetsenga said Australia’s geographic position was becoming an advantage as concerns increased about geopolitical risks and global trade chokepoints.
“This tyranny of distance has almost turned into Australia’s terrific distance,” he said.
He also pointed to Australia’s submarine cable connections, which provided a high level of international connectivity, while arguing that developing domestic AI capability had strategic as well as economic benefits.
QFI CEO Steve Greenwood said the discussion highlighted the importance of considering AI as part of Queensland’s broader productivity agenda.
“AI is clearly going to play an increasingly important role in Australia’s economy, and the discussion at the forum highlighted the importance of Queensland being ready for that change,” Mr Greenwood said.
“Getting the skills and policy settings right will be important if Queensland businesses are to capture the productivity benefits while the state manages significant competing demands for skills and infrastructure.”
The QFI forum, Queensland’s Economic Outlook: Growth, Investment and Reform, featured Ms Wood alongside Mr Yetsenga and Mr Molloy.