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  • Writer's pictureEdwin and George

Australia falls behind on automation

"#Automation, such as machine learning, artificial intelligence (AI) and advanced robotics, have already started to transform the Australian economy and are set to reach scale in the next 10-20 years." (‘Australia’s Automation Opportunity:’ McKinsey, March 2019).

Great news.

An earlier report in 2017 by Google and research company AlphaBeta suggested that Australia could see huge gains through automation in the workplace:

"Technological change has long been a source of anxiety for workers. If we get it right, though, automation could significantly boost Australia’s productivity and national income – potentially adding up to 2.2 trillion Australian dollars in value to our economy by 2030 – and provide safer and more interesting jobs." (‘The Automation Advantage:’ Google and AlphaBeta, 2017).

So, what could 2030 look like? (figures are from McKinsey).

  • Between 25% - 45% of current work automated – bringing increases in productivity and economic growth

  • Between 2 -5 million workers impacted – needing to learn new skills and change occupations

  • More people affected than first imagined: not only those who perform routine manual activities, but also those in predictable, data-heavy analytical areas like engineering, accounting and computing

  • 20% of jobs in professional services totally automated and 30% in mining

  • New jobs created by the increased income generated: higher spending on health care, infrastructure and education

  • More demand for jobs requiring ‘human emotional skills’ such as nursing, care workers, salesmen and people leading others.

Automation comes at an interesting time for Australia.

Productivity and worker incomes have stalled. With increased competition from Asia, (but) a slowing China, the recent downturn in housing and an ageing population, it may just be the boost that keeps 30-years of economic growth going.

Currently though, Australia lags the rate of automation compared to leading countries in Asia:

‘More than half of Australian organisations have started to adopt AI, but strategies and capabilities remain immature and Australia is beginning to lag its regional neighbours.’ (‘Future Ready Business: Assessing Asia Pacific’s Growth Potential:’ Microsoft, April 2019).

The research found despite an acknowledgement of the potential of AI, Australian organisations have been reluctant to invest heavily in the technology. Organisations lack the skills, risk taking culture and leadership commitment to drive uptake.

As with the USA, UK and Europe, automation hardly appears on the political agenda. Perhaps it’s to do with complacency and a desire to maintain the status quo.

Australia must take the opportunities that automation brings. As well as a desire to get the best possible economic outcome, there is an air of inevitability about what is happening and a duty to support those who will be most impacted.

McKinsey suggest 10-steps that need to be taken by the Australian Government now.

These are a mix between stimulating a national debate, setting targets, driving economic incentives to encourage research and development. The steps also include measures to support workers adapt; including developing more innovation ways to encourage learning of new skills and incentivising redeployment of workers.

While there is a lot of apprehension about the whole subject of automation, it’s probably in everyone’s interests that we bite the bullet and get on with it.

We'd love to hear your thoughts!

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