A new report says Australia’s manufacturing sector could unlock billions of dollars in value by 2030 if it accelerates the responsible adoption of generative artificial intelligence (GAI).
The report, Australia’s Generative AI Opportunity, is a collaboration between Microsoft and the Tech Council of Australia. It shows that GAI could contribute between $45 billion and $115 billion a year to Australia’s economy by 2030 through two major channels: improving existing industries and enabling the creation of new products and services.
Manufacturing has been identified as one of the four key sectors of the Australian economy poised to benefit from GAI. The report demonstrates that the technology could contribute between $2 billion and $5 billion annually to the manufacturing sector by 2030.
Kate Pounder, Chief Executive Officer at the Tech Council of Australia, said the report underscores the enormous economic potential of GAI for the manufacturing sector. However, she warned that the sector risks falling behind other industries in the adoption of this technology if it fails to accelerate its digital transformation.
“Australia’s manufacturing sector is at an inflection point,” Pounder said.
Unlocking the potential benefits of GAI for manufacturing
AI is already applied by manufacturers in areas such as predictive maintenance (where data is used to enable manufacturers to predict equipment failures or maintenance needs), quality control (systems that can detect product defects or anomalies) and robotics (where AI is used to automate repetitive and labour-intensive tasks).
GAI technology can further uplift the sector by using data patterns to generate new content such as images, text or designs. This can impact manufacturing areas where AI hasn’t been used, including designing or recommending products based on trending features, upskilling apprentices and technicians, and automating supply network controls.
For managers in the manufacturing sector, the report estimates that GAI could automate approximately 30 per cent and augment 19 per cent of tasks, leaving more time for complex and strategic activities. It can also enhance the on-the-job learning for technicians – who comprise 27 per cent of the sector’s workforce – and trades workers through rapid upskilling and training.
However, the report cites several challenges facing the sector in its adoption of GAI. While 72 per cent of manufacturers have increased their digital transformation efforts throughout the COVID pandemic, only 20 per cent currently use AI. If this is not addressed, the industry’s lagging investment in digital technologies could cause it to fall behind other sectors in harnessing the full potential of GAI.
Lee Hickin, Chief Technology Officer at Microsoft Australia and New Zealand, said: “We’re proud to partner with the Tech Council on this timely report. Generative AI has emerged as a transformative technology in 2023, with its adoption growing rapidly across various sectors in Australia. There’s a huge opportunity for the manufacturing sector as it deploys generative AI to support workforce transformation, enhance smart factories and supply chain resilience, and accelerate innovation.
“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.”
The other three key sectors identified in the report are healthcare, retail, and professional and financial services. The report details potential use cases for GAI in each of these sectors and the subsequent economic value that could be generated using the technology.
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 to 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, assessing readiness, incentivising adoption and innovation, upskilling the workforce, and developing responsible AI governance frameworks.
To learn more, read the report here.