Outgoing Head Suggests AI Could Help Resolve Australia’s Productivity Issues

As the Western world grapples with a decline in workplace efficiency, Australia’s departing productivity czar has highlighted artificial intelligence as a potentially influential force in triggering a noteworthy productivity revolution.

Productivity Commissioner Michael Brennan said AI was one of the technologies with the most potential to improve economic output in the coming decades, but stressed it was still in its infancy.

“If we were to see a recovery, a recovery of significant productivity growth in developed countries, I would imagine that artificial intelligence will probably be a key part of that,” he said in an interview with Bloomberg. Brennan will be succeeded by Chris Barrett when his five-year term ends in September.

A government report released on Thursday looking at trends over the coming decades predicted Australia’s long-term productivity growth would be 1.2 per cent a year, up from 1.5 per cent in the same report just two years ago. A drop in productivity of 0.3 percentage points cuts the estimated amount of GDP over the next forty years by almost 10%.

The report highlights that Australia is not alone – productivity in advanced economies around the world has fallen as the easy gains from technological advances begin to dry up. However, Brennan said he is optimistic about potential benefits in the future.

“We don’t yet know how far artificial intelligence and machine learning could go, but a moment’s reflection tells us that it has a lot of potential to help and increase the human workforce in many, especially service industries,” he said.

Market demand for artificial intelligence software and chips has caused the profile of companies associated with the new technology to rise in recent months, including chipmaker Nvidia, which is predicting massive profits for the three-month period ending in October. Meanwhile, governments around the world are weighing the benefits and dangers of AI technology.

Earlier in August, the Australian government extended a consultation on potential AI rules after significant interest from stakeholders. Industry and Science Minister Ed Husic told Bloomberg he hopes to complete the regulations by the end of 2023.

Brennan said he was confident the government would approach AI regulation in a “thoughtful way”, adding that the technology was not “completely risk-free”.

“But of course the counterbalance is that we want to be open to innovation here,” he said. “It will never fully replace or replace human judgment and control, but it can play a role, right?”