Artificial intelligence could play a decisive role in lifting Australia’s future living standards, but only if the country takes a strategic approach to investment and control, according to the UNSW AI Institute.
Dr Sue Keay, Director of the UNSW AI Institute, said productivity growth remains closely linked to quality of life and that artificial intelligence may be a key driver in reversing stagnation in efficiency gains.
“Productivity can be directly linked to our standards of living. And so typically if you start to see productivity stagnating, then that can influence how much we can afford to buy from other countries and generally how comfortable we feel with the wage that we’re all receiving,” Dr Keay said.
She said there are limits to how much productivity can be improved through human effort alone, noting that most historical gains have come from technology rather than labour inputs.
“There’s a limit to how much you can improve a country’s productivity just through labour productivity alone, because I’m sure people probably don’t feel that they can work that much harder than they currently are,” she said.
“The main way that we’ve seen a lot of productivity improvements in the past has been related to technological advances.”
Speaking on UNSW’s Engineering the Future podcast, Dr Keay said artificial intelligence could help automate repetitive tasks, improve operational efficiency and support decision-making across both public and private sectors. She also said the technology may assist in addressing labour shortages by enabling organisations to operate with fewer constraints.
“The opportunity with artificial intelligence is that both at an individual level and at a company and governmental level, they can be applied across a whole range of functions,” she said.
“If you can start to scale a lot of those solutions and in particular areas where we find it difficult to find people to do work, then that’s obviously an advantage.”
However, she cautioned that Australia risks missing out on the economic benefits if it does not actively engage with the technology’s development and adoption.
“It really isn’t an option for us to just bury our heads in the sand and hope that this technological change won’t impact on us. We have to figure out how we can harness the benefits,” she said.
Dr Keay also raised concerns that artificial intelligence could function as an “extractive” industry if value creation remains concentrated offshore, with much of the technology developed and monetised by overseas companies.
“The people who are leading the development of these tools and making all of the profits from them are not Australian companies,” she said.
She noted that Australia currently relies heavily on imported AI technologies, particularly from the United States, and warned this could have longer-term economic implications if not addressed.
“We are purchasing most of our artificial intelligence, particularly from the US, and yet those companies we know tend to pay very little tax here in Australia,” she said.
“That will have devastating consequences unless we find ways to either develop alternatives, and really invest in Australian AI as a competitive advantage to make sure that we are generating Australian tax-paying companies to support our workforce.”
Dr Keay also highlighted data sovereignty as a key factor in ensuring Australia can fully benefit from artificial intelligence development, arguing that greater control over data could enable the creation of locally relevant AI systems.
“If we have more control of our data, then that lends itself for us to be able to build our own AI-specific models that are beneficial to us and not necessarily to anyone else,” she said.
She added that Australia should be cautious about allowing unrestricted data flows without safeguards, warning of potential consequences for national autonomy.
“We can’t be powerless or give up our agency to other countries unless we’re prepared to potentially lose our sovereignty.”
