Google: AI could give Australia a $280 million boost, but SMEs lag behind

Google Australia’s 2024 Economic Impact Report claims that AI could add $280 million in economic benefits to Australia by 2030. However, small businesses are lagging when it comes to adoption.

The report also forecasts an additional $6.7 million in cybersecurity and $3.9 million in environmental benefits due to increased usage of AI in the country.

The findings in the report echoed similar sentiments to what we’ve heard for a while now — businesses that implement AI will be able to draw additional insights from data, will be more efficient, and save workers’ time by taking over routine tasks. It cited that 88% of businesses said AI has helped them save time and 81% said it has helped increase productivity.

However, it also pointed out its forecasted economic benefits would only happen if Australian businesses continued to adopt AI. While larger companies operating in Australia have been relatively quick on the uptake, SMEs have been much slower.

According to CSIRO’s latest AI Ecosystem Report, two-thirds of Australian businesses had implemented some form of AI technology as of mid-2023, with a further 23% planning on doing so.

However, most of these respondents were from mid and large-size businesses.

SMEs are lagging behind in AI adoption

A report from MYOB from December 2023 found that just one in five (or 19%) of Australian SMEs were utilising AI. This is notably smaller but still represents roughly 500,000 Australian SMEs

The survey revealed the most popular areas of AI use are social media and marketing post creation (49%), copywriting for marketing materials and press releases (34%), technical document composition (25%) and market and trend analysis (25%).

This makes sense as the majority of those can be created from either free or relatively cheap AI subscription services such as ChatGPT, Perplexity, Gemini, etc.

AI integration for smaller businesses becomes more complicated and expensive when it comes to more sophisticated offerings that go beyond simple generative AI content creation. This continues to be a barrier for SMEs, most of which don’t have an IT department let alone an AI expert to assist in integration and building.

Most will have to turn to third-party vendors for these services, which can be pricey from the outset or potentially lead to AI bill shock down the line.

But it does seem that a substantial portion of the Australian SME community is aware that they’ll need to embrace AI.  A recent study from Slack’s Workforce Lab revealed 60% of Australian executives report a high degree of urgency to implement AI in their businesses — 10% higher than the global average.

A recent survey from Schneider Electric found two-thirds of Australian SMEs increased their IT budgets this year — with almost half of the respondents predicting a need for substantial increases in AI investment over the next five years.

AI knowledge and training gap needs to be addressed

From Google’s perspective, closing the knowledge gap will be essential for effective AI adoption for businesses.

“Despite ranking highly in the IMF’s AI Preparedness Index, Australian businesses are concerned about how to keep pace with rapid AI advancements, including the challenge of deploying AI solutions that are compatible with their existing systems,” the report read.

“Businesses (both leaders and workers) need access to more information about AI — and to learn the skills to manage it. Training workers will be pivotal.”

This is backed up by further data from the CSIRO which found that talent shortages are a key barrier to AI adoption in businesses. The aforementioned Slack study also found only 35% of Australian employees have received guidance regarding AI integration — 43% lower than the global average.

But that doesn’t mean it is not being used on the down low. According to a study from Deloitte 66% of Australian workers are using generative AI without disclosing it to their employers.

Minister for Employment, Dr Andrew Leigh, addressed AI at a conference in Sydney this week where he spoke about the impact of AI on the labour market.

In his speech, Minister Leigh pointed to Seek data that found that demand for AI-related skills in job advertisements has significantly increased since 2017. However, AI jobs still represent a very small fraction of total job postings in Australia, declining to 0.17% in early 2024.

Our take

Google Australia is right to point out the need to train businesses and workers to foster AI adoption.

AI may have the potential to deliver $280 million in economic benefits in the next six years — but the industry is currently an unregulated cesspool that needs to be waded through first. And that’s before we even get to the amount of ‘AI washing’ and Web3-turned-AI startups that have also been thrown into the mix.

The desperate need for training is something the Albanese government has taken some steps to address. The 2024-25 federal budget made that clear, with $39.9 million being directed towards the safe and responsible adoption of AI.

This included $21.6 million over four years to revamp the National AI Centre (NAIC) and $15.7 million for AI policy development and regulation. Last year’s budget also saw $102.2 million over five years set aside to support businesses integrate AI and quantum into their operations.

Science Minister Ed Husic also announced a $17 million AI adoption program for SMEs back in December 2023 — though the announcement has been mistakingly attributed to an AI industry event last month.

Minister Husic also announced the establishment of an Artificial Intelligence Expert Group in response to the Safe and Responsible AI in Australia consultation back in February, in which the government opted for balancing innovation with risk management in AI applications in Australia.

The group will provide guidance regarding guardrails around the use of AI in high-risk settings.

Regulation and government-funded training are necessary steps, but given how fast this technology is moving versus laws (even more so than other kinds of tech), six years feels incredibly close.

It feels like we’re still so far away from SMEs being able to confidently and fiscally implement AI that is properly and safely integrated — as opposed to a few tools here and there used to spit out copy.

Given how many SMEs are constrained by time and resources, I’d love to see some more affordable and practical full-stack solutions.

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