David McClure
September 26, 2018

We must move rapidly on AI

AI

We must move rapidly on AI

Big decisions: Australia must make building a national AI capability a priority

Australian organisations need to move more rapidly into using artificial intelligence applications to automate and augment manual processes, as well as skilling up an AI workforce as the technology becomes as fundamental to society as basic utilities like phone networks or electricity.

“We are a fair way behind the rest of the world at the moment,” says PwC Australia Analytic Intelligence Leader John Studley. “It is here though, and some organisations are making a start.”

Mr Studley points to the oft quoted Automation Advantage report that was produced by consultancy AlphaBeta and sponsored by Google.

AlphaBeta will present at the Civic Nation event in Sydney on September 27 where AI and its effect on digital disruption is a central topic.

The Google/AlphaBeta report says Australia could add up to $2.2 trillion in value to the country’s economy out to 2030 by embracing automation, but that we are well behind leading economies when it comes to engaging in automation.

Australia was ninth in a list of countries ranked by the percentage of their publicly listed firms that engaged in automation between 2010 and 2015. Top of the list was Sweden with 25 per cent, followed by the US (20 per cent) and the UK (12 per cent).

“There were only nine per cent of publicly listed Australian firms making sustained investments in automation in Automation Advantage survey,” says Mr Studley.

He says the report findings gel with what he sees anecdotally out in the field.

“AI automation is already here. It’s in your hand and your mobile phone, such as when you bring up a weather forecast using voice recognition, or when shows and books are recommended for you on Netflix or Amazon.”

Australians are using AI applications developed and hosted offshore – mainly in the US – in ever increasing numbers. But AI is not making inroads into Australian business and government processes at anywhere near the same rate.

“In terms of building AI into the fabric of Australian organisations, whether public sector or private sector, I’d say we are well behind and it’s a real challenge,” Mr Studley said.

“At executive level AI is still a bit of a play thing – it’s not a main topic of conversation in the board room.

“They are talking about data analytics now and they are talking about digital transformation and customer experience, but they are not talking about AI and how it’s going to fundamentally transform the way our economy operates,” says Mr Studley, who subscribes to the theory that AI will become a fundamental utility underpinning the economy and society.

“AI will become a mainstream approach that can’t be ignored and I would say the representation of that dialogue in Australian boardrooms is probably not where it needs to be.”

Nevertheless, there are signs of AI action in the Australian business and government scene.

Mr Studley notes the Victorian government has established an all-party AI study group and the financial services sector is looking to AI to boost a range of processes, particularly in the RegTech arena where the current Royal Commission has unearthed many regulatory failures.

“We have seen the CBA announce a RegTech pilot that uses natural language processing and AI to look at regulatory texts and transcribe them into their compliance obligations. They are taking a more innovative approach to make sure they are taking action according to their regulatory obligations.”

Cyber and fraud protection are other financial services use cases seeing more and more automation.

“All the banks have announced they have got programs to more heavily automate and build intelligence into those activities. We’ve got anti money laundering, counter terrorism financing, cyber security and fraud detection,” says Mr Studley.

Part of the problem in ratcheting up local AI development is a skills deficit, similar to the shortage in data scientists when big data and analytics use began to ramp up a decade ago.

PwC Australia’s National Education and Skills Lead David Sacks says Australia needs to quickly build up a national AI capability, and sees an AI skill deficit here playing out both in core AI skills and in the ability to translate AI to everyday processes.

“It probably manifests in two ways. One is a shortage of skills and even an understanding in what AI is and how it can be applied and where it’s going to drive value,” says Mr Sacks.

“The second piece is the interface between organisations and AI – that is probably where the massive growth and a corresponding skills shortage is.

It’s not so much about core AI skills, but the application of them, Mr Sacks says.

He suspects the first large cohort of AI experts will be people coming to AI from other fields and that broad spectrum teams will be the ones that bring AI projects out of the lab and into the wild.

“At the very pointy end where its about core ideas there is probably more of a need for capable and experienced individuals with a good understanding of AI in that initial translation from idea to concept.

“But then from concept to pilot that’s where it is much more of a team sport.”

Training up the Australian workforce to properly exploit the coming wave of AI-based apps and processes is crucial.

“That’s a boat we can’t afford to miss,” says Mr Sacks. “We have to build out national capabilities for this.”

Mr Sacks points to several local institutions in position to help with the AI surge.

“Sydney University has a really strong capability in smart agriculture and advanced manufacturing.

Deakin University and La Trobe are strong in cyber and AI, as are Melbourne University and University of Queensland.

“There appears to be a couple of camps, some that are pursuing AI through a disciplinary lens while others are involved in pure or basic research,” he says.

PwC Australia has partnered with InnovationAus.com to present the Civic Nation 2018 on September 27 in Sydney and will host an invitation-only Artificial Intelligence Policy Roundtable on the same day.

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