Generative AI could contribute $5bn annually to Australia’s manufacturing sector by 2030
The ‘Australia’s Generative AI Opportunity’ report is a collaboration between Microsoft and the Tech Council of Australia. It’s contents 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 shows that GAI could contribute between $45bn and $115bn 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 $2bn and $5bn annually to the manufacturing sector by 2030.
TCA’s CEO says the report underscores the enormous economic potential of GAI for the manufacturing sector. However, Kate Pounder warned that the sector risks falling behind other industries in the adoption of this technology if it fails to accelerate its digital transformation.
“Generative AI has the potential to redefine the industry, playing to Australia’s strengths of producing high-quality and highly technical products. But the sector needs to accelerate its digital transformation to make the most of this significant opportunity,” she 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% and augment 19% of tasks, leaving more time for complex and strategic activities. It can also enhance the on-the-job learning for technicians – who comprise 27% of the sector’s workforce – and trades workers through rapid upskilling and training.
“Generative AI will redefine the flow of work and drive efficiencies across enterprises, from the manufacturing floor to knowledge workers. This presents significant opportunities for our industry, to make knowledge more accessible, increase productivity and the ability to address business challenges at scale.” – Angus Melbourne, Chief Technology Officer at Orica.
However, the report cites several challenges facing the sector in its adoption of GAI. While 72% of manufacturers have increased their digital transformation efforts throughout the COVID pandemic, only 20% 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.
“We’re proud to partner with the Tech Council on this timely report,” said Lee Hickin, Chief Technology Officer at Microsoft ANZ said. “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.
To learn more, read the report HERE.