Report reveals AI's productivity potential and workforce risks
Artificial intelligence adoption may mean a "painful" transition for workers despite its potential productivity benefits, a new report from the Productivity Commission (PC) has warned.
The commission's interim report on the productivity benefits of data and digital technology says AI is part of the solution to Australia’s stagnating productivity.
It found that productivity gains from AI will be above 2.3% in the next decade, with labour productivity growth estimated at 4.3%.
This means an extra $116 billion of GDP over the next decade, considering the current levels of population, working hours, and employment.
"AI will likely raise productivity, but there is ongoing debate about the magnitude of this effect," the commission said in the interim report.
AI is anticipated to increase the demand for workers in some professions and decrease it for others, according to the PC report.
"Inevitably, this will involve both painful transitions for workers whose roles are made redundant and positive changes from new opportunities," the report read.
The findings reflect previous global research that warned of the displacement of workers because of AI. The World Economic Forum in January said job disruption due to AI will equate to 22% of jobs by 2030, including 92 million roles displaced.
The WEF predicts that clerical and administrative-related roles will have the largest job losses proportionally, while occupations related to IT and digital services will have the greatest gains.
In Australia, the PC said Jobs and Skills Australia is evaluating how AI could affect the country’s workforce structure.
The review, expected to be released this month, looks at the exposure of jobs and different groups of workers to tasks being augmented or automated by AI.
"To the extent significant job displacement does occur, the Australian government may need to consider support for retraining workers, as has occurred in the past when there have been changes to the way jobs are undertaken," the commission said.
"The social safety net of unemployment assistance would also be available."
The interim report comes as Australia suffers from a "peculiar" problem post-pandemic.
Previous research from the commission showed while labour productivity hit a record high during the pandemic, it declined and returned to pre-pandemic levels in June 2023.
Australia's productivity slump is one of the key priorities of the upcoming economic roundtable from August 19 to 21, which will see the attendance of experts, businesses, and unions.
The PC's report, released ahead of the roundtable, said the government has a number of policy responsibilities to make the most of the AI opportunity.
Among these responsibilities are:
It recommended that AI-specific regulation should be a "last resort" for the use of AI that meets the following two criteria:
"The mandating of the guardrails is only appropriate in circumstances where existing regulatory frameworks or new technology-neutral regulations are not able to adequately mitigate the risk of harm," the report read.
