Powerful new automation technologies such as machine learning, artificial intelligence (AI) and advanced robotics have already started to transform the Australian economy and are set to reach scale in the decades ahead. These technologies present an enormous opportunity to restore momentum to the Australian economy and extend its 30-year boom in an inclusive way. However, the potential scale and distributional impacts of this disruption need to be carefully managed. This research examines how automation may affect Australia’s economy (under slow, mid-point and fast rates of adoption), and what policymakers and business leaders can do to both secure the benefits and navigate the challenges. The key findings are summarised below.
Automation technologies offer the promise of better customer and citizen outcomes, new business ventures and more efficient operations. We estimate that between 25 and 46 percent of current work activities in Australia could be automated by 2030, helping to drive a renaissance in productivity, income and economic growth. If seized, this opportunity could add $1.1 trillion to $4 trillion to the economy over the next 15 years, providing every Australian with $4,000 to $15,000 in additional income per year by 2030. Achieving these benefits depends on ensuring displaced workers can get new jobs.
Automation technologies will disrupt workforces across the economy. We estimate that 3.5 million to 6.5 million full-time equivalent positions could be affected, with 1.8 million to 5.0 million workers needing to change professions. At a mid-point pace of adoption, disruption by industry could range from 16 percent of jobs in the education sector up to 33 percent of jobs in transport. Across regions, the impact could vary from 21 percent in city centres dominated by professional services to over 30 percent in mining regions like the Pilbara. The economy will adjust, however, and new jobs will flow from the higher productivity that automation generates, as well as other trends including rising consumer incomes, greater health spending on ageing and infrastructure investment.
While some jobs will be lost, and others created, all jobs will change. As automation technologies take over more routine, predictable and physical activities, the mix of skills required in all jobs will shift, and there may be more opportunities for women with children, older workers and people with a disability. People at work will spend over 60 percent more time using technological skills and over 40 percent more time using social and emotional skills. Demand will increase for workers in unpredictable and interactive roles such as nurses, care workers and salespeople, but will fall for workers doing more automatable activities such as radiologists, mechanics, legal research assistants and those in accounts processing.
Left to its own devices, automation could have significant distribution impacts. During the peak of the transition, increased job churn could see Australia’s unemployment rate temporarily spike by up to 2.5 percent (for example, from 5 to 7.5 percent). Without retraining for vulnerable workers, especially administrative and manual workers and those in vulnerable regions, income inequality could widen by up to 30 percent.
With foresight and a commitment to act, Australia can capture the opportunity offered by automation, manage the risks and ensure the gains are broadly shared. The national effort could include essential competition reform and strong mechanisms to coordinate action. Companies and public agencies could refresh their strategies with an ambitious customer and citizen-centric targets that could only be achieved with automation, then build the skills and culture they need to meet them. Educators can lead efforts to foster lifelong learning of relevant skills through accessible, modular courses. Finally, companies could benefit from taking farsighted steps to assist displaced workers, complementing renewed government efforts to protect the most vulnerable and promote inclusive income growth.