Despite transforming Australia’s economy “in powerful ways”, artificial intelligence (AI) and robotics will barely move the productivity needle over the next 40 years, the government’s latest Intergenerational Report (IGR) has predicted in spruiking a wan productivity vision.

Even as other countries doggedly invest in AI to boost economic output by helping workers produce more in the same time, the vision painted in the new report – the government’s sixth since 2002 – is more about using AI to enable Australians to work less, and more selectively, in an expanding “knowledge-based economy” that is “changing the types of skills required and the nature of work”.

Increasing productivity “enables higher incomes and gives people more choice,” the report says, noting that this “could mean working fewer hours and spending more time with family [or] consuming more or higher quality goods and services.”

Although arguing that digitalisation “will change how we work… providing us with the agility we need to face the challenges of the future,” the report notes that productivity will grow at just 1.2 per cent annually for the next 40 years – continuing a growth trend observed over the past 20 years – while Australia’s economic growth is actually expected to slow over the next 40 years, to an average of 2.2 per cent per year.

Mooted increases in productivity from the adoption of new technologies, then, won’t be enough to keep Australia’s economic growth from sliding backwards over the next 40 years.

Yet amidst the idea that improved productivity allows Australians to work less – as opposed to helping them produce more while working the same amount – was a surprising lack of detail around the role of technology in this transformation.

Although he spoke glowingly of the “shift from IT to the AI revolution”, Treasurer Dr Jim Chalmers during a National Press Club address – in which he introduced the new IGR – said that the “opportunity of the century” for Australia lies not in developing new knowledge industries but in scaling to meet surging global demand for critical net zero-enabling minerals like lithium.

Noting that the mining, refining and manufacturing of products based on these minerals will drive a near doubling of the sector’s GDP contribution over coming decades, Chalmers said that Australia’s future economic base will benefit from surging exports of minerals critical to the net zero transformation, such as rechargeable battery component lithium – of which Australia is the world’s largest producer – demand for which is expected to grow eightfold over the next 40 years.

Doubling down on mining as the basis of Australia’s decadal growth is a significant shift from government rhetoric in recent years, which has focused on the benefit of expanding the economy by developing emerging technologies such as quantum computing – which did not get a single mention in either Chalmers’s speech or the IGR itself.

Automation, robotics, AI, and remote operations “will continue to be areas of emerging potential” for the next 40 years, the report predicts – although Chalmers was quick to point out that even that “emerging potential” could be compromised without the right policy settings.

“As general-purpose technologies, the impact of AI and robotics will stretch across the breadth and length of our economy in powerful ways,” Chalmers said, “but if we muddle through with the wrong policy frameworks and fail to make the right investments…. It’s possible, if not probable, that the fourth industrial revolution will leave more people behind than it lifts up.”

Gumming up the works

Despite the panoply of technological innovation that is certain to be unleashed in coming decades, industry groups warned that fundamental regulatory missteps are continuing to impede the realisation of productivity improvements.

Boosting long-term productivity will be difficult thanks to Australia’s “woefully low” spending on science, research, and innovation, Australian Academy of Technological Sciences and Engineering (ATSE) CEO Kylie Walker noted in an IGR response that called for an “urgent review of R&D funding in Australia”.

The net-zero transition offers an “unmissable opportunity to lead the world-wide green revolution,” Walker said in encouraging the government to “ratchet up its investment in green energy technologies and infrastructure”.

“Data, digital technologies, and related infrastructure are essential for our future economy,” she said.

“New technologies are already improving our quality of life and health outcomes – however, to grow this potential, Australia has a steep hill to climb.”