A “bold and thoughtful” adoption of generative artificial intelligence (genAI) could significantly boost productivity and improve the quality of life of all Australians, a new report has found.

McKinsey’s Generative AI and the future of work in Australia report found that the technology has the potential to increase Australian labour productivity by up to 1.1 percentage points per year through to 2030 and automate as much as half of all workplace activities within the decade.

It found that the proper implementation of technologies such as ChatGPT could help to reverse Australia’s lagging productivity.

“If Australia were to achieve even half of the potential productivity uplift, it could be on track to rekindle the faster economic growth of the post-1990s heyday,” the McKinsey report said.

“Generative AI unlocks a future that may differ markedly from the present.

“Supporting an optimistic outlook, Australia’s economy has proved robust through challenging times, and shifts from genAI could unlock benefits for Australia – including higher job demand and productivity.”

“However, this potential may only be realised if employers, governments, and educators are able to adopt the technology in a bold and thoughtful way.

“Such strategic action could ensure that future generations of Australians benefit from the same prosperity that the country has experienced over the past three decades.”

The report found that 62 per cent of existing workforce tasks have the potential to be automated using today’s genAI technology, up from 44 per cent in a McKinsey report from 2019.

This, along without economic changes, could see about 1.3 million people, or just under 10 per cent of the Australian workforce, needing to transition into new jobs by 2030.

The report separated industries in Australia into three categories based on how they will respond to the growth in generative AI: resilient and growing, stalled but rising, and disrupted and declining.

Resilience and growth

According to the report, science and technology jobs are resilient and growing, and can expect to see a net demand of 1.5 million additional jobs from 2022 to 2030.

Modelling in the report found that if genAI is adopted early and quickly, just over 50 per cent of workplace activities could be automated by 2030.

But the late adoption scenario looked in the report would see this figure being just 2 per cent.

“Advances in genAI have accelerated Australia’s automation opportunity,” the report said.

“If implemented well, these technologies could improve Australia’s productivity – and the quality of life of its people.”

GenAI tools are a “significant new force with the potential to reshape the future of work” and “could become ubiquitous, embedded into knowledge workers’ everyday tools”.

These knowledge workers will likely experience the biggest impact from generative AI too, the report found, with the demand for social, emotional, and technological skills set to increase rapidly.

Australians currently spend more than 40 per cent of their work hours on decision-making and collaboration, applying expertise, managing people, and interacting with stakeholders.

To adapt to the changes to be brought about by these technologies, Australian workers will need to be constantly building their skills.

The report backs up the findings of a recent Productivity Commission study that warned the government against “overzealous lawmaking”, and called for it to lead by example with a “stepped, gradual approach” to regulating AI.

The Productivity Commission found that AI has the potential to help to resolve Australia’s productivity slump.

A study last year found Australian companies are more likely than their international peers to ban ChatGPT, but also said that its use could improve efficiency and enhance creativity.