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AI and Australia: charting a path to sustainable competitive advantage

AI: a path to sustainable competitive advantage

As Artificial Intelligence (AI) becomes a critical force in economic growth and social cohesion, Australia will need to chart a path towards a national AI strategy that plays to our relative strengths.


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Over the past two years, governments around the world have developed and released national Artificial Intelligence (AI) strategies in an effort to leverage the benefits of the AI revolution. From global powerhouses like the United States (US) and China, to smaller nations such as Finland and Taiwan, strategic government investment in AI is set to supercharge economies. Now is the time to prioritise government and business engagement so Australia too can establish a sustainable competitive advantage and secure a position as a global leader in the AI space.

A report published by Boston Consulting Group (BCG), ‘Mind the (AI) Gap’, stressed the need to accept AI’s inherently disruptive nature.1 The report made clear that countries will need to adopt similarly disruptive investment strategies if the opportunities presented by the technology are to be seized and adopted most effectively for national benefit. Additionally, the willingness of executives to wholeheartedly embrace disruption and ensure their businesses are adequately primed for an AI revolution will be key to success in this rapidly evolving landscape.

National priorities

China presently leads the way with regard to the adoption and implementation of AI technologies. According to BCG, 85 percent of companies in China can be categorised as ‘active players’ in AI. This figure far outstrips the majority of industrialised countries, including traditional technological powerhouses such as the US and Germany, where between 40 and 50 percent of companies are considered active players. The main differentiating factor is that in China the emergence and implementation of AI activity is a nation-wide phenomenon and success is attributable to strong activity across two key dimensions: AI adoption and AI pilots.

For nations such as Australia, where the relative population pales in comparison, keeping up with the AI revolution will require bold strategic action and thoughtful investment in AI. Simply put, we have a relatively limited supply of data from which to design machine learning algorithms, and as a result, must think critically about the potential for AI to enable growth and innovation across major industries as well as explore emerging models that rely less on data, to ensure we are not left behind.

Australia is one of the largest food exporters in the world and investment in AI through AgTech and FoodTech is one such strategic move. KPMG has previously identified AI as a key supporting technology in Australia’s 21st century food production ecosystem and has recommended significant investment be made in this area2. By way of example, KPMG has explored the use of Advanced Transport Management for agricultural freight. Use of AI in this regard would mean that autonomous transportation could run 24/7 ensuring fresh product is distributed and exported safely with unprecedented efficiency and at significantly less cost.

Strategic opportunities

This is not to suggest that the opportunities presented by AI are limited to certain sectors, rather AI has the potential to revolutionise all industries, for all players. As a result of increasingly competitive markets, to achieve sustainable competitive advantage however, government and business leaders will need to identify where ‘unfair advantages’ lie – to think strategically and find opportunities for collaboration across industries to maximise returns.

Indeed, Australia has the potential to demonstrate leadership in the establishment of global best practice across the economy. A progressive national AI strategy will be critical in strengthening Australia’s capability in AI and machine learning as illustrated in the Federal Government’s budget commitment to programs for innovation across business as well as research into skills gaps. Just as importantly, business and government leaders will need to exercise courage through a disruptive approach to AI integration. Public trust is an indispensable ingredient in this mix to secure the social license to take on a leadership position in the international AI landscape.

On 7 February 2019, KPMG convened the inaugural Future AI Forum Australia. This initiative is designed to drive collaboration, accelerated thinking, genuine breakthroughs and ownership of solutions to these questions. The founding members will bring a holistic, community view to the issue, and will include leading academics, researchers, corporates, consumer groups, Federal government representatives, and relevant charities – all deeply involved in AI, its use, advantages and disadvantages.

©2021 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation.

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