No rules, no use: Aussie firms may miss AI opportunity

A lack of rules governing AI technology is holding Australian businesses back and could lead to them squandering a $142 billion opportunity, a report has found.

Networking company Cisco and the Australian Governance Institute issued the warning on Tuesday after conducting research across multiple firms, including banks, charities, education and retail groups.

The research found more Australian organizations are adopting this technology by 2025, but the country lags behind other organizations in the Asia Pacific region.

The findings come after the federal government pledged to publish a national AI plan before the end of the year and an update to Australia’s Voluntary AI Security Standard.

The report, Turning Hesitancy into Action, analyzed Cisco’s AI Readiness Index and the institute’s AI Deployment and Governance Survey, in addition to interviewing representatives from the finance, education, nonprofit, and retail industries.

Australian organizations have been slow to adopt AI tools, rising from four per cent to just 22 per cent by 2024.

Nearly two in three organizations did not provide AI training to their staff (64 percent), and most failed to effectively measure the return on their AI investments (93 percent).

Cisco Australia and New Zealand chief technology officer Carl Solder said many Australian businesses did not have the expertise or guidelines to confidently invest in AI innovation, although he predicted OpenAI could generate $142 billion in dividends by 2030.

“Australia is lagging behind its industry peers in Asia Pacific but also globally,” he told AAP.

“There was a particular pillar… a lot of people had expressed governance challenges around it.”

According to the report, barriers to the adoption of AI technology include ethical concerns, security and privacy challenges, operational barriers, and the risk of falling behind competitors.

Daniel Popovski, senior advisor for policy and advocacy at the Australian Governance Institute, said organizations were also delaying investments in AI due to uncertainty around upcoming regulations.

He said while European countries were focusing on managing risks, the US was taking an innovation-first approach, but it was still unclear what AI rules and laws would look like in Australia.

“What we need is for the current government to provide some policy certainty about how they want to regulate AI,” he said.

“On the one hand, they showed that they wanted to take a risk-based approach, then they put the brakes on that and now they say they want more of this innovation ecosystem.”

The report published six recommendations for organizations to safely adopt AI, including greater staff training, controls to ensure safe experiments, and the creation of internal governance committees.

The federal government has not yet published mandatory guardrails for AI use, but Deputy Digital Economy Minister Andrew Charlton recently said at an event in Brisbane that it would publish a national AI plan this year.