GAI could unlock billions of value for manufacturing sector

Generative AI (GAI) has been revolutionising the way we create, design and innovate. Now a new report has found that Australia’s manufacturing sector could unlock billions of dollars in value by 2030 if it accelerates the responsible adoption of generative artificial intelligence (GAI).

The report, Australia’s Generative AI Opportunity, is a joint collaboration between Microsoft and the Tech Council of Australia. It shows that GAI could contribute between $45 billion and $115 billion a year to Australia’s economy by 2030 through two major channels: improving existing industries and enabling the creation of new products and services.

Manufacturing has been identified as one of the four key sectors of the Australian economy poised to benefit from GAI. The report found that the technology could contribute between $2 billion and $5 billion annually to the manufacturing sector by 2030.

Kate Pounder, CEO of Tech Council of Australia, said the report shows the economic potential of GAI in the sector, but warned that the sector risks falling behind other industries in the adoption of this technology if it fails to accelerate its digital transformation.

Unlocking the potential benefits of GAI for manufacturing

In areas such as predictive maintenance, quality control and robotics, AI is already applied by manufacturers. GAI can further uplift the sector by using data patterns to generate new content such as images, text or designs. This can impact manufacturing areas where AI hasn’t been used, including designing or recommending products based on trending features, upskilling apprentices and technicians and automating supply network controls.

For managers in the sector, the report estimates that GAI could automate 30% and augment 19% of tasks, leaving more time for complex and strategic activities. It can also enhance on-the-job learning for technicians and trade workers through rapid upskilling and training.

However, the report cites several challenges facing the sector in its adoption of GAI. While 72% of manufacturers increased their digital transformation efforts throughout the COVID pandemic, only 20% currently use AI. If not addressed, this could cause the manufacturing sector to lag behind other sectors in this area.

Lee Hickin, Chief Technology Officer at Microsoft Australia and New Zealand, said: “We’re proud to partner with the Tech Council on this timely report. Generative AI has emerged as a transformative technology in 2023, with its adoption growing rapidly across various sectors in Australia. There’s a huge opportunity for the manufacturing sector as it deploys generative AI to support workforce transformation, enhance smart factories and supply chain resilience, and accelerate innovation.”

Leveraging Australia’s comparative advantages and taking strategic actions

The report notes that deeper collaboration is needed between industry and government for Australia to capture the economic benefits of this technology and become a global leader in GAI.

A key to spurring the collaboration will be to leverage Australia’s comparative advantages in digital technology, including a large and highly skilled workforce, strong investment and a high level of cloud computing adoption.

The report also identified barriers that industry and government face in capitalising on GAI in four key areas: technology capability, enterprise readiness, awareness and skills and responsible AI.

It also outlines strategic actions that adopters and policymakers need to take for Australia to overcome these challenges. These include defining the opportunity and vision for GAI, assessing readiness, incentivising adoption and innovation, upskilling the workforce and developing responsible AI governance frameworks.

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