AI can't lift productivity on its own

This time last week, the Treasurer was releasing his second and Australia’s seventh Intergenerational Report. Intended to provoke discussion of and action on longer-term challenges in Australia, it makes for sober reading. 

Living standards as measured by GDP per capita will continue to improve, yet as a nation the challenges to maintaining our quality of life, underpinned by a strong economy and strong social compact, are laid out as population ageing and climate change put pressure on growth and government budgets.  

Australia’s inaugural Intergenerational Report assumed productivity growth of around 1.75 per cent per annum. But with productivity growth averaging −0.5 per cent over the past five years, the latest assumption of 1.2 per cent growth is highly optimistic and it is hard to conclude that we have been proactive enough in responding to the messages of past reports.  

The Intergenerational Report looks primarily to AI to help reconcile our recent lacklustre productivity performance with long-term potential. Indeed, the term “AI” appears 508 times in the report.

This theme continued as CEDA hosted the Reserve Bank Governor Michele Bullock in Sydney last week, where discussion centred on the question of whether the investments we are seeing in AI can really shift the dial on productivity.

The Governor described AI as the “great white hope” for productivity, but also highlighted the catch. AI investment is already lifting demand across the economy, and there are so far “very few signs” that it is expanding what we can produce.

Governor Bullock also warned of possibly “some bumpy bits in the middle”. Work will change, some roles will disappear and new ones will emerge. But the opportunity is not doing the same work with fewer people. Used well, AI lets the same workforce do more, and that is what lifts incomes and creates new sources of growth.

So, the hard question is not whether but how Australia moves from investment to impact.

The tools alone will not deliver. Real gains will come from what organisations do with them: moving past pilots and fundamentally reshaping how businesses run to capture and create new opportunities. Success depends on leadership, an empowered and adaptable workforce, and above all on a willingness to do things differently. 

To help get a clearer picture of Australia’s AI readiness, CEDA is working with the UNSW Business School’s Business AI Lab, the National AI Centre and Gilbert + Tobin on a new study of AI adoption across Australian organisations.

The study explores adoption, governance and risk, investment, workforce skills, and what stops organisations from turning successful pilots into everyday practice. Your input will help us gain a clearer picture of the opportunities and challenges, and I invite you to complete the short survey through the link below.

We want to hear from organisations at every stage of their AI journey. We are also seeking responses from people in different roles and at different levels. Understanding whether views of senior leadership are representative throughout organisations will be one of the study’s most valuable contributions.

Organisations that provide at least 10 responses will receive a bespoke report from UNSW assessing their organisational results. Individual responses and participating organisations will not be identified in the final findings or disclosed outside the research team.

AI cannot lift productivity on its own. The opportunity will come down to the choices organisations make. This research will show where Australia stands, and what it will take to realise the benefits and potential of AI. I hope you will be part of it.

The conversation will continue at our AI Leadership Summit 2026 in Sydney on 27 October, bringing together leaders from business, government and academia to explore how Australia can turn AI investment into productivity, growth and broader economic opportunity.

In Adelaide on 8 October, SA Pathways to jobs, skills and growth will bring together leaders from government, education and industry to discuss the workforce and skills needed to support South Australia’s future growth.

And in Melbourne on 15 October, Victoria State of the State will examine the economic outlook and priorities shaping Victoria’s future, including investment, growth and shared prosperity.

We also welcome our newest member, Atlassian. Thank you for joining CEDA.