AI Revolution: How Australia Could Gain $120B and Create Thousands of Jobs

Artificial intelligence (AI) is often portrayed as a job killer, but new research suggests it could be a major economic boon for Australia. According to a study by consultancy EY, AI could boost the national economy by up to $116 billion and create tens of thousands of jobs by the mid-2030s.

The Economic Impact

The modelling indicates that AI could increase the size of the economy by 2.6% to 3.2% by 2035, translating to a $95 billion to $116 billion boost. This growth is expected to generate an additional 36,000 to 44,000 jobs and spur up to $38 billion in business investment.

Jobs: More Than Just Replacement

Contrary to fears of widespread job losses, the research shows that AI will shift employment demand rather than simply replace workers. Construction, retail, and wholesale trade are set to gain nearly 10,000 jobs each, with another 6,000 in transport and warehousing. Sectors like financial services, hospitality, and manufacturing are also expected to see job growth.

However, agriculture and mining are projected to lose almost 3,000 jobs each due to automation in capital-intensive industries.

The Data Centre Boom

A key driver of job creation is the data centre construction boom, particularly in NSW and Victoria. The value of data centre construction is expected to skyrocket from $1 billion in 2020 to $60 billion by 2030, rivaling the mining boom of the early 2010s.

Productivity and Wages

EY's chief economist, Cherelle Murphy, highlights that AI-driven productivity gains could reverse Australia's poor productivity performance, which has contributed to sluggish real wage growth. The technology could also lead to more rapid retail price changes, potentially impacting inflation.

Reskilling and Mobility

To fully harness AI's benefits, Murphy emphasizes the need for workforce mobility and targeted reskilling to help workers transition into growing sectors. This is a key priority for both employers and government.

Conclusion

While AI presents challenges, this research offers a more optimistic outlook, suggesting that with proper planning, AI could be a powerful tool for economic growth and job creation in Australia.