Creating jobs and increasing the productivity and competitiveness of Australian businesses
We use AI every day in products and services that help us manage businesses, make office work productive and increase efficiencies on factory floors and farms. It enables us to introduce incremental efficiencies into our routine tasks. But AI can do much more – AI can transform the way we do business and lock in our future competitiveness.
AI technologies are facilitating data-driven business models (Seagate 2018) that enable businesses – from local cafés to advanced manufacturers to:
- provide customised products and services
- expand into new industries and markets
- enhance business efficiencies.
AI is presenting new opportunities for businesses to adopt and use AI technologies to increase their productivity and competitiveness, and generate jobs. The Australian Computer Society (ACS) anticipate that AI and digital innovation will create up to 1.2 million new ‘technology’ jobs across our economy by 2034 (Faethm 2020:11). Overall, ACS projects that 5.3 million new jobs may be created by 2034 in the Australian economy due to technological advancements (Faethm 2020:10).
While 80% of industry leaders believe that AI will have a transformative impact on their business, 63% of businesses have difficulty knowing where to start when implementing AI technologies (Seagate 2018). The Australian Government is committed to ensuring that businesses have the knowledge, tools, talent and support to capitalise on AI’s potential. It has included a series of new measures in this Action Plan to support this.
Our Action Plan will support those businesses starting out in AI, and it will also support our advanced manufacturing sectors. Enabling digital technologies, such as AI, will help our manufacturers to create entirely new products, processes and business models. The use of AI is likely to have significant benefits to each of our 6 National Manufacturing Priorities under our Modern Manufacturing Strategy. Evidence of AI’s application is already seen among the industries included in the manufacturing priorities.
These measures build on a range of other measures already driving adoption of technology in Australia. These other measures include those with a technology focus, as well as broader settings, including getting our tax settings right.
AI direct measures
The Australian Government will provide $53.8 million to establish a National AI Centre within CSIRO’s Data61, as well as 4 AI and Digital Capability Centres (Capability Centres). The National AI Centre will coordinate Australia’s AI expertise and capabilities. It will also address barriers that small and medium enterprises (SMEs) face in adopting and developing AI and emerging technologies. The Capability Centres will help SMEs to adopt AI by providing access to cutting edge AI technology and experts. SMEs will connect with AI practitioners, access AI tools and facilities, and benefit from services and training to help them confidently adopt AI. This initiative will make it easier for these businesses to innovate and remain competitive. It also complements the broad range of targeted, government-funded support available to SMEs.
The Australian Government will provide $12 million to establish the Catalysing the AI Opportunity in our Regions program. This program will co-fund competitive grants to deploy AI in regional areas and support participation by diverse cohorts. These projects will help build awareness of AI applications to regional challenges and ensure that the benefits are spread evenly around Australia. Crucially, this program will build regional communities’ trust in AI technologies. It will ensure that the design and implementation of responsible AI technologies reflects the values of both urban and rural Australia.
The Cooperative Research Centres Projects (CRC-P) program provides funding for short-term research collaborations to develop new products, services or technologies (including AI). The projects facilitate industry-research collaboration that delivers real outcomes, benefits SMEs and provides education and training activities. Since 2018, the CRC-P program has provided $43.7 million to support 21 industry-led AI-focussed projects. For example, the CRC-P program has helped Australian company, Seeing Machines, in partnership with Monash University, Ron Finemore Transport and Volvo Australia to develop computer vision technology. This technology helps prevent driver fatigue and helps monitor drivers for the commercial transport sector.
Driving the growth of technology and digital skills
The Australian Government’s $1.5 billion Modern Manufacturing Strategy is funding projects that will transform manufacturing businesses. This strategy will help businesses to scale up, translate ideas into commercial successes, and integrate into local and international value chains.
An expanded Digital Solutions – Australian Small Business Advisory Services will invest $12.7 million to provide 17,000 small businesses access to high quality, low cost and independent advice to adopt digital technologies. This measure also includes funds to conduct a pilot to provide services to select not-for-profit organisations.
The Digital Business-to-Business (B2B) Partnerships Initiative will leverage the trusted relationships that Australia’s corporate sector has with SMEs to promote the adoption of and access to digital products and services. This initiative was announced as part of the Digital Economy Strategy.
The Digital Foundations for Agriculture Strategy, under the National Agricultural Innovation Agenda, will help promote AI in Australia’s agriculture and Agtech industries. Together with the new priorities set out in the National Agricultural Innovation Policy Statement, the strategy sets out a pathway for driving development and widespread uptake of digital technologies including AI.
Foundational policy settings
The Entrepreneurs’ Programme (EP) helps Australian businesses to grow, strengthen, innovate and commercialise both nationally and globally. The program provides businesses with access to expert advice and financial support that will take them to the next level, including assisting businesses to digitise their operations. For example, FluroSat received an Accelerating Commercialisation Grant from EP which helped it commercialise a platform. The platform combines machine learning, agricultural modelling and remote sensing imagery (from drones, planes and satellites) to detect early signs of plant stress. The platform is helping crop agronomists and farmers make better-informed decisions and improve crop yields by 10–25%.
The Research and Development Tax Incentive (R&DTI) reduces R&D costs by offering generous tax offsets for companies conducting eligible R&D activities. The program aims to encourage companies to invest more in these activities to generate benefits for the broader Australian economy. The R&DTI provides over $2.5 billion to over 11,000 businesses every year. The Information and Communication Technology (ICT) field of research comprises around 40% of all R&DTI registrations across all sectors. However, not all software development meets the requirements of the program. This has led technology sector stakeholders to seek greater clarity around how the R&DTI applies to their activities. To address these concerns, the Australian Government is working with technology sector representatives to improve guidance, including through consultation on new software specific guidance material.
The Tax incentives for early stage investors provide tax concessions to investors in qualifying Early Stage Innovation Companies. These investors will often bring business experience to the business in addition to capital.
The Early Stage Venture Capital Limited Partnerships (ESVCLP) and Venture Capital Limited Partnerships (VCLP) programs are designed to increase venture capital investment in Australia. The ESVCLP program aims to increase investment in startups through Australian early stage venture capital funds by providing tax offsets and capital gains tax exemptions on eligible investments. The VCLP program is also aimed at increasing investment through Australia’s venture capital sector by providing tax concessions to eligible foreign investors.
The Australian Government is also allowing taxpayers to self-assess the effective life of depreciating intangible assets such as patents, registered designs, copyright and in-house software for tax purposes. This change reduces the cost of investment for business and aligns the tax treatment of these intangible assets with the treatment of tangible assets.