Making the most of the AI opportunity: productivity, regulation and data access
Research paper
Released 01 / 02 / 2024
Policymakers around the world are considering how to best harness the transformative potential of artificial intelligence (AI) for productivity while trying to anticipate and limit any associated risks.
But as AI technology becomes more pervasive and sophisticated, each country is faced with its own unique challenges and opportunities.
In this set of three papers, the Productivity Commission places Australia’s AI opportunity in a global context, to consider how our governments can help to maximise the potential economic benefits of this evolving technology.
Paper 1: AI uptake, productivity, and the role of government
Paper one outlines how Australia stands to benefit most from AI technology, and consequently, where governments should focus their policy efforts.
It finds that Australia’s opportunities in the short-term are further down the AI value chain, in adapting general purpose models to more specific, local use cases; or in implementing the technology, particularly through digitised firms and software as a service. Australia could also play a role developing AI models that can be trained on smaller, high-quality datasets.
Government should focus on ensuring Australia has the skills and digital infrastructure to integrate AI in these ways and modelling best practice. They should also play a role in building public trust, ensuring trustworthiness, and establishing frameworks for data access and protections.
Paper 2: The challenges of regulating AI
Paper two considers governments’ other major contribution to AI policy: regulation.
Here too we must view Australia’s situation from a global perspective. Given our likely role in the AI value chain, Australian regulation will be driven, at least in part, by international approaches.
If we set local policy that is out of step with emerging global norms, we risk leading AI suppliers to bypass Australia, harming our economy.
Fortunately, many of Australia’s existing technology-neutral laws and regulations already apply to the use of AI technologies. This includes regulatory frameworks in areas such as consumer protection, privacy, antidiscrimination, negligence and sector specific and profession specific requirements.
However, the implementation of AI will likely highlight gaps in these regulations. We provide a practical guide to help government respond proportionately and effectively to such regulatory challenges.
The challenges presented by AI are particularly acute in the case of data.
Data is a vital input into AI technologies and, generally, increased accessibility of quality data would likely contribute to productivity. But at the same time, wider use of data (particularly with inadequate regulation) increases risks to individuals and raises questions about the rights of those generating, curating and using data.
Paper 3: AI raises the stakes for data policy
Paper three considers how AI raises the stakes for data policy, and what Australian policymakers should do to address the new questions about data rights and incentives that AI presents. One challenge is to improve public confidence in data‑sharing, including through enforcement of existing protections for individuals. Another challenge is to establish clear and consistent arrangements for text and data mining (TDM) for the purposes of training AI models.
Australian data remains an underutilised resource and will be increasingly valuable to harness the potential of AI.
Media release
Seizing Australia’s AI opportunity
New research from the Productivity Commission finds that artificial intelligence could significantly boost Australia’s productivity if governments implement well-directed policy and regulation.
In this set of three papers, the Commission places Australia’s AI opportunity in a global context, to consider how our governments can help to maximise the potential economic benefits of this evolving technology.
Paper one outlines how Australia stands to benefit most from AI technology, and consequently, where governments should focus their policy efforts.
“Australian business is already adopting AI through its integration with existing software and services – but to get the big productivity dividends we need business to transform core systems and adopt new tools as they emerge. Governments can support this by investing in skills and digital infrastructure and modelling best practice,” said Commissioner Stephen King.
Paper two provides government with a playbook for developing AI protections in the context of the emerging AI regulatory landscape.
It outlines a stepped, gradual approach to regulation that’s focused on addressing harms as they emerge.
“Australia’s robust regulatory frameworks are one of our biggest strengths. Many uses of AI technology are already covered by this regulation. Before jumping to new AI-specific laws, we should examine existing regulations and better explain how they apply to the uses of AI,” said Commissioner King.
“AI will likely highlight gaps in current laws and regulations that we will need to address. But pre-empting these gaps with overzealous lawmaking could put local policy out of step with global norms, limiting the potential productivity gains of this new technology.”
The research finds the challenges presented by AI are particularly acute in the case of data.
Paper three considers how AI raises the stakes for data policy, and what Australian policymakers should do to address the new questions about data rights and incentives that AI presents.
“Advances in AI highlight that data is an increasingly valuable resource that is underutilised in Australia. Key challenges for governments will be to improve protections and public confidence in data sharing, and to establish clear and consistent arrangements for training AI models.
“The new wave of AI innovation may finally pull productivity growth out of the shallows – judicious policy interventions and a practical approach to regulation would put the Australian economy in the best position to ride that wave.”
The Making the most of the AI opportunity research papers are available from the Commission’s website: www.pc.gov.au
Media requests
Simon Kinsmore – 02 6240 3330 / media@pc.gov.au
Contents
Paper 1: AI uptake, productivity, and the role of government
- Preliminaries: Cover, Contents and Copyright and publication detail
- Key points
- 1. The importance of AI uptake to Australia’s productivity
- 2. AI is already spreading through the Australian economy
- 3. Policy levers supporting AI and productivity
- References
Paper 2: The challenges of regulating AI
- Preliminaries: Cover, Contents and Copyright and publication detail
- Key points
- 1. What kind of regulation and accountability is needed?
- 2. Is new regulation needed?
- 3. Issues for AI regulation
- References
Paper 3: AI raises the stakes for data policy
- Preliminaries: Cover, Contents and Copyright and publication detail
- Key points
- 1. Data is vital to AI
- 2. Sharing personal data in the AI era
- 3. Commercial terms for data-sharing
- 4. Governments as role models in data curation and safe sharing
- References
Public engagement
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