Australia risks falling behind as AI talent & planning lag

New research has found that Australia is losing ground in the global race to harness artificial intelligence, as a lack of clear planning and significant talent gaps threaten national productivity and workforce security.

The ServiceNow AI Maturity Index indicates Australia's AI preparedness score has fallen by 10 points over the past year to 36 out of 100, with only 10% of enterprises expressing readiness to reorganise or innovate with AI. This is despite nearly 82% of surveyed organisations planning to increase their investments in AI in the coming fiscal year.

Planning and skills gaps

The research highlights that just one-third of organisations have a clear vision for AI, and only 37% believe they have the skills and talent needed to execute their AI strategies. Data governance structures have been formalised by only 43% of companies.

The survey reveals that Australian businesses have a window of roughly five years to develop and implement effective AI strategies. This timeline is critical to ensure financial and productivity benefits from automation and to safeguard jobs through upskilling initiatives.

The findings point to a disconnect between growing investment in AI technologies and the practical steps needed to ensure their effective implementation. While businesses are committing capital to AI, many lack the accompanying clear plans or measurable objectives necessary to guide their efforts.

Workforce concerns

Australian workers are facing significant uncertainty as AI adoption accelerates. The study found that six in ten Australians are concerned about losing their jobs to generative AI, the highest level of concern reported globally in the research.

Among business leaders, 71% have yet to determine the specific skills that will be required to implement their AI strategies. Furthermore, nearly two-thirds (63%) report a lack of necessary resources and in-house talent to adequately execute AI initiatives. This uncertainty comes as national productivity targets increasingly depend on technology-driven reforms.

Government efforts are focused on building public confidence in AI and closing the technology skills gap, with the Productivity Commission leading reform efforts. Despite these steps, there is a noted growing gap between national aspirations for AI and business implementation on the ground. According to ServiceNow's research, 670,000 Australian jobs are expected to be automated by 2030.

Comparison with other markets

Australia's progress in growing its technology workforce is trailing behind countries such as India. India's technology workforce is projected to expand by 95% by 2030, driven by large-scale domestic digital transformation and a stronger pool of technology talent. In comparison, Australia's tech workforce is expected to grow by only 37% in the same timeframe, representing just 150,000 additional jobs. This falls significantly short of the Tech Council's target of 1.2 million tech roles by 2030.

"Our nation is at a tipping point and without immediate action, weak AI strategies and talent shortfalls could derail Australia's productivity ambitions," says ServiceNow's Employee Experience Director, APAC, Danielle Magnusson. "But for those with strong leadership, an enterprise-wide AI platform, and an upskilling agenda, AI offers a clear path to smarter, faster, more resilient business."

Industry perspective

Pacesetting organisations are taking steps to mitigate the risks and capitalise on the opportunities presented by AI. Companies like Orica are prioritising coordinated AI strategies and staged rollouts. Orica has implemented ServiceNow's AI-powered Virtual Agent across 35 use cases, aiming to deliver improvements in both speed and quality of IT service.

"Our deflection rate has gone from 18% to 94%, which is just a massive increase," said Bradley Hunt, Manager of DevOps and Regional Apps at Orica. "We are speeding up the average resolution time by more than a day, freeing up our team to do more strategic tasks."

Rapid technological development

The pace of advancement in areas such as agentic AI is putting pressure on businesses to rapidly upskill their workforces to match new operational demands. The report underscores the need for leadership to take decisive action to align people and technology, preparing workforces for a period of significant transformation.

The ServiceNow research was conducted in partnership with Oxford Economics, surveying over 4,400 senior leaders worldwide, including 560 in Australia, to gauge AI maturity and readiness across sectors.