Generative AI and workforce capability uplift seen as keys to reversing Australia's productivity decline
A recent report by the Tech Council of Australia suggests artificial intelligence could generate up to 200,000 AI-related jobs locally by 2030, while significantly boosting productivity and GDP. Greater adoption of Generative AI alone could contribute over $100 billion to the Australian economy, with 70% of this benefit stemming from productivity gains.
Australia's productivity has been trending downward, with 2022-23 marking the steepest annual decline on record. Reversing this trend will require targeted investment in digital technologies and workforce capability uplift. The 2025 State of Smart Manufacturing (SoSM) Report by Rockwell Automation offers global insights, based on input from 1,560 manufacturers across 17 countries, including 85 organisations in Australia and New Zealand.
Manufacturers in Australia and New Zealand are already dedicating 30% of their operational budgets to technology. The SoSM 2025 Report finds that 71% have adopted production monitoring and 64% have implemented asset performance management as part of their smart manufacturing strategy. However, adoption of smart hardware solutions is slowing. For example, only 24% of companies in the region report are using collaborative robots – below the UK (30%) and Brazil (31%).
"Today's advancements are unlocking opportunities where people and technology together will define our future," says Anthony Wong, regional director, South Pacific, Rockwell Automation. "As the report shows, global manufacturers are using smart solutions to navigate disruption and gain agility. With the right technology and talent, we can simplify complexity and lead confidently through change."
Cybersecurity investment delivers returns
Cybersecurity remains a high priority considering escalating online threats. The Australian Government has committed between $15 and $20 billion over the next decade to enhance national cyber capabilities. Businesses are also making significant investments. According to the SoSM 2025 Report, 41% of organisations in Australia and New Zealand say cybersecurity delivers the highest return on investment.
While Generative AI and Causal AI offer significant opportunities, government warnings highlight risks such as data poisoning, AI hallucinations, and model theft. Despite this, 95% of surveyed organisations in the region have already invested or plan to invest in these technologies – higher than Japan (91%) and South Korea (93%). Causal AI is proving valuable in improving supply chain visibility and data-driven decision-making.
SaaS and Cloud adoption fuel operational transformation
Manufacturers increasingly recognise the benefits of Cloud and Software-as-a-Service (SaaS) technologies. Australia's SaaS market is forecast to grow at a CAGR of 10.1% between 2025 and 2030, reaching $57 billion by the end of the decade.
The SoSM 2025 Report shows that 89% of organisations in Australia and New Zealand have already invested or plan to invest in Cloud and SaaS technologies. While this is slightly behind Canada (95%) and Brazil (100%), the region remains a strong adopter.
Other notable findings from the report for Australia and New Zealand include:
- Digital Twins and Simulation: 28% adoption in the region, similar to Canada (27%) and Germany (28%).
- Edge Computing: Adoption stands at 71%, ahead of Canada (67%) and Germany (68%), but trailing France (85%) and India (80%).
- Robotic Process Automation (RPA): 35% of companies have already invested, compared with 50% in Brazil and 46% in the UK. A further 41% plan to invest within five years.
- Enterprise Asset Management (EAM): 68% of regional companies have adopted EAM, on par with Germany but behind Brazil (83%) and China (79%).
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