This month’s federal budget made a familiar promise: artificial intelligence (AI) will help lift Australia’s productivity.

But for many Australian firms, especially small and medium-sized businesses, “using AI” still means experimenting with a generic chatbot to draft emails, summarise documents or write marketing copy. That might save time and lower costs. But it’s unlikely to transform national productivity on its own.

For Australia, the more exciting opportunity sits beyond such generic tools. It is a story of research partnerships, commercialisation pathways, and the developers, researchers and startups that turn AI into specialised solutions.

Measures announced in the budget could make things easier for the AI ecosystem trying to move this vision forward. But there are also concerns about how tax reforms could impact incentives for AI start-ups, and the abrupt pausing of an existing grant program.

Moving beyond chatbots

AI can’t magically increase Australia’s productivity all by itself. Any gains will come from how people put it to work to solve specific industry problems.

For example, a building company might already be using generative AI to help with tasks like drafting tenders. But they’ll get a larger productivity boost from using more tailored AI to forecast supply chain delays, detect site safety risks and manage their costs and scheduling in real time.

It’s a similar story for........

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