What will it take for Australia to get on board with digital?

4 minute read 6 Sep 2019
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EY Oceania

Multidisciplinary professional services organization

4 minute read 6 Sep 2019

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Humans often make one of two mistakes when they think about the future: they either overestimate the good or they underplay the bad. It’s called Optimism Bias and while it has some benefits, it also introduces the risk of real miscalculations. For example, “We think … yes there’s a talent shortage but the market will sort it out and provide whatever we need,” former psychologist and EY Oceania Markets Managing Partner Jenelle McMaster says.

In the digital context, the challenge we currently face is underestimating the risk posed by not adapting to technological change. At a personal level, McMaster says, “this impacts someone’s employability, potentially missing out on new jobs or roles that require new or different skills. Organisations, meanwhile, risk becoming redundant because they’re not moving at the same pace as those who have accepted the need for rapid change.”

EY Fellow for Digital Society and Innovation, Uschi Schreiber, says, “that while Australia is a fantastic country with an educated population, innovative talent, quick technology adoption, and highly developed digital skills”, the assumption that we’ll be fine doing as we always have, will fail us.

She warns that data from the OECD, World Bank and World Economic Forum all point to a decline in how well Australia is managing the transition away from a resource-sector supported economy to a digital one. “That’s why we need a conversation as a nation, [to] develop a plan for Australia’s success in a global digital economy.”

The share of the pie for those who succeed is enormous. Artificial intelligence alone represents a $2.2 trillion opportunity for the Australian economy by 2030, which would go a long way in helping solve some of our greatest challenges such as those faced in the energy sector, agriculture and financial services. According to EY Asia-Pacific Advisory IoT Leader Jeffrey Feldman “Ninety-nine per cent of the time when businesses have stumbled with emerging tech, it’s because the ‘why’ is missing, instead of leading with technology and asking ‘what’, you should be focusing on the ‘why’. Why is it important for your organisation? Why would your customers care?”

The estimated value of Artificial Intelligence in the economy by 2030

AU$2.2 trillion

AI represents huge potential for growth, helping to overcome challenges faced in sectors such as energy, agriculture and financial services

In the past 12 months IoT connectivity and big data have become significant business priorities across a range of sectors. But, Feldman says, “what marks the successful transformations from those that are struggling, are teams that trial the substance of the technology – what it’s meant to do and why ­while applying their own business lens. And they’re using fail fast mentalities … if it works, scale it and if not, pull the pin.”

 “Your approach to technology adoption must be led by your business strategy then you figure out how technology can serve that strategy. And when businesses are considering the myriad of choices for how and why to adopt new technology, it’s the focus on the customer that should cut through those choices,” as EY Oceania Managing Partner for Consumer Markets, Jenny Young points out. 

“Customer expectations of service have also changed forever. They want cheaper, faster, better and more personalised service. The market is transparent and based on a connection economy – consumer voices can be heard, and peer reviews are more prominent, and valued, than ever,” she reiterates. 

But the biggest question of all is, what are we willing to give up? EY Fellow for Trust and Ethics, Clare Payne, says, “ethics as it applies to digital transformation is about making it common practice for everyone to be constantly asking ‘is it right?’. We [must] stay aware of the ethical goalposts and know when we are shifting them,” she warns.

Christina Larkin, Director in the Sydney EY office with extensive knowledge in AI technology,  echoes the concern noting that Australia has been slow off the mark with its move to a digital economy and, with little governance and regulation, there are already issues arising. “Requirements to protect human and consumer rights are not being built into the business case for these products,” Larkin says.

She puts the onus on those wanting to use technology, to transform responsibly or risk destroying corporate and consumer trust in the technology itself, and in turn, undermining the economic benefits.  If that happens, she says, the risk is “we might actually miss the AI boat”

McMaster agrees: “How you face [digital transformation] and turn your optimism bias around will determine how well you fare in the coming years.”

Summary

Digital transformation presents both an opportunity and a challenge. We face big questions about risk, implementation, strategy and ethics.

Of course, we can’t answer these questions in isolation. We need your help, we need businesses, government and individuals to come together to talk and think hard about the issues that will ultimately affect all our futures.

We’re on a mission to build a better working world and we would love you to join the conversation.

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By

EY Oceania

Multidisciplinary professional services organization