Australia lags regional peers in AI adoption

Australian organisations are lagging behind their regional peers in adopting artificial intelligence (AI), putting A$142bn worth of economic opportunity at risk, a new report has found.

The research, a collaboration between tech giant Cisco and the Governance Institute of Australia, was initiated after Cisco’s internal surveys identified Australia as an AI laggard.

Carl Solder, Cisco’s chief technology officer for Australia and New Zealand (ANZ), said a lack of governance readiness was a primary reason for the slow progress.

The joint research uncovered huge governance gaps and uneven adoption of the technology, said Daniel Popovski, the AI, cyber tech and policy lead at the Governance Institute.

He said key issues included the use of unauthorised shadow AI tools by employees, a lack of formal training, and uncertainty about how to measure the return on investment (ROI) from AI.

The survey found that 64% of organisations have not provided any AI training, while a staggering 93% cannot effectively measure its ROI.

One research participant countered this, suggesting that questioning the ROI of AI reflects an old-school mindset and that what is really at stake is the right to be in business tomorrow.

Fear is also a factor. Some organisations see adopting AI as more risky than not adopting it, a perception possibly fuelled by media coverage of “AI gone wrong” stories, Popovski suggested.

Popovski said risk managers should be most concerned about shadow AI and the use of consumer-grade tools at work, which can expose companies to data and security risks.

He argued that risk governance professionals need to be at the centre of AI deployment to address these gaps. This includes being involved in developing and communicating the organisation’s AI strategy, as well as playing a role in AI governance.

However, risk professionals don’t necessarily know much about IT, so they may need training and other knowledge-building activities as much as the rest of the organisation, Solder noted.

To move forward, David Siroky, Cisco’s head of AI for ANZ, recommended creating interdisciplinary AI governance committees to address the varied concerns across a business. And rather than developing a separate AI strategy, AI should be embedded in the business strategy, he said.

While appropriate controls on the use of AI are important, so is raising AI awareness across the workforce, because some of the best ideas can come from the people who are doing the work.

He also pointed to a warning from research firm Gartner that organisations often prioritise exciting but complex AI applications over simple ones. The real priority, he said, should be to implement easy, high-value uses for the technology first.

Small businesses – which make up 98% of Australian businesses – are particularly behind in AI adoption, Popovski observed, adding that government bodies like the National AI Centre are now offering more guidance for smaller firms.

Ben Dawson, Cisco’s senior vice-president and regional president for Asia-Pacific, Japan and Greater China, said that while there are “some bright spots”, Australia’s AI adoption is proceeding more slowly than previous technological transitions.

“Companies ignore it at their peril,” he warned. “Ultimately, AI is going to have a huge impact on everything we do.”

Australian organisations that have adopted AI include graphic design giant Canva, which is training its staff on a low-code AI platform and agentic AI tools, as well as insurance firm Suncorp, which has deployed AI-enabled chatbots to serve customers through some two million conversations a year.