New research shows Australia falling behind in AI race with weak strategies and talent shortfalls threatening national productivity ambitions and workforce security.
Australia is losing ground in the global AI race, with new research revealing the nation’s artificial intelligence readiness has declined significantly over the past year despite widespread recognition of AI’s transformative potential.
ServiceNow’s AI Maturity Index shows Australia’s AI readiness score has dropped to 36 out of 100, falling 10 points as organizations struggle with poor planning, skills shortages, and strategic misalignment. Only 10% of Australian enterprises feel ready to reorganize or innovate their businesses with AI, creating a dangerous gap between ambition and execution.
Strategic disconnect creates workforce anxiety
The research exposes a troubling disconnect in Australian boardrooms. While nearly 82% of organizations plan to increase AI investments in the next fiscal year, fundamental preparation remains inadequate. Only 33% have developed a clear AI vision for their business, 37% possess the right skills mix and talent to execute their strategy, and just 43% have formalized data governance structures.
This strategic confusion is creating significant workforce anxiety. The research found six in 10 Australians fear losing their jobs to generative AI – the highest rate reported globally. Meanwhile, 71% of business leaders haven’t mapped the skills they’ll need to operationalize an AI strategy, with almost two-thirds lacking the resources and talent to execute their AI plans.
“Our nation is at a tipping point and without immediate action, weak AI strategies and talent shortfalls could derail Australia’s productivity ambitions,” says Danielle Magnusson, ServiceNow’s Employee Experience Director for APAC. “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.”
Automation timeline pressures
The urgency becomes clearer when considering the timeline. The research reveals 670,000 Australian roles are set to be automated by 2030, giving organizations just five years to deploy effective AI strategies that protect workforce job security while capturing productivity benefits.
Australia’s tech workforce is expected to grow by only 37% over this period, adding approximately 150,000 new technology roles – significantly below the Tech Council’s goal of 1.2 million roles by 2030. This contrasts sharply with India, where the tech workforce is projected to grow 95% in the same timeframe, driven by substantial domestic digital transformation and talent availability.
The skills gap comes at a critical time when the government expects AI to deliver a tech-driven productivity boost over the next three years. The Productivity Commission is already working on reforms to build public confidence in AI and close talent gaps, but the disconnect between national ambition and business execution continues to widen.
Success stories provide blueprint
Some Australian organizations are demonstrating how strategic AI deployment can work. Mining services firm Orica, which employs over 12,000 people globally, has prioritized decisive AI strategies with phased rollouts to support its workforce.
The company deployed ServiceNow’s AI-powered Virtual Agent across 35 use cases, transforming both speed and quality of IT services. “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.”
The path forward
The research highlights that executives are currently straddling dangerous middle ground – accelerating AI spending without clear planning and metrics, putting both profit margins and workforce security at risk. With breakthrough technologies like agentic AI advancing rapidly, businesses are struggling to keep pace with the technological evolution.
For Australia to realize its AI potential and meet productivity targets, leaders across every industry must act decisively on two fronts: developing comprehensive AI strategies that include workforce planning and investing in the platforms and people necessary to execute those strategies effectively.
The window for catching up in the global AI race is narrowing, but organizations with strong leadership, enterprise-wide AI platforms, and committed upskilling agendas still have the opportunity to transform their operations and secure their competitive position.
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