Putting AI at the centre of Australia’s next phase of industrial transformation

There is no shortage of talk about AI, what it can do, how quickly it is moving, whether we are keeping up, and, inevitably, when it might take over.

Turning AI into productivity, a report released this week, creates space for a more useful conversation: not simply about adopting AI, but about what it will take for AI to lift productivity in the real economy and build lasting prosperity.

Australia will not become more prosperous simply by using more AI. We will become more prosperous if we use AI to build industries, capabilities and jobs here in Australia.

Three points stand out.

First, we need to look beyond generative AI. The bigger opportunity is industrial AI: AI embedded in products, production systems and services, in manufacturing, energy, transport, logistics, health and agriculture.

Think about an Australian manufacturer using AI to detect faults before equipment fails, reduce waste, improve energy use and help skilled workers make better decisions. The value is not the algorithm on its own. It comes from combining the technology with engineering knowledge, good data, changed workflows and people who know how the operation actually works.

Second, connection matters. Good research, capable firms and talented people are not enough if they remain disconnected. We need ecosystems, and institutions, that connect research with industry, demonstration, procurement and adoption. Proximity helps. But relationships, shared purpose and the capacity to turn ideas into use matter more.

This is a natural agenda for UTS. We are a technology university with a strong record of working across disciplines and with industry. We do not want simply to comment on AI adoption. We want to help Australia do it well, to turn research and technological capability into stronger industries, better jobs and practical impact.

That is also why we are developing an Industrial AI Cooperative Research Centre bid with industry and research partners. The proposed CRC is focused on embedding AI in physical production systems and building Australia’s advanced manufacturing and sovereign capability. It is a practical way to bring research, industry demand, skills and adoption together.

Third, adoption is an organisational challenge, not just a technical one. Leaders need to know where AI will genuinely add value, how work needs to change, how people will be involved, and how risk will be managed.

Buying a tool is easy. Changing an organisation is hard.

That point is especially important for smaller firms. They need practical help: access to facilities, demonstrators, trusted advice, management capability and customers willing to be early adopters.