Responsible AI will become business strategy.
REPORT | May 19, 2022 | 22 min read
Finding Australia’s new common wealth: Why ethical AI, human-machine teams, digital identity and diverse perspectives will transform the next decade
By Dr. Catriona Wallace, AI expert and professor
2022 is a breakthrough year for digital investments. Global advances in artificial intelligence (AI) are making the technology cheaper and more widespread. Corporate spending on information technology will rise for a third straight year, increasing just 65% globally compared to 2020. At the same time, societal and cultural trends are changing how individuals think about and engage with technology.
Shifting mindsets and accelerating tech adoption are setting the stage for a decisive decade. How organisations plan and respond today will make or break future success.
This report outlines evolving attitudes and technological advances that executives must consider when investing for short-, mid- and long-term growth. It will arm executives with insights to attract talent, win customers, and lower costs by connecting people, processes, and systems. Four trends are identified and analysed, with recommendations for how organisations should respond. In summary:
These global trends represent a golden opportunity for Australia. The opportunity to deliver measurable uplift for both business and society is clear. However, while the benefits from transformational technology investments are increasing, just 16% of executives say they have a clearly defined strategy for digital. As the nation builds a new-look digital economy over the next decade, shared value—a common wealth—will only be realised if leaders make the right decisions today.
Over the next decade, AI will be widespread in life and work. This will improve everyday activities, making tasks faster, smarter, and simpler. The best experiences will share common traits, making the line between ‘customer’ and ‘employee’ experiences blur, then disappear.
AI experiences—an explainer
Today’s AI applications and capabilities emerged from countless, often interconnected advances in computing, software programming, robotics, and research. AI experiences are used to automate processes, improve decision making, and engage more effectively with customers and employees.
Today, the average Australian interacts with AI around 100 times per day, according to SurvivAI. This includes many everyday processes and interactions that make our lives easier on a daily basis. Examples include:
In the future, we will interact with AI in almost every activity and function we perform. It will be everywhere, all the time, often without us knowing. We will interact with AI hundreds of times a day, as well as when we sleep.
While it might seem ironic, an emerging body of evidence and literature suggests that AI-driven experiences will allow people to be more human. Technological progress will give employees and customers more time to focus on what they value, more freedom to choose where and how they work, and better tools for business and society to manage resources productively.
This will create shared value for individuals, who will be more engaged and fulfilled. Businesses will be more productive and profitable. They will also attract more loyal customers and employees. Society as a whole will benefit from more innovation and better management of resources.
Culturally, attitudes to change will see two distinct groups emerge. Digital experiencers will embrace technology with few limits. Organic experiencers will demand more choice in how they interact with brands and employers.
This group will reject digital-only models, preferring to pick and choose between analogue and digital touchpoints based on the situation or task at hand.
The four trends identified throughout this analysis will provide the foundation for successful operations, experience design, and delivery. They will be made possible through the rapid emergence of AI.
By understanding these trends, leaders can balance investments in tech with process change management for people, and learn how to maximise the impact of technology by integrating systems and teams more effectively.
The first, foundational step for AI acceptance and adoption is creating the ethical frameworks and governance that determine how, when, and why AI can be used, and what it can be used for. Responsible AI is the umbrella term for making appropriate decisions when adopting AI, to ensure principles like trust, transparency, privacy and value, as well as who benefits from AI, are considered in its design and execution.
In Australia today, there’s a trust gap between citizens and business leaders when it comes to AI. Just 22% of Australians trust how organisations are implementing AI. Yet 96% of Australian executives say AI is becoming pervasive, according to the Accenture Technology Vision 2022 report.
Successful innovation will be built on trust. Regulators will step up pressure and take stronger action against irresponsible operators. More broadly, how employees and consumers perceive ethical standards will play a more influential role in their choices. Forward-thinking organisations and leaders should act now to unleash the full potential of AI.
Responsible AI will become business strategy.
Increasingly, responsible AI will become business strategy. Organisations will need to deploy responsible AI strategies that reduce the risk of causing unintended harms to employees or customers. How do you make sure things do not go wrong? How will responsible AI governance be scaled? How are data sets sourced and refreshed? How do you make sure limits are set to be inclusive and fair? What are the unknowns and how accurate are the models? How can employees or customers challenge AI when they see an issue?
Employees and customers will choose to work with brands that demonstrate, not just talk about, ethics, accessibility, and fairness. Transparency will be integral to business, sustainability, and DE&I roadmaps and strategies. And responsible use of AI will increasingly be required by law. Voluntary guidelines like the Australian Government’s AI Ethics framework will be replaced by minimum required standards.
The basic elements of ethical AI include:
AI-first approaches will help organisations engage employees and customers more effectively. Perceptions of AI will shift from an abstract technology to a valued colleague or virtual assistant.
AI will help workers and customers make more informed decisions, faster. It will provide recommendations on next best actions and will surface relevant information when it’s needed. It will be conversational, accurate, and helpful—not the awkward, unclear, and frustrating experience that often characterise today’s AI experiences.
New organisational structures will emerge that include human, human assisted machine assisted (HAMA) and digital labour. Teams will be regarded as being human-AI.
Teams will be flexible, and technology and AI will enable organisations to do a better job of understanding and caring for their employees and customers. By spreading work more evenly and efficiently between humans and machines, companies can increase employee productivity and wellbeing while lowering costs.
Human-AI teaming will create opportunities for people to be more human at home and work. They will have more time, more choice, and more space for creativity and empathy. This new paradigm will have widespread ramifications:
Technological building blocks of AI-human teaming include:
As a result of the pandemic and forced time in isolation, employees and customers have had more time to focus on themselves and decide what’s important to them. Two distinct mentalities have emerged from this trend. Digital Experiencers embrace technology in all its forms, preferring the speed and convenience it offers. Organic Experiencers, potentially up to 25% of the population, tend to favour human interactions, and greater choice between analogue and digital touchpoints, dependent on their specific needs.
These varying preferences and demands mean individuals will have clearer digital identities, and greater control in how and when they are shared with employers and brands. It will also blur the line between employee and customer experiences until they are almost indistinguishable.
As a result, employees will have closer relationships with their employers, who will know them better and have the ability to provide them with better experiences. Personalised experiences at work will make employees feel as valued as the customers they serve.
Employees will spread their focus more broadly between work and personal interests or ‘side hustles’. Many professional interactions will happen virtually or in the metaverse. They will expect more guidance from employers on what to focus on, what is important, and finding balance.
Customers will be more discerning about where and how they do business with brands. They will value brands that understand their interests, preferences and habits. Brands that demonstrate the right behaviours and provide a meaningful value exchange will be entrusted with personal information needed to deliver personalised experiences and take pre-emptive actions to meet customer needs as or before they arise.
The following cultural shifts will significantly impact how effective technology will be, and how readily new tech is accepted.
AI-based tools that can support more personalised experiences include:
Society is witnessing greater polarisation on a wider range of issues, exacerbated by new online communities and social media. 61% of Australians say people are incapable of having constructive and civil debates about issues they disagree on. Almost half of Australians are worried about what their friends, family and colleagues will think of them if they express their political views on social media.
This makes it harder to create shared understanding and broad cooperation at work. As a result, teams may see greater conflict, and organisations will find it harder to build cohesion across the workforce.
Abundant research has shown that diversity yields stronger teams, better results, and increased profitability. In the AI-powered future of work, Diversity, Equity and Inclusion (DE&I) strategies will be essential to help coworkers disagree respectfully. Generational and social divides will emerge, but not as we might expect. Attitudinal traits will predict preferences and behaviour more accurately than demographic categories. Fostering a sense of inclusion will be essential, as the quality of work experiences will determine whether employees remain and thrive, or vote with their feet.
These trends have varying implications for managers, employees and society:
AI-based applications that can support a diverse, yet unified workforce include:
From recent discussions with C-suite executives, three topics are top of mind. All are grappling with: effectively managing digital transformation to deliver value and return on investment; attracting, retaining and managing talent in a hybrid environment; and making supply chain logistics efficient and reliable. Across industries, leaders are looking to AI to help tackle these priorities. This report provides recommendations that will directly support these areas.
This report has outlined four trends that will determine how businesses, managers, consumers, employees, citizens, and stakeholders will interact in coming years. By understanding the attitudinal shifts that are taking place, and how these will impact technology adoption and its potential, executives can plan, strategize, and invest more effectively.
Although the horizon for these trends may extend as long as a decade, the roadmap starts now. Many of these changes are currently taking hold. Many more will come to pass in coming years. For example, The World Economic Forum predicts that by 2025, machines will do more tasks than humans at work.
Wise companies will not use automation to reduce human employees. Recent research has found that companies that invest the most in AI are growing faster, expanding into new markets, and hiring more people. The returns are clear. To begin, executives should:
“Australia has an insatiable appetite for making things work better. In less than ten years, ServiceNow has helped more than 80% of the ASX 200 engage employees and customers in new ways. In every state and sector, I’ve seen our customers and partners hungry for innovation. I’ve witnessed a clear appreciation of technology’s ability to drive growth, resilience, and improve experiences.
“During the pandemic, ServiceNow data shows this mentality supercharged. Through a proprietary ‘Value Scan’ process analysing data from the ServiceNow Platform, we saw Aussie organisations use our software and automation more intensively, and across more use cases, people, and teams.
ServiceNow Value Scan: Australia data 2019-2020
What: By analysing data from Australian organisations hosted on the ServiceNow Platform, the Value Scan shows a strong increase (15.2%) across three dimensions of reach, workload, and automation, between 2019-2020.
During this period, automation levels increased by 15.3% as increased demands forced companies to automate at scale. At the same time, the acceleration of hybrid work combined with health and safety concerns fuelled the rapid development of custom apps with the ServiceNow Platform.
Pandemic-fuelled surges in remote working, distance learning, and online shopping, also saw the number of digital solutions run on the Now Platform increase by 34.6%. This was the result of customers applying technology to a greater number of use-cases to better connect people, processes, and systems, increasing ServiceNow workloads across IT, customer, and employee operations.
How: ServiceNow’s Value Scan measures key performance indicators for more than 7,000 companies and government agencies that host operational data on the ServiceNow Platform. In Australia, data comes from more than 370 large organisations, across all industries. This provides unique visibility into how organisations are using AI and machine learning to transform operations. The Value Scan analyses data covering three dimensions:
Motivated by the collective pursuit of achieving the ultimate work-life balance, Australians are united in making everyday tasks easier, faster, safer and more meaningful. After the challenges of the past few years, people have even greater expectations for how they want to get things done.
“Today, every business is a digital business. Global advances in AI, analytics and augmented reality promise new ways to connect people and streamline processes. Emerging technologies like the metaverse and Web 3.0 have the potential to radically reshape our next decade. With booming regional communities and an economy hungry for skills, Australia is ideally placed to benefit in this digital gold rush.
“In this environment, AI presents huge opportunities. But success is fragile. Investments must be careful, with clear returns. As they invest, executives must consider how systems, operations, and people are working in harmony, or customer and employee experiences will suffer. In a hypercompetitive environment for spending and skills, bad experiences lead to bad results.
“When ServiceNow engaged leading AI expert and entrepreneur, Dr. Catriona Wallace, to explore emerging workplace trends, we did not expect the shifts she has uncovered. But as the analysis makes clear, we can expect them to propel Australia’s society and economy forward.” — Dave Wright
This analysis has been conducted by Dr. Catriona Wallace, executive director of the Gradient Institute (Responsible AI) and adjunct professor at the Australian Graduate School of Management. As one of Australia’s leading AI entrepreneurs and experts, Dr. Wallace has distilled insights from meta-analysis, interviews with business executives, and primary and secondary research to identify the trends that will drive Australia’s next phase of economic growth.