In short, it’s a mixed bag. Excitement still takes the lead as the number one emotion felt by respondents – albeit taking a dip from 72% to 57%. Fascination takes the silver at 36%. However, alongside the positive sentiment, we’re also seeing an increase in uncertainty and a decline in trust - with trust falling from 25% to 15%. This isn’t altogether surprising in our geography as we await clear regulatory pathways. Once established, we are confident that leaders’ trust and confidence in their Generative AI solutions will increase. Adding an extra layer of intrigue to this situation is the simultaneous decrease in expertise ratings. The ratings for very high expertise have dropped from 11% to 1%, high expertise has decreased from 30% to 16%, and little expertise has jumped from 12% to 27%.

We don’t, however, view this as a negative and predicted this might happen off the back of wave 1. Our thinking was that as leaders began to dive deeper into the world of Generative AI, there would be a realisation that there is indeed a lot to learn – and self-ratings on expertise would consequently go down. We commend Australian leaders for acknowledging the learning process and for being honest about their expertise levels and we’re keen to watch this play out over the next 12 months.

Most respondents (67%) expect to invest up to 20% of their current AI budgets in Generative AI technology, which marks a significant jump from 39% in wave 1. This upward trend in investment showcases the growing recognition among Australian business leaders that Generative AI holds tangible potential for their organisations.

We were also keen to understand where Australian businesses were anticipating investing the dividends of their Generative AI solutions; for example, did they intend to reinvest into R&D or cut costs? The results from wave 2 indicate that Australia’s clear focus is on innovation and growth. 38% of respondents hope that Generative AI will drive innovation opportunities within their organisations. We find this combination of leveraging Generative AI to streamline operations and then using the newfound efficiencies to push the boundaries of innovation particularly exciting for our market. Watch this space, Australia.

In wave 1, organisations identified talent as the major barrier to implementing Generative AI solutions (49%). This has dropped in wave 2 (to 38%) with broader implementation challenges now seen as the primary barrier to entry, with 43% of organisations citing it as their main concern. This finding aligns with our ongoing discussions with industry leaders who are currently grappling with the complexities of moving their Generative AI solutions from concept to production. These challenges include understanding the necessary technological choices and navigating compliance measures that must be adhered to. The shift in focus towards implementation challenges underscores the real-world obstacles faced by leaders as they strive to leverage the full potential of Generative AI. It will be very interesting to see what happens as we move from an era of experimentation to scale in Australia.

For wave 2, we included a new question – expected headcount changes. 48% of respondents predict no changes in the next 12 months and are indeed anticipating an increase in headcount beyond two years. Curiously, only 30% of respondents are expecting to make changes to their talent strategies within a year. We feel this may skew upwards as we move from experimenting to scaling Generative AI solutions, which will impact talent strategies.

On workforce skills of the future, 77% of respondents indicated that the number one skill would be resilience/flexibility. While this may be viewed as a ‘soft skill’, it does make a lot of sense in the current climate. Indeed, it will require a resilient workforce that is open to frequent change and disruption that Generative AI will fuel across Australia. 

What will also be interesting to keep an eye on are skills like ‘coding’. Currently, coding is just behind resilience as the hottest skill of the future, but as Generative AI technologies make coding more accessible to everyday people, we are curious to see how leaders continue to value this skill (or not). 

In terms of the main strategy leaders are taking to meet talent challenges, the number one approach is redesigning work processes (56%). Interestingly, launching AI fluency programs found itself in the second-to-last spot. Our perspective is that AI fluency may be seen through a narrow lens of education on the ‘what’ of AI. However, as businesses solidify how Generative AI can create value for their unique situation, fluency programs will pivot to capture a broader understanding of fluency in the context of their own business. 

Productivity continues to reign supreme as the most desired Generative AI benefit for leaders, with 63% of leaders recognising its value. But what’s also exciting is that enhancing customer relationships comes in second (33%). This finding closely aligns with our conversations with Australian executives over the last year.

The most mature areas of Generative AI implementation in Australia are sales/marketing and product development. However, interest is growing in the strategy and operations space. When we asked about their organisation’s pace of adoption, the number one response was neither slow nor fast, indicating a cautious approach as businesses learn from others in their industry. Perhaps leaders in Australia are still trying to figure out where they sit amongst the wider Australian business landscape. Unsurprisingly, and in line with wave 1 results, there is exceptionally strong enthusiasm for leveraging productivity applications with integrated Generative AI solutions with 80% of respondents expressing interest. 

In wave 1, intellectual property issues were the number one concern for Australian businesses. We don’t find this too surprising as media focus on this topic has diminished in recent times. In its place, the number one concern for Australian business is regulatory compliance. This is something we’re eager to follow in Australia as our nation begins to navigate AI regulation at a federal level. Half of respondents have begun to assess their level of compliance, indicating that regulation will impact leader confidence in the technology and is therefore a key factor in the success of AI solutions in the Australian market.