The next AI super power:

Why Australia’s regional positioning

and global outlook are important to
the future of industry
Dian Tjondronegoro

REGIONAL OUTLOOK

Griffith Asia Institute

 Griffith Asia Institute

Regional Outlook

The next AI super power:

Why Australia's regional positioning and global outlook
are important to the future of industry

Dian Tjondronegoro
 About the Griffith Asia Institute
The Griffith Asia Institute produces relevant, interdisciplinary research on key
developments in the politics, security and economies of the Asia Pacific.

By promoting knowledge of Australia’s changing region and its importance to our future,
the Griffith Asia Institute seeks to inform and foster academic scholarship, public
awareness and considered and responsive policy making.

The Institute’s work builds on a long Griffith University tradition of providing

multidisciplinary research on issues of contemporary significance in the region.

Griffith was the first University in the country to offer Asian Studies to undergraduate
students and remains a pioneer in this field. This strong history means that today’s
Institute can draw on the expertise of some 50 Asia–Pacific focused academics from
many disciplines across the university.

The Griffith Asia Institute’s ‘Regional Outlook’ papers publish the institute’s cutting edge,
policy-relevant research on Australia and its regional environment. They are intended as
working papers only. The texts of published papers and the titles of upcoming publications
can be found on the Institute’s website: www.griffith.edu.au/asia-institute

‘The next AI Super Power: Why Australia's regional positioning and global outlook are
important to the future of industry, Regional Outlook Paper No. 63, 2019.

Acknowledgement
The author would like to thank Professor Rosemary Stockdale and Mr Nehemia Sugianto
for their input.

About the Author

Dian Tjondronegoro

Professor Dian Tjondronegoro is Deputy Head (Research), Business Strategy and

Innovation. He is currently a Chief Investigator of the ARC Discovery project (2019-
2021) for investigating the effectiveness of activity-based work environment to
promote workers' productivity and wellbeing, and ARC Linkage project (2016-2019) for
designing and developing an advanced air quality sensor network. Since 2011, he has been
collaborating with health experts to design mobile health and wellness promotion
applications, funded by the NHMRC, ARC, Young and Well CRC, Cancer Australia, as well
as Ian Potter and Children Health Foundations. His particular contribution is in user-
centred design of eHealth solutions, multimodal data fusion and machine-learning for
promotion of health/wellbeing - including detection of physical activities and
psychological states via video and physiological signals.
 Contents

1. Introduction ................................................................................................................................................. 1
2. Will AI rule the world? ............................................................................................................................. 2

3. AI, big data, IoT and the rise of responsible computing ........................................................... 4
AI and big data.......................................................................................................................................... 4
Big data and the IoT ............................................................................................................................... 5

Why the IoT needs blockchain technology.................................................................................... 5

Cybersecurity will matter even more! ............................................................................................ 6
Responsible computing ......................................................................................................................... 6

4. What can Australia learn from China’s rapid AI innovations? ................................................... 7

What can we learn about Huawei and the US-China trade war? ........................................ 7
5. Australia’s unique role in leading the AI-driven industrial revolution .................................. 9
Responsible leadership for embracing AI-enabled digital transformation......................... 9
Governance for maintaining responsible use of AI .................................................................. 10
Business strategy in the era of AI .................................................................................................. 10
5. Conclusion ................................................................................................................................................. 12
Notes and references ................................................................................................................................ 13
 Introduction

1. Introduction

This year marks the 50th anniversary of the first human to land on the moon, a feat that
was achieved by the US with a desperate motivation to beat the Russians’ space advances.
In today’s digital age, artificial intelligence (AI) has become the battleground of supremacy
between the US and China. Amid the trade war triggered by both political and economic
manoeuvres against each other, the rivalry culminated with the arrest of the daughter of
Huawei’s chief officer and the daughter of its founder in December 2018.

For many, this event raised concerns over privacy and security of data collected from the
use of technology, namely, smart phones and the ‘Internet of Things’ (IoT) (aka everything
connected) and the risk of AI to rapidly analyse large amount of data for misuse. However,
there is very little understanding of what happened and what could be the consequences
in the long term from this event, particularly from the perspective of Australia’s strong
ties with both US and China, and its regional positioning within Asia Pacific. The digital
landscape will soon redefine the next world order.

Hence anticipating and learning from the latest developments will enable Australians to
better prepare for the future, in term of navigating the economic developments, political
alliances, and the next business strategy.

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The next AI super power: Why Australia's regional positioning
and global outlook are important to the future of industry

2. Will AI rule the world?

The story on how Google’s AlphaGo beat a human pro player without handicaps on a 19
by 19 board game in October 2015 1 turns everyone’s attention to AI as the next thing
that will replace human’s intellectual ability to think and conduct tasks. Due to rapid
growth of AI-enabled automations, people become more worried about losing jobs and
that AI/robots would rule the world and eliminate humans—as portrayed by the classic
movie The Terminator. With the power of super-computing and big data storage, the
potential of computers to develop intelligence and processing large amount of information
beyond human can be fully realised sooner. Even the creative ability of humans that was
never meant to be surpassed by machines has been replicated by AI. The most recent
example is how AI enabled FaceApp can simulate ageing effects on the user’s photos while
maintaining a natural and realistic appearance of the original photo.

It is technically possible for AI to surpass human’s ability in many aspects of accomplishing

life tasks from day-to-day to the most complex tasks. Facebook has just launched a multi-
million competition for technology to spot deepfake videos 2, which are AI generated
superimposition of human face on existing videos to generate fake videos that are difficult
to distinguish 3. However, whether AI would eventually rule over humanity is another
matter altogether. Kai-Fu Lee’s book on AI superpowers 4 posited that humans choose to
do a job because it gives them a meaning for life via satisfaction and happiness from how
other people appreciate them for what they contribute in day-to-day living. Humans
would probably never let AI rule the world, even if the technology were advanced in the
next decades. Humans are still the best at providing genuine caring and meaningful
empathy during interactions with other people, which machines can never replace—even
if AI could one day precisely compute emotions. The future of work and professions would
shift due to AI advancements, but there will always be a requirement for applications of
humanistic characteristics.

Douglas Engelbart helped to coin the notion of “augmented intelligence”, 5 whereby

human-computer interaction will shift the role of computer from being a mere
automation tool into an enabler for future knowledge workers to solve complex problems.
Today this concept is even more prevalent as scientists are developing AI applications for
supporting human’s ability to perform tasks and improve quality of life. Just as AI is already
helping us to have an active and healthy lifestyle, it will continue to help us do our jobs
better, by managing the supply-chain of a service provision or product manufacturing
dynamically based on real time data and predictive analysis.

The rise of smart apps in the last decade and the notion of “there is an app for everything”
has helped to pave the way for everyday use of AI technology without even realising it.
People now take for granted those smart features that used to be so innovative when
they were first introduced. For example, Uber app’s ability to connect the most suitable
driver and ride-sharing passengers for a point A-to-point B trip has transformed the
transport industry. Nowadays, people expect that such features are pervasive in a
Calendar app to set reminders for the best time to leave for each meeting based on
estimated travel time of the preferred transport modalities and current traffic conditions.
With the power of the Internet, people can now expect that most smart apps are fully
integrated and connected through the Internet with information, services, people and
social media. Even a seemingly mundane task like planning for a gathering can be
supported by AI to recommend the best time, location and types of activities based on
the preferences and personalities of the people involved.

As all things are increasingly becoming connected via the IoT, an integrated cyber-physical
system marks the era of Industry 4.0, also known as the data-driven fourth industrial

2 Regional Outlook
 Will AI rule the world?

revolution 6. AI and computer algorithms can monitor and control real objects in the world,
enabling autonomous systems for many applications, including smart manufacturing, self-
driving drones for transporting small goods, and robots for social interactions. The future
of work in the era of industry 4.0 will be determined by the entrepreneurs and creative
economy. The largest three regions—the US, Europe and China—will need to manage the
shift in global trade and accelerate technological innovation in order to stay competitive
in the new century.

Responding to Germany’s leadership towards developing a policy around Industry 4.0,

China has developed its own planning for “Made-in-China 2025” 7. Their plan has
extended the core-concept of integration in Industry 4.0 beyond cyber-physical systems
to include integration with industry types and economic sectors, as a new level of
organisation and control over the entire value chain of products lifecycle. In essence, China
wants to capitalise and build on its global leadership in manufacturing operations and its
second largest economic power in the world, in order to establish the nation’s leadership
in the new world order for the digital age. Given China’s undisputed rapid progress in their
socio-economic shift in the last few decades—from poverty to wealth and global trade—
their accumulated experiences can be referenced by both emerging economies and
developed nations to advance technological entrepreneurship that touch on every fibre
of human life and the economy.

Given AI’s power in rapidly analysing big data, the new governance in the global economy
of the Industry 4.0 era will need to focus on digital asset protection. AI will shape the
future of international agreements and laws for managing the new economy and global
trade. Five technology giants in the West (Amazon, Apple, Facebook, Google, and
Microsoft) and in Asia (Baidu, Alibaba, Tencent, Xiaomi, and Huawei) will continue to
dominate the technology industry. Each of these global tech giants has the capital power
to stay in control of the digital economy, driving the industrial revolution and technological
disruptions that shape the behaviour of the global society. As such, the geopolitical and
regulatory landscape will need to ensure trade, cybersecurity, national sovereignty and
economic access are resolved together, tackling the rise of monopoly capitalism 8. There
is an urgent need for all governments around the world to develop policies and strategies
that help protect their citizens’ rights for data privacy and its approved usage.

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The next AI super power: Why Australia's regional positioning
and global outlook are important to the future of industry

3. AI, big data, IoT and the rise

of responsible computing

To fully appreciate why AI can have such a massive impact in our life and in shaping the
future of our society and economy, it is important to learn more about its technologies.
AI can be simply defined as computer’s ability to:

1) process data into useful information,

2) analyse extracted information to support decision making and augment
human’s knowledge,
3) develop cognition and perception abilities, including seeing and listening, which
would enable it to ultimately
4) become autonomous and act according to logic, context, rules and laws.

It is then no wonder that AI is often mentioned in the same breath with big data and the
IoT. AI is a computer’s central core processing unit that enables it to think and act. Just
like how a human’s brain grows its intelligence and ability to make decisions, AI needs to
be trained (by big data), connected to the source of knowledge (produced by the IoT),
and governed by laws and rules (becoming responsibly autonomous).

AI and big data

The two most widely-used methods to train a machine’s intelligence are:

1) programmatically teaching it the established rules and structures based on

human’s experts, and
2) letting it learn by itself based on deep learning algorithms without human’s
intervention.

Such autonomous systems that can self-learn and continuously improve its knowledge
and ability to make decisions is no longer a sci-fi feat. The application of deep learning
algorithms 9 has triggered successive and rapid development of AI implementations, from
helping a computer to perform cognitive tasks (seeing, listening, talking, driving,
interpreting human emotions, etc) to prescribing medicines for patients. Deep learning
enables machines to automatically extract useful features from any data and identify
patterns that can be used to do classifications and make decisions. Since 2016,
researchers have rapidly developed successful innovative applications of deep learning
and demonstrated its capacity to deliver beyond human intelligence in certain tasks, such
as detecting objects from millions of images within a few hours, while at the same time
showing how it can continuously learn new concepts and object classes automatically
based on data.

Deep learning in AI requires many samples to develop its logic, knowledge, perception and
cognitive capabilities. If we think about how medical doctors are trained based on
accumulated and selective cases of previous experiences, AI also requires them to
establish capacity to make decisions based on the current situation that has to be carefully
perceived and analysed. The more data AI can leverage, the more accurate and useful it
can become, which is why the term big data is coined to signify both the requirement and
the capacity of today’s computers to produce and process data and information at high
volume, velocity, variety and veracity. Therefore, big data is like the oil to an AI engine.
Without it, AI would not be able to run properly. On the other hand, without AI, big data
would continue to be underutilised and ultimately discarded as it is humanly impossible to

4 Regional Outlook
 AI, big data, IoT and the rise of responsible computing

extract meaningful information from a massive amount of unstructured data continuously

in a short period of time.

Big data and the IoT

Big data is a terminology coined by scientists and engineers to describe the sheer volume
of information created every second by today’s users—personally and in the work or
social contexts—collectively worldwide. In the past decade, data were mostly stored in
local physical storage, and when they were full, a new one needed to be purchased. Hence,
data management, back-up and cataloguing were rather manual and inconvenient.
Nowadays, most data are stored in the cloud (i.e. the Internet services, such as Apple
iCloud and Google Drive), supporting seamless back up and continuity in terms of data
retention and availability. In other words, people and things would keep generating data,
without the pressure of managing it, as storage becomes cheap and easy to scale up. If
they need more data, the cloud storage is continually extensible, making data storage in
the cloud infinite.

The IoT is the Internet-enabled interconnected network of computing devices embedded

in everyday objects, so that they can communicate via data with or without human
interventions. When everything in the world is connected, we will witness a sharp increase
of data volume generated by users’ daily life experiences, businesses (i.e. transactional
records), and social interactions. Using the cloud storage, big data generated by IoT can
be scaled and managed effortlessly, along with the ever-increasing number of new
devices and data types. However, these raw data cannot translate itself into useful
knowledge, which is where AI would play a crucial role in. As millions of connected things
are generating the big data, it will support AI’s deep learning. IoT-generated big data is
crucial to computationally reveal useful patterns, trends and associations, in order to learn
and interpret behaviour and interactions between human, machines, and the environment.

Why the IoT needs blockchain technology

Given that computing devices will be embedded in all things, having traceable records of
transactions and updates across many devices and stakeholders is very important.

Moreover, these devices will generate information that needs to be integrated,

synchronised and maintained as a collective whole. One inconsistent or missing beat of
data could make the whole ecosystem inconsistent and lose its integrity. Blockchain can
help to maintain data integrity in the IoT, and ultimately ensure consistent and correct
information feeds into the AI-enabled systems. Embedded and small devices do not
usually feature the same level of security control as the desktop devices. Therefore,
blockchain is even more important to maintain the information integrity, ensuring that
data flow is continuously authentic, coming from official sources and going to the
authorised targets after a valid processing.

Information integrity is especially important at the international scale. For example, in a

multi-national manufacturing and supply chain organisation, data from customers around
the world will help AI to design the most efficient manufacturing and distribution plan and
ensure the factory machinery is used and maintained optimally. Blockchain can help to
trace the integrity of information from one component to the other, ensuring managers
can trace the use of accurate and untampered data at different stages of decision making.
As an example, in the context of smart irrigation, data integrity of water usage meter
reading is critical to ensure correct analysis of AI-enabled equitable water distribution in
rural regions.

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The next AI super power: Why Australia's regional positioning
and global outlook are important to the future of industry

Cybersecurity will matter even more!

When AI is used to analyse data generated from millions of interconnected devices to take
actions and make decisions, the quality and integrity of the data must be of the highest
standard. To prevent data theft and tampering, cybersecurity in the IoT era is a more
prominent and challenging issue. The primary challenge is ensuring that safety and privacy
features of each device are sufficient, and the people and organisation are enforcing
behaviour and code of practice that promotes the Internet security.

Most individuals, businesses and services have started to rely on a vast amount of
information to make better decisions and anticipate new challenges. People nowadays
start to give away their privacy in return for convenience and tailored services based on
their preference and contextual requirements. As such, many service providers are now
providing incentives to obtain this information when people are not willing to give it away,
as they are valuable for improving the quality of service and experience. This tendency
will change the future governance and law of private and shareable information. In large
populations and developing countries, such as India, Indonesia and Vietnam, most of its
population cannot afford desktop or laptop computers but are already using multiple small
devices like smart phones, tablets and smart homes devices. As such, the technology for
enforcing cybersecurity is still limited, placing more responsibility on the people to self-
manage safety, privacy and integrity of the information. Hence, user-centred
cybersecurity is even more important to protect the citizens in developing countries.

Responsible computing

Is it possible to maintain code of ethics, privacy and fairness while embracing AI, big data,
and the IoT?

Privacy and processing of personal data is recognised as part of individual’s freedom and
fundamental rights as well as society’s democracy. Europe’s General Data Protection
Regulation (GDPR) is still the most advanced world regulation on personal data
protection 10. Even US’s recently passed new digital privacy law commencing in 2020 has
a more limited scope compared to GPDR, despite being considered more comprehensive
in terms of the law. GPDR is the first legislation that will lead to a “security by design” as
the key acceptance criteria of AI-based autonomous systems. Given the scope and
amount of data required by AI to become effective, GPDR is most likely going to stifle AI-
driven innovations.

Beyond privacy, ethical issues are the hardest to manage due to the potential conflict
between user and social ethical principles for an autonomous system’s decisions. For
example, there is yet a general consensus on which ethical principles need to be
embedded in the control software of autonomous vehicles. The key challenge is to balance
between the freedom of individuals to make responsible decisions and the freedom and
safety of others. In driving contexts, individuals have the freedom to make decisions.
However, in the context of driverless vehicles, it remains a question whether AI should
support individuals to exercise their freedom of choice based on moral attitudes, or
enforce the law by autonomously intervening the decisions and take control of the vehicle
for the sake others’ safety. In the event of road accidents, it remains a question whether
AI should be ethically required to provide all data and information for law enforcement
officers to make a fair decision, or AI should still maintain user’s privacy and allow the
individuals to consent on disclosing specific information when required.

6 Regional Outlook
 What can Australia learn from China’s rapid AI innovations?

4. What can Australia learn from

China’s rapid AI innovations?

The Queensland government has followed New South Wales and Victoria to trial AI facial
recognition applications at sports stadiums to monitor patrons real time. 11 This has
sparked an enquiry by the state’s privacy commissioner, which would be the most sensible
response given that Australia generally seems to prefer a strictly regulated GDPR. It should
be highlighted that San Francisco has become the first major US city to ban facial
recognition technology since May 2019, citing the concerns with civil liberties. In
contrast, China has embraced and widely adopted facial recognition and speech
recognition technologies for enforcing public security and managing society, as part of
their “made in China 2025” initiative to be a world leader in robotics and advanced
information technology 12. The heavy investment of Chinese corporations and strong
support from the government makes China perfect for AI development. China has a
shortage of qualified people to support its ageing population, which can be filled by AI.
Moreover, China’s top-down political system and totalitarian governance will enable rapid
widespread adoption of innovative technologies, which often means overriding existing
solutions. China does not offer its citizens the same legal protection or democracy for
transparent government or corporations. All these factors put China at the forefront of
AI technology, which the world needs to pay attention to.

Rapid adoption of deep learning has shifted the focus of the development of AI capability
from intellectual engineering to data-driven engineering. It is no longer about who can
deliver the next breakthrough algorithms—which only happens every two decades or
so—it is now about who will be able to feed the most data to the machines to develop
intelligence. Given how China’s government is embracing AI to enable citizen surveillance,
while the rest of the world is more concerned with the loss of privacy and ethical use of
surveillance data, China is more likely to be the next AI superpower. Hence, it is important
for Australia to learn how China is rapidly adopting AI to create innovative applications
that will soon spread across the world, as people are looking for novelties to improve day
to day living. For example, China’s adoption of dockless bike sharing as a signature aspect
of urban life in less than one year since its concept would not be possible in Australia. By
comparison with the docked version that has designated bike storage locations, dockless
bike sharing requires people to reveal more personal data to enable more accurate spatial
and temporal tracking of each bike and its user, so that the AI-enabled app can identify
nearby available bikes. This concept does not align with GDPR’s privacy-by-design
practice of responsible computing, and the western decentralised system requires various
government agencies to sign off independent approvals. However, given its novelty and
popularity, many cities in Australia have started to implement it as an urban mobility
option.

What can we learn about Huawei and the US-China trade war?

Huawei is a private company founded in China by a former officer of the Chinese People’s
Liberation Army in 1987. It has since grown into one of the world’s largest technology
giants, and is the only Chinese company to feature in in the annual ranking of the world’s
Most Valuable Brands 2018 compiled by Forbes. 13 Huawei owns the second largest global
smartphone market, rapidly develops its infrastructure and market for the next generation
5G telecommunication that is crucial to usher in the next generation Internet era. Just as
Europe and Asia started to adopt Huawei’s 5G technologies, 14 the US has sanctioned a
ban on Huawei’s technologies citing a concern over its close ties with the Chinese
totalitarian government, which could pose a threat to users’ data privacy.

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The next AI super power: Why Australia's regional positioning
and global outlook are important to the future of industry

Given how AI can rapidly churn out big data to analyse information, unsolicited access to
data could pose a major threat to people’s safety and general wellbeing, much beyond the
danger of data privacy. Since the US’ ban, Australia has generally adopted a position to
also exclude Huawei’s technologies from the roll-out of 5G network. The decision to
follow the US could negatively impact Australia’s bilateral relationship with the Chinese
government, which could potentially have a negative impact on Australia’s overall
economy. 15 For example, one of the aftermaths from the US-China trade war, is the
decline in Chinese (RMB) currency, which in effect brought the Australian (AUD) currency
to its lowest level in the last 30 years. 16 This demonstrates the significant importance of
Australia’s future adoption of China’s AI innovations, both in terms of the perceived
potential risk towards data privacy - due to Chinese government’s control over data
access, and the perceived economic alliance that could work against the alliance with the
US.

8 Regional Outlook
 Australia’s unique role in leading the AI-driven industrial revolution

5. Australia’s unique role in

leading the AI-driven
industrial revolution

Amid the current trend of global economic downturn and financial uncertainties,
accelerated by the US-China trade war and Brexit, Australia must explore
entrepreneurship and innovation as a way to diversify its economy. The CSIRO has
predicted a $315 billion potential market in Asia Pacific for digital innovation. 17 As AI is at
the centre of the digital economy, our stance on responsible computing would ultimately
determine whether we can compete with the rest of the world in terms of realising the
full potential of autonomous systems to innovate businesses and services. The key
function of AI is to improve efficiency and release people from mundane tasks to do what
humans are best at. For example, AI-enabled healthcare could theoretically provide much
better diagnosis due to the machines’ capacity to analyse millions of relevant data and
evidence, therefore future healthcare professionals can focus on providing a more
integrated care based on human characteristics, such as encouragement, empathy and
other psychological support.

Australia’s strength and influence in the world economy is underpinned by its open and
globally integrated economy, making it a trusted partner for trade and investment. 18
Australia hosts the operations of nine of the top ten Fortune Global 500 and eight of the
top ten Forbes Global 2000 companies. Our top five trading partners are China, Japan,
USA, Korea and India. These figures indicate that Australia has both global and regional
(Asia) influence to shape the future of AI-transformed businesses. Notwithstanding
Australia’s commitment to play a leading role in the forefront of AI technical research and
development, we should play a pivotal role in leading the future of AI business
transformation in terms of leadership, governance, and strategy. Australia must help
navigate the future of AI-enabled business transformation, so that it can continue to be
a trusted partner in the global economy.

Responsible leadership for embracing AI-enabled digital transformation

AI adoption would transform the entire business, disrupting the value chains,
organisational structures, operational processes and revenue models. Business and start-
up leaders can observe and learn about the importance and advantages of embracing
disruptive technologies from the early adopters, but most importantly, they must work
on the people, organisation, leadership, governance, policy and strategy to make digital
transformation happen. Successful digital transformation will lead to empowered
employees, engaged customers, transformed products and optimised operations. This
requires leadership at the critical intersection between the viability (business), feasibility
(technology), and desirability (human factor).

Australia is uniquely positioned as a trusted partner to enable responsible leadership of

digital transformation in top global businesses, while providing a regional perspective and
expertise to work with the top five export markets in Asia. Learning from the sequence
of events that led to the ban on Huawei’s 5G technologies out of concerns on data privacy
and espionage, Australia should have its own strategy for China’s AI empowered
businesses, instead of reacting to the decisions made by the US or Europe. The principle
of responsible leadership is to make sustainable business decisions that take into account
the interests of all stakeholders—including clients, employees, shareholders, the
environment, societies and the future generations. Given that the Australian National

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The next AI super power: Why Australia's regional positioning
and global outlook are important to the future of industry

Broadband Network (NBN) project has been perceived as a complicated, tedious and
unsustainable business strategy to deliver such an ambitious goal, reinvigorated
responsible leadership principles must be adopted for the next digital transformation
centred around AI—big data and the IoT.

Governance for maintaining responsible use of AI

Considering Australia’s geographical position (to Asia), and our strong alliance with China,
the US and Europe, we can play a significant role towards championing for the ethical use
of data in AI innovations, which would depend on many local contexts. Australia is a hub
of multi-cultural societies, therefore can provide a suitable environment for co-designing
policies and trialling new systems, without necessarily expanding into a large-scale
market. In terms of culture, belief, and language sensitivity, Australia’s demographics and
regional location would enable us to learn whether an innovative AI-enabled business or
service would be acceptable by the users from different cultural backgrounds.

The role of government’s law and regulation is most crucial to control responsible use of
AI and its related technologies. The Queensland government is already committing into an
AI hub to be located in Fortitude Valley, Brisbane. This hub could play a significant role—
working in conjunction with research centres and universities—in establishing Australia’s
position as the industrial transformation hub for an AI driven industrial revolution. Within
the Gold Coast Health and Knowledge Precinct IntelliHQ 19 is exploring the use of big data
and AI for improving precision healthcare. Interdisciplinary expertise can investigate the
full spectrum of AI’s impact in disrupting business and future of work.

Business strategy in the era of AI

Global consulting companies are promoting strategies that Australia should adopt for
digital transformation. McKinsey 20 suggested strategies for leaders to build AI-powered
business responsibly—focussing on preparing, motivating, and equipping the workforce.
First, educating people about the importance of AI and how workers will fit into the new
culture. Second is anticipating and addressing the organisation’s specific barriers to
change from the beginning. Third is budgeting equally for the AI technology and the
integration and adoption process. Fourth is balancing the timeline and efforts for
feasibility, time investment and value to pursue AI initiatives. Deloitte suggested three key
success factors for digital transformation:

1) The power and standing to drive change top down with executive and
supervisory board visibility;
2) Sufficient time frame – usually 2-5 years - to perform the transformation while
focusing on digital leadership as a principal role;
3) The right vision and personality traits to connect digital transformation with
tangible business goals with an acute awareness of profit and loss control. 21

However, these steps are not meant to be adopted in a text-book style, as there are
many issues and factors that need to be incorporated. The law, policies, as well as rules
and regulations designed by Australian government has a crucial role for leaders to
implement successful business strategies in the era of AI.

Australia’s globally renowned political and economic alliance would enable many AI
innovations for multi-nation corporations with sustainable value-chain across the Asia-
Pacific regions and beyond. Australia needs to respond in kind with the rest of the world
to accelerate the progress to transform businesses with AI capabilities. By establishing
and cultivating AI driven industrial transformation hub, Australia should invest in facilitating
international researchers and entrepreneurs to design, develop, launch and trial innovative
products in collaborations with our world-class experts. The government should provide
incentives and simpler process to encourage investments for research and developments.

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 Australia’s unique role in leading the AI-driven industrial revolution

In the long term, Australians can become the world leader to embrace the AI innovations
that are more contextually suitable in Asia-Pacific regions and beyond. Australia is already
a keen adopter of responsible computing and our role of promoting GDPR as a key
guideline of data privacy for AI innovations will best position our researchers and
entrepreneurs to implement a more responsible and sustainable future of businesses and
services that promote the use of AI but still embrace the value of humanities and enable
people to still do what humans are best at.

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The next AI super power: Why Australia's regional positioning
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5. Conclusion

This report has explored the potential of AI to take over the world and reshape the next
global super power. The related technologies, including big data, the IoT and blockchain
are fundamental for fully realising the massive impact of AI in the social and economy of
the future. Australia can definitely learn from the rapid AI-enabled business innovations in
China, and play a more pivotal role in responsible leadership for developing the most
suitable and contextually aware business strategy and governance in the AI era.

GAI is well positioned to embrace AI business transformation as part of the current and
future research directions. In agribusiness, AI can enable real-time monitoring of data and
records to promote traceable and sustainable meat production. Based on data collected
across the value chain processes, AI can be used to analyse and recommend strategies
for improving efficiency and reducing wastage. Similarly, in healthcare, AI can assist expert
and complex decisions while synergising knowledge across organisations. Knowledge
management in organisation is crucial to administer how distributed AI intelligence
architecture can replicate experts-apprentice collaboration in solving complex problems.

The intersection of cross-disciplinary expertise in the technology, business, social and

economic aspects of AI transformation is at the most crucial stage. The future of society
and humanity will increasingly depend on how successful we are in adopting AI into
business and other areas of life. Australia has a key role to play and the time to take action
and leadership is now.

12 Regional Outlook
 Notes and references

Notes and references

1 Alpha Go, n.d., The story so far, accessed at:

https://deepmind.com/research/case-studies/alphago-the-story-so-far.
2 CNN, 2019, When seeing is no longer believing: Inside the Pentagon’s race against
deepfake videos, accessed at:
https://edition.cnn.com/interactive/2019/01/business/pentagons-race-
against-deepfakes/.
3 Schroepfer, M, 2019, Creating a dataset and a challenge for deepfakes. Facebook,
accessed at:
https://ai.facebook.com/blog/deepfake-detection-challenge/.
4 Lee, K, 2019, AI Superpowers, at: https://aisuperpowers.com/
5 Engelbart, D, 1962, Augmenting Human Intellect: A Conceptual Framework,
accessed at: http://dougengelbart.org/content/view/138.
6 Lasi, H, Fettke, P, Kemper, H-G, Feld, T and Hoffmann, M, 2014, ‘Industry 4.0’,
Business and information Systems Engineering, vol. 6 no. 4, pp. 239-42.
7 Li, L, 2018, ‘China's manufacturing locus in 2025: With a comparison of “Made-
in-China 2025” and “Industry 4.0”’, Technological Forecasting and Social Change,
vol. 135, pp. 66-74.
8 Araya, D, 2019, ‘Governing the Fourth Industrial Revolution’, Forbes, accessed at:
https://www.forbes.com/sites/danielaraya/2019/03/12/governing-the-
fourth-industrial-revolution/#6b0d50704b33.
9 LeCun, Y, Bengio, Y and Hinton, G, 2015, ‘Deep learning’, Nature, vol. 521 no.
7553, p. 436.
10 Inverardi, P, 2019, ‘The European perspective on responsible computing’,
Communications of the ACM, vol. 62, no. 4, p. 64.
11 Bavas, J, 2019, ‘Facial recognition quietly switched at Queensland stadiums,
sparking privacy concerns’, ABC, accessed at:
https://www.abc.net.au/news/2019-06-05/facial-recognition-quietly-
switched-on-at-queensland-stadiums/11178334.
12 Zaagman, E, 2018, ‘China's computing ambitions’, Communications of the ACM,
vol. 61, no. 11, pp. 40-1.
13 Forbes, 2019, ‘World’s most valuable brands #97 Huawei’ Forbes, accessed at:
https://www.forbes.com/companies/huawei/#c0288d75d268.
14 BBC, 2019, ‘Huawei: which countries are blocking its 5G technologies’, BBC News,
accessed at: https://www.bbc.com/news/world-48309132.
15 Zhang, MY, 2019, ‘Blocking Huawei’s 5G could isolate Australia from future
economic opportunities’, The Conversation, accessed at:
http://theconversation.com/blocking-huaweis-5g-could-isolate-australia-
from-future-economic-opportunities-117968.
16 Kehoe, J and Housego, L, 2019, ‘Australia to “pay the price” for US-China trade
war’, Financial Review, accessed at:
https://www.afr.com/policy/economy/australia-to-pay-the-price-for-us-
china-trade-war-20190806-p52ea5
17 CSIRO, 2018, Digital innovation: Australia’s $315B opportunity accessed at:
https://www.data61.csiro.au/en/Our-Research/Our-Work/Future-
Cities/Planning-sustainable-infrastructure/Digital-Innovation.
18 Austrade, 2019, Global Ties, accessed at:
https://www.austrade.gov.au/International/Invest/Why-Australia/Global-Ties.
19 See IntelliHQ http://www.intellihq.com.au/.

20 Fountaine, T, McCarthy, B and Saleh, T, 2019, ‘What it really takes to scale artificial
intelligence’, McKinsey Digital, accessed at:

Regional Outlook 13
The next AI super power: Why Australia's regional positioning
and global outlook are important to the future of industry

https://www.mckinsey.com/business-functions/mckinsey-digital/our-
insights/digital-blog/what-it-really-takes-to-scale-artificial-intelligence.
21 Deloitte, 2015, Survival through digital leadership. Deloitte Digital, accessed at:
https://www2.deloitte.com/content/dam/Deloitte/de/Documents/technology
/Survival%20through%20Digital%20Leadership_safe.pdf.

14 Regional Outlook
GRIFFITH ASIA INSTITUTE
Griffith University Nathan campus
Nathan Queensland 4111, Australia

Phone: +61 7 3735 3730

Email: gai@griffith.edu.au
CRICOS No. 00233E

griffith.edu.au/asiainstitute