If you think that trade wars or climate change pose the biggest threats to the global economy, then you could be missing the elephant in the room.
We’ve all heard about artificial intelligence (AI) - most of us have used AI.
But what we’re yet to truly conceptualise is what the future impact of AI will be (spoiler alert, it doesn't look very utopian).
The insight comes following the Microsoft's CEO Summit in Seattle where Australia's top business leaders, including Commonwealth Bank CEO Matt Comyn, NAB's Andrew Irvine, and Telstra's Vicki Brady, got a taste of the future.
The annual event, a coveted invitation for global corporate heavyweights, has become a critical bellwether for understanding the trajectory of technological change.
Comyn, who dedicated a significant portion of his recent US tour to immersing himself in the tech landscape, told the Australian Financial Review (AFR) of a concentrated and intense focus within the US on tackling fundamental technological challenges, particularly in the realm of AI.
Speaking to AFR Weekend, Comyn emphasised the rapid evolution of AI, particularly highlighting the advancements in reinforcement learning, where AI systems are now demonstrating sophisticated trial-and-error learning capabilities akin to human intelligence.
He noted a clear divergence between companies effectively navigating this transition and those struggling to adapt.
However, Comyn's most significant takeaway underscores a potentially uncomfortable truth for Australia: the AI revolution is not a distant future but a rapidly approaching reality, and the nation may be lagging in its preparedness.
While the initial consumer frenzy surrounding generative AI might have subsided, behind the scenes, a profound transformation is underway within major global enterprises.
"I think there are interesting questions about how and where that evolves, and how well equipped Australia is," Comyn told the AFR, highlighting the "significant disruptive potential over a three-to-five-year timeframe."
He stressed the urgent need for "preparatory and policy work" at economic and regulatory levels.
Yet the potential scale of this disruption extends far beyond mere technological upgrades.
If AI fulfils its promise of augmenting and replacing human workers, fundamental questions surrounding employment, welfare and taxation will demand serious consideration.
Some observers suggest the economic upheaval could dwarf current policy debates, such as the proposals around superannuation taxation.
Microsoft's recent workforce reduction highlights the clear and present danger.
6000 layoffs (2000 were software engineers) serves as a tangible example of AI's immediate impact on the labour market.
Reports indicate that a significant percentage of the code within Microsoft is now being generated by AI itself, suggesting a fundamental reshaping of traditional roles.
This trend appears to be part of a broader shift in the US business community, with some leaders adopting a more demanding stance on workforce productivity, potentially influenced by the capabilities AI could soon offer.
Examples include directives to scrutinise new hires against AI alternatives and stark warnings about the need for exceptional talent in an AI-driven landscape.
While acknowledging the anecdotal nature of some of these observations, the sheer volume of investment pouring into generative AI globally signals an undeniable shift.
Experts like Raphael Arndt, CEO of the Future Fund, point to the potential for AI to address labour shortages, but the underlying narrative from the Seattle summit according to those in attendance, suggests a more profound and potentially disruptive transformation of the employment landscape.
The lessons gleaned by Australian CEOs in the AI hothouse of Seattle serve as a critical wake-up call.
The pace of change is accelerating, and the potential ramifications for the Australian economy and workforce demand urgent attention and proactive planning to navigate the inevitable disruptions ahead.
The discussions in Seattle were not just about technological advancements; they were about the fundamental reshaping of work, the economy, and potentially, society itself.