Jarrod McGrath | To create change, we need to stem Australia's productivity slide

The Productivity Commission's long-awaited five-year report found Australia is the most unproductive it's been in 60 years, with productivity falling to just 1.1 per cent growth each year.

This comes despite record and accelerated investment in cloud technology, digital tools, and even artificial intelligence (AI), all designed to make peoples' jobs easier and to allow them to work flexibly across locations.

The report found less than two per cent of Australian businesses are engaging with new innovations, and internet of things (IoT), AI, robotic automation and big data analytics remain wildly underutilised.

Here we arrive at the disconnect between Australia's leaders and workers: you can lead people to technology, but you can't make them drink.

This gap can be attributed to a few causes. Technology is constantly evolving, with new solutions and providers emerging each day. This means organisations scramble to keep up with the latest developments, and workforces are left navigating cluttered systems against the blaring noise of knowledge workers talking over the top of each other.

During the pandemic, managers were using an average of nine different applications every day to get their jobs done, leading to overload, burnout and poor experiences. It's no wonder one in five Australians recently said they'd only use new technologies in the workplace if they were "forced". Clearly, the mesh between people, processes, and technology is broken.

Many organisations also lack the necessary skills and expertise to effectively implement digital transformation. This is particularly true in the context of the widespread skills shortages that permeate the technology sector and show no signs of abating. The private sector, in fact, is losing $9 million these shortages every day.

We desperately need a solution if we want to reverse the productivity slump and build a more prosperous, people-centred Australia.

As Albert Schweitzer famously said, "Example is not the main thing in influencing others. It is the only thing". To create change across sectors, leaders from all levels of government need to step up and model what true digital transformation looks like.

This should go beyond a simple transition, where the same people and processes are simply shifted to a new technology. Organisations should embrace a true transformation, where workflows are redesigned in line with people's real concerns and ambitions.

Government is the country's largest buyer of ICT services, which means it's well-positioned to develop frameworks businesses can use to progress and remain competitive.

Good, if not perfect, examples already exist. The essential eight list of cyber security requirements was developed as a baseline guide to help organisations mitigate cyber attacks, and is used by government agencies and in turn other organisations as a map for cyber protection.

But frameworks need to be practical, repeatable, and clearly define the ways in which organisations can achieve measurable outcomes. The mandated reforms of the aged care royal commission, for instance, outline the agreed minimum of nursing hours per patient per day, leaving no room for guesswork.

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That lack of direction, as well as the digital skills disconnect, is a widespread barrier to digital adoption. Research found 24 per cent of Australia's workforce are not digital workers, and another 36 per cent have only a basic set of digital skills. Another report found more than three quarters of government leaders said their organisation's culture needs to change to achieve the full benefits of digital transformation. We're all operating in different leagues without a set of rules (frameworks) to abide by.

It's imperative the government makes inroads towards developing digital muscle, by building a culture in which people can intuitively adopt and embrace new technologies as they become available.

This could start with providing funding for educational institutions to develop courses and training programs focused on these areas. Businesses can do their part by partnering with learning academies or institutes, and by nurturing digital know-how across departments in their organisation, and not always with a view to steering that education to a new digital tool they have to get across.

Crucially, frameworks guiding technology adoption need to centre on people. It's no good rolling out tech that doesn't address the real needs felt by diverse kinds of workers each day. People at all levels need tangible input into these decisions.

Across history, some of the most important projects have been handed to 'skunkworks' groups of subject matter experts, who research and develop ideas away from the eyes of leadership and confines of bureaucracy. Without these autonomous groups, we wouldn't have Google, the human genome, the Apple Macintosh or the computer that navigated the Apollo program.

Closer to home, Sydney aged care organisation Montefiore is having its frontline drive its digital transformation, with a long-term nursing manager overseeing a workplace management system which reallocates shifts, automates rostering and provides a better staff experience.

It's also important to allay the natural fears people have about these technologies, particularly AI, and make clear their benefits and opportunities. The AI Ethics Framework is an example of this in action, providing valuable guidance on the ethical use of artificial intelligence, ensuring it's developed and deployed in a way that is transparent, accountable, and respectful of human rights.

Digital transformation is essential for Australia to remain competitive and relevant in today's environment. However, we're witnessing a gridlock caused by a saturation of technology providers combined with confusion over what will drive value and positive transformation.

As the Australian government digests the Productivity Commission's report, it has the opportunity to lead by example, develop practical and red tape-free frameworks, incentivise results-driven consultancy assistance, and ensure organisations and their people are equipped to thrive in a digital economy.