We are living in the age of disruption and the world has seen nothing like it. Big data, artificial intelligence, machine learning and the explosion in connectivity. It is the fourth industrial revolution. The first came with the use of steam to mechanise industries and the Dickensian conditions it created in English factories in the 1800s.
The second came with the arrival of electricity and the third through the development of the computer and the proliferation of information technology.
This fourth revolution is different in both nature and scope.
It is less about disseminating information to the wider public, as was the case with the invention of the printing press, but more about algorithms and data as new building blocks to fundamentally change the way we do things across every sector of the economy. It extends from energy to education, health and hospitality, mining and manufacturing, and even to administration and agriculture.
The opportunities are boundless, with McKinsey suggesting that automation technologies could add up to $4 trillion to the Australian economy over the next 15 years.
In simple language, machines are providing insights and recognising patterns by rapidly processing data, which allows predictions and, in many cases, decisions to be made.
For example, Qantas has partnered with the University of Sydney’s Centre for Field Robotics to create a new system called “Constellation”, which brings together a database with a decade of weather patterns and combines it with aircraft capability to map out the optimal flight path. Qantas believes that, by sending its aircraft into the strongest jet streams, the system can reduce its fuel bill by $40 million a year and reduce its CO2 emissions substantially.
With greater connectivity and growing networks the so-called Internet of Things is also coming into its own. Business equipment, vehicles, household appliances and wearable devices communicate with each other and generate data.
For example, your mobile device can be used both remotely and automatically to change the temperature settings in your house, such as through the airconditioning system, to respond to the movement in electricity prices through the day. That saves customers money and improves the reliability of the system.
We are now only at the very nascent stage of the Internet of Things and the upward trend in data generated will accelerate.
In Australia, we’re seeing a big transformation in so many areas.
In mining, our companies are world leading with autonomous long-distance trains, haul trucks and drill systems in the Pilbara – all monitored from a control centre located 1500km away in Perth. In transport, disruptive technologies like autonomous vehicles are likely to profoundly reshape mobility within cities – they will fundamentally change the way people get around and will shape how cities grow into the future.
General Motors has said it is committed to an autonomous ridesharing service in several big cities in the United States and is aiming for a future of zero crashes, zero emissions and zero congestion.
In healthcare, with a growing and ageing population, there is upside potential from technology innovation. E-health records can help establish a better evidence base, deliver better quality care, reduce medical errors and streamline administration and overall healthcare efficiency, while magnetic resonance imaging machines are being enhanced by artificial intelligence that helps interpret MRIs.
IN THE financial sector, we are also experiencing a wave of innovation-driven disruption with the emergence of “fintech”, using data and the latest technology to design and offer better and bespoke products and services. Cryptocurrencies, including Bitcoin and the Libra currency being developed by Facebook, are instigated through the development of blockchain technology. These new currencies represent a major change for the financial sector as the proportion of cash transactions made by households continues to fall.
In an increasingly competitive and globalised economy, we need to recognise the unprecedented scope and speed of technological change. It is changing every aspect of how we live and work. This creates plenty of opportunities but also challenges around privacy, cyber security, competition and the future of work.
The question is how we manage the challenges rather than trying to stop technological change.
Our goal as a government and as a community is to achieve the right policies to ensure that, when these technologies become part of everyday life, they contribute to a prosperous, harmonious and secure future for all Australians.
With a clear sense of what is important to us, I am confident we can achieve that goal.
JOSH FRYDENBERG IS THE FEDERAL TREASURER AND RECENTLY DELIVERED THE SIR ZELMAN COWEN ORATION AT VICTORIA UNIVERSITY ON THE AGE OF DISRUPTION