Canberra, Nov 11: Australia’s innovation shortfall can be addressed through smarter, people-focused adoption of artificial intelligence (AI), according to ARM Hub CEO Professor Cori Stewart. Speaking at the National Innovation Policy Forum in Canberra, Professor Stewart joined government, industry, and research leaders at the National Press Club to discuss the country’s lagging R&D performance and the opportunity AI presents.
Australia currently spends just 1.68 per cent of GDP on R&D, down from 2.25 per cent in 2008 and well below the OECD average of 2.7 per cent. The country ranks 105th out of 135 nations for research commercialisation — a gap experts say could be narrowed through targeted AI adoption in small and medium enterprises (SMEs).
“At this time we have industries starting to understand their troubles, and we have AI that can actually support SMEs as much as global corporations,” Professor Stewart said.
“If we’re smart, we can do it. But if we don’t, there’s no Plan B.”
The SME Advantage
SMEs are uniquely positioned to adopt AI faster than larger organisations due to fewer legacy systems and more agile structures. With rising electricity, wage, and insurance costs compressing margins, AI offers an immediate path to improving productivity and profitability.
The tools are accessible — but the main barrier lies in mindset, not technology.
Back to the Future
Professor Stewart highlighted that AI adoption mirrors the challenges faced during the computerisation of Australian workplaces in the 1980s and 90s, when the key was aligning technology with business needs and retraining staff to adapt.
Research from the period, including the Technology Acceptance Model and the People, Process, Technology framework, showed that user perception and engagement were central to success. Modern studies reveal the same applies to AI: effective adoption depends 70 per cent on people and processes, 20 per cent on technology, and 10 per cent on algorithms, yet most companies still overemphasise the technical side.
People First
“Workers need time to build new skills, so companies need clear retraining pathways,” Professor Stewart said. “When you focus on matching AI to the right business problems and getting your teams ready to use it, adoption becomes straightforward. We can do this. We do do this. We just need to apply what we already know.”
Proof in Practice
Recent examples underscore the model’s success. McKinsey’s State of AI report found high-performing organisations “treat AI as a catalyst to transform their organisations, redesigning workflows and accelerating innovation.”
ARM Hub, one of four federally supported AI Adopt Centres, is demonstrating these results.
Melbourne’s Nexobot has automated logistics operations, while Brisbane’s Microbio uses AI to detect sepsis in under three hours — saving lives worldwide.
“The government has invested $17 million in four AI Adopt Centres,” said Minister for Trade and Assistant Minister for Manufacturing Tim Ayres.
“Businesses who have engaged with these centres are already finding ways to improve the world of work and service provision.”
“We’re not helping companies become AI experts,” Professor Stewart said.
“We’re helping them identify high-impact problems, train their teams and deploy solutions that prove ROI within months.”
Through initiatives such as Data & AI-as-a-Service, Scaleup Manufacturing programs, and Propel-AIR accelerators, ARM Hub is linking research and industry to close Australia’s innovation gap — proving that with the right approach, AI can help the nation reclaim its competitive edge.
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