This report looks at how generative artificial intelligence (Gen AI) is starting to transform work, skills and the Australian labour market. The Generative AI Capacity Study provides the first whole-of-labour-market view of Gen AI’s potential, impact to date, and what’s needed to support Australia's digital and AI transition.

The potential for a broad range of applications of Gen AI presents both opportunities and challenges. While AI offers the promise of improved productivity and innovation, it also brings risks from disruption and the need to develop skills at pace. The overall impact of Gen AI on the labour market will be subject to a range of dynamics. This complexity has the following implications for policy:

• the impact of Gen AI depends on how and where it is used
• labour market outcomes will also depend on the extent and treatment of productivity impacts
• Australia’s path is not set and there are many potential paths.

Key findings

• Gen AI is more likely to augment jobs than replace them.
• AI adoption is early and varies across industries, with many workers using tools independently in their work.
• The impact of AI will vary across occupations, industries, regions and groups of people.
• Ensuring that Australia has the right skills will be essential.

A compendium of five analysis papers provides the more detailed analytical findings that were summarised in this report.