Interview: Despite all the AI noise, ChatGPT stalls

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Jennifer Duke: Welcome to the Fear & Greed business interview. I’m Jennifer Duke.

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Jennifer Duke: Despite all the talk around AI and ChatGPT, it seems

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Jennifer Duke: that uptake of the technology might have actually stalled. CPA

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Jennifer Duke: Australia, the country’s leading professional accounting body, has released its

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Jennifer Duke: annual business technology report. They’re looking at the use of

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Jennifer Duke: technology within businesses across the region and there are some

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Jennifer Duke: real concerns over the safe and secure use of AI.

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Jennifer Duke: Gavan Ord is the Senior Manager of Business and Investment

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Jennifer Duke: Policy for CPA Australia. Gavin, welcome back to Fear and Greed.

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Gavan Ord: Thanks, Jen, and thanks for having me back on.

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Jennifer Duke: So were you surprised at all that the uptake of

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Jennifer Duke: AI has stalled in your report?

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Gavan Ord: Well, given the publicity that AI has had, particularly since

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Gavan Ord: ChatGPT was launched in November last year, we are surprised.

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Gavan Ord: The survey showed that 55% of businesses used AI in

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Gavan Ord: the last 12 months. That’s actually the same result as

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Gavan Ord: in 2022. So we would’ve thought, yes, the result would

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Gavan Ord: be higher. But then, when we talk to members, we

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Gavan Ord: find that, yes, individually people are experimenting with ChatGPT, but

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Gavan Ord: some businesses are more cautious about the technology.

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Jennifer Duke: And is that caution behind the stall, do you think? Are there

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Jennifer Duke: some other factors there that are slowing down the uptake?

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Gavan Ord: So I think there’s three things. From a business point

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Gavan Ord: of view, it’s definitely caution about the open source nature

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Gavan Ord: of ChatGPT, that you should not be using it to

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Gavan Ord: put in confidential information. So that’s the primary one, and

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Gavan Ord: businesses are trying to work out how to use it

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Gavan Ord: safely and securely. Two, I think businesses are still working

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Gavan Ord: out what are the right AI tools for their business.

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Gavan Ord: And I think, for businesses, ChatGPT is not necessarily the

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Gavan Ord: right tool. And three, we know that at the micro

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Gavan Ord: end, the very small business end of the market, they

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Gavan Ord: just don’t have the time to consider how to use

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Gavan Ord: AI appropriately.

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Jennifer Duke: And people who are listening might not be aware, but

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Jennifer Duke: we’ve actually worked together before because I used to work

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Jennifer Duke: for CPA. And one of the things that we always

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Jennifer Duke: talked about all the time was digital transformation strategies, getting

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Jennifer Duke: businesses to grasp that digital innovation. So what does a

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Jennifer Duke: transformation strategy look like? Why is it important? And why

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Jennifer Duke: are they less common for small businesses?

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Gavan Ord: So, first of all, digital transformation strategy, we find that

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Gavan Ord: most businesses have one. And we find that businesses that

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Gavan Ord: do have one are actually more likely to be profitable.

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Gavan Ord: So a digital transformation strategy is something which just sets

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Gavan Ord: out how the business is going to move from its

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Gavan Ord: current technology state to a new technology state. So it’s

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Gavan Ord: not necessarily that complicated, but if you are thinking about

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Gavan Ord: how to implement a strategy, you’re not certain, obviously go

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Gavan Ord: and seek advice of a professional. But the main thing is,

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Gavan Ord: it sets out how you’re going to move from where

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Gavan Ord: you are to where you want to be. And as

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Gavan Ord: I said before, those who do it are more likely to be profitable.

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Gavan Ord: At the small scale, going back to your question… And

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Gavan Ord: as you said, we’ve worked a lot on the small

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Gavan Ord: business side of things. For small businesses, they’re just very

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Gavan Ord: time poor. They’re resource poor. They don’t necessarily have all

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Gavan Ord: the knowledge of what’s going on. So many of them

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Gavan Ord: don’t even have a strategic plan, let alone a digital

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Gavan Ord: transformation plan. That doesn’t mean they’re not tech- savvy, it

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Gavan Ord: just means they haven’t got a plan to move from

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Gavan Ord: where they are to where they want to go.

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Jennifer Duke: Gavan, is there a role for government here to help

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Jennifer Duke: smaller businesses get a plan, figure it out, use AI,

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Jennifer Duke: things like that?

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Gavan Ord: I think there’s some role. There’s no need for large

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Gavan Ord: scale government intervention, but there clearly is an issue that

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Gavan Ord: smaller businesses are less tech- savvy overall than larger businesses.

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Gavan Ord: We look at last financial year, the government had a

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Gavan Ord: technology investment boost, that ended. We need policies like that

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Gavan Ord: that encourage tech investment. We also need policies that encourage

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Gavan Ord: businesses to go and seek professional advice, which includes in

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Gavan Ord: the technology space. Because, as I said before, there’s a

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Gavan Ord: strong connection between tech investment, tech strategy, and profitability.

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Jennifer Duke: And part of that probably comes back to having the

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Jennifer Duke: right tech skills. Is there an upskilling piece in this picture?

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Gavan Ord: Look, it’s a really interesting question because we did ask

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Gavan Ord: in the survey around tech talent and the shortage of

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Gavan Ord: tech talent. First of all, I would say it’s not

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Gavan Ord: an Australian specific issue, it’s a global tech talent shortage.

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Gavan Ord: And the overwhelming majority of respondents said they are experiencing

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Gavan Ord: a technology talent shortage. Secondly, and probably positive, is that

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Gavan Ord: that tech shortage is not necessarily meaning businesses are canceling

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Gavan Ord: tech projects. They instead are finding other ways to deliver

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Gavan Ord: tech projects. The survey shows that the most popular way

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Gavan Ord: to overcome this current tech shortage is to try and

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Gavan Ord: upskill their current staff. So in terms of government policy,

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Gavan Ord: yes, there is the current skills boost. That’s one policy

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Gavan Ord: which is trying to encourage businesses to upskill their staff. The

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Gavan Ord: shortcoming in that particular policy is it has to be

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Gavan Ord: training via a TAFE or a university, for example. But a lot

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Gavan Ord: of the tech training is actually run by the tech

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Gavan Ord: vendors themselves, so they don’t necessarily get that boost of

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Gavan Ord: tax deduction.

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Jennifer Duke: Stay with me, Gavan, we’ll be back in a minute.

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Jennifer Duke: I’m talking to Gavan Ord from CPA Australia. So one

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Jennifer Duke: part of this where I feel like the skills shortage

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Jennifer Duke: can’t necessarily be trained up in- house, so you might

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Jennifer Duke: correct me, is when it comes to cybersecurity. And your

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Jennifer Duke: report looked at cybersecurity as well. Is there a continued

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Jennifer Duke: ramping up in the focus on cybersecurity? Are the risks increasing?

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Gavan Ord: The risks are increasing. And I’ll probably give three bits

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Gavan Ord: of advice to small business. First, you are a target

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Gavan Ord: of cyber criminals. Two, you are a target to cyber criminals.

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Gavan Ord: And, three, you are a target of cyber criminals. So

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Gavan Ord: you can’t just assume because you’re small you won’t be

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Gavan Ord: attacked. But what the survey does show is that, yes,

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Gavan Ord: cybersecurity is a major focus for many businesses, which is

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Gavan Ord: good. But, also, cybersecurity is not just about technology. As

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Gavan Ord: you know, Jen, a lot of the cybersecurity problems are people based.

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Gavan Ord: They inadvertently get sucked in by a phishing attack or

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Gavan Ord: some other sort of scam. So developing cybersecurity talent is

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Gavan Ord: not necessarily just about the technology side, it’s also about

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Gavan Ord: all people in your business having that cybersecurity mentality, that

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Gavan Ord: professional skepticism when they get that email requesting them to

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Gavan Ord: change the banking details for an invoice.

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Jennifer Duke: That’s a great point. Do you think there’s a role

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Jennifer Duke: here for cyber insurance as well?

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Gavan Ord: Cyber insurance is one part of it. I wouldn’t necessarily

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Gavan Ord: say it’s the most important part. Just because you have

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Gavan Ord: house insurance doesn’t mean then you don’t lock the front

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Gavan Ord: door. So you still have to invest in your cybersecurity

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Gavan Ord: technology and the people skills around cybersecurity.

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Jennifer Duke: And one of the interesting findings in the report is

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Jennifer Duke: around the tech expectations over the next 12 months. And

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Jennifer Duke: it looks like there’s a decline in the number of

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Jennifer Duke: businesses expecting to implement those major tech initiatives over the

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Jennifer Duke: next year. Why is that?

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Gavan Ord: Yeah, that’s a really good question. And it’s something that we thought about quite a bit ourselves. We tend

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Gavan Ord: to think that COVID brought forward a lot of tech

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Gavan Ord: investments, so we jumped all onto Teams. There was a

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Gavan Ord: lot of tech investment brought forward during the COVID period.

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Gavan Ord: So I think the investment that might be happening in

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Gavan Ord: the next 12 months has actually already happened. Secondly, obviously the economy

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Gavan Ord: is slowing in Australia in particular, and businesses are taking

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Gavan Ord: a little bit more cautious approach. So we are seeing

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Gavan Ord: some of the ABS stats are showing investments are down.

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Gavan Ord: So I think there’s two things. There’s the economy and

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Gavan Ord: that a lot of tech investment was brought forward during COVID.

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Jennifer Duke: And as you well know, businesses are often in this

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Jennifer Duke: situation of weighing up between what they can afford to

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Jennifer Duke: do, what they can’t afford to do, and deciding on

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Jennifer Duke: that spectrum. Where would you put tech innovations in that category?

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Gavan Ord: Look, I think all investment you need to run through

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Gavan Ord: a return on investment lens, regardless of whether it’s tech

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Gavan Ord: or otherwise. Sometimes, that can be hard with some brand

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Gavan Ord: new tech. But things like AI, it’s not brand new. AI’s been around for a long time. So you

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Gavan Ord: can do that return on investment calculation, or at least

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Gavan Ord: provide a very good guess. But what our research shows,

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Gavan Ord: and you mentioned the small business survey we did earlier

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Gavan Ord: when you worked at CPA Australia, it shows that tech

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Gavan Ord: does provide quite a big boost to business performance and

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Gavan Ord: business profitability. So I think it should really be up

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Gavan Ord: there for many businesses. Obviously, it’s a business mode, business

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Gavan Ord: proposition, but, overall, our data shows that tech is something

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Gavan Ord: that businesses should really be focused in on. Because our

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Gavan Ord: data shows it does provide, in many instances, a good

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Gavan Ord: return on investment.

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Jennifer Duke: Gavan, that was fabulous. Thank you very much for talking

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Jennifer Duke: to Fear & Greed.

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Gavan Ord: Thanks for having me on, Jen.

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Jennifer Duke: And that was Gavan Ord, Senior Manager of Business and

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Jennifer Duke: Investment Policy for CPA Australia. This is the Fear & Greed

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Jennifer Duke: daily interview. Join us every morning for the full episode

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Jennifer Duke: of Fear & Greed, Australia’s best business podcast. I’m Jennifer Duke,

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Jennifer Duke: Economics Correspondent for Capital Brief, and filling in for Sean Aylmer.

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Jennifer Duke: Have a great day.