00:00When it comes to the potential transformative nature of AI, of course, we've had conversations, particularly within the financial sector,
00:07with the likes of Jamie Dimon, with the likes of Bill Winters.
00:10Some of the commentary about the job losses arising from AI has been quite fearful, right, for a lot of
00:18young employees in particular.
00:19What's your take on this?
00:23So thank you very much, and yes, what a great week to be taking over as CEO, and Asia Pacific
00:30is where most of the great innovation that the world depends on for AI is being announced and is being
00:38developed and being exported to the rest of the world.
00:42I'm both a realist and an optimist.
00:44First of all, I'm a realist because technology is changing the way work is done.
00:52I'm a little more cautious that we're actually seeing the evidence of job losses.
00:57I know in Deloitte, we are taking on record numbers of graduates, and we're investing more than ever in training
01:05those graduates for work of the future.
01:08But I do know that in the tertiary sector, right across the region, universities are struggling to make the move
01:15to be able to put AI into the core of the way that students approach the workforce.
01:21And in fact, too many students see AI as cheating.
01:25They're taught that AI is something that is used for cheating, and so therefore they come into the workforce already
01:31with a negative perception.
01:32We have to change that.
01:36How do you change that perception?
01:38Because the issue of regulation of guardrails keeping on top of the technology is quite troublesome.
01:47Well, first of all, more than 80% in our surveys of organizations are investing heavily in AI.
01:55And I know, as you said in the lead-in, a lot of people are still struggling to get the
02:00returns.
02:00But the reality is, whether it is in customer service, whether it's in fraud detection, whether it's in coding of
02:09systems, we are seeing those really substantial returns.
02:15And regulators right across Asia-Pacific are watching very closely, are getting on top of.
02:22We've seen waves of technology before that are disruptive to the way people work.
02:27In many cases, we've actually managed the transition reasonably well.
02:33In where I am today in Australia, we had a major car industry, which resulted in the move of a
02:44couple of hundred thousand workers out of the car manufacturing into new jobs.
02:49That actually, with government support, was handled quite well with hindsight, but it was disruptive.
02:56We've got to learn from those experiences of the past and make sure that we make this as smooth as
03:01we possibly can.
03:04It's interesting, the compensation around both reskilling, but also the fact that AI is not going to necessarily eliminate the
03:12need for human traits and human strengths, right?
03:15We have this great story on the Bloomberg today talking about how the rise of AI has made summer internship
03:20season that much more difficult and challenging.
03:23Because so many of these companies are opting for these tasks to be perhaps more efficiently completed by AI.
03:31Does a trend like this really threaten to remove what is core to particularly the sort of employee experience at
03:40those lower levels in order to be able to get to a point where there's more talent at those higher
03:45levels?
03:47Well, this is the reason why we've invested in a physical AI center in Shanghai, a smart factory in Tokyo,
03:54an innovation center in Bangalore, is because the only way you invent, you design the work of the future is
04:01by actually working hands-on with the technology, with seeing how you can get the most effective interface between people
04:09and machine.
04:10You remember decades ago, we used to have typing pools of people who were typing documents and producing them, and
04:18that went away with the word processor, and yet that work continued.
04:23What actually ended up happening was that work got embedded in the day-to-day process.
04:29That's what's happening with AI.
04:31AI is getting embedded in the way that we provide a customer service.
04:36AI is getting embedded in the way a programmer redesigns an activity or an outcome for someone to deliver, and
04:45AI is getting embedded in the supply chain to make it more efficient, but usually in partnership with a person.
04:53So we're going to see a lot of redesign, and perhaps the first generation of jobs, partnering between physical robots,
05:02back office AI, and people, are not going to be the final view of what work will look like.
05:10And it's going to be a really fascinating journey over the next few years as we make this transition.
05:18As you say, so many uncertainties, but what we are starting to see in the economic data is the impact
05:23of AI adoption, particularly across small and medium-sized enterprises, right?
05:27There was also a recent report suggesting that Australia is perhaps underprepared when it comes to the seismic shifts to
05:33the labour market as a result of artificial intelligence.
05:36Is that something that you see, and how does Australia perhaps compare to the rest of the region?
05:42So what we have seen is the countries in Asia-Pacific that have the highest labour density, that provide the
05:50most services through labour, have tended to have the highest first uptake of AI.
05:58But actually, we can be incredibly optimistic because AI experimentation is up over 80% right across the region, including
06:10in Australia.
06:11Certainly, those parts of the region that have the highest density of robotics and manufacture, for example, have been faster
06:19to adopt physical AI and to be experimenting with that technology and realising early returns.
06:27So in Australia, most of the AI work has been particularly around back-office processes and enabling people to get
06:35access to information more quickly.
06:37The thing we've got to watch, and you're going to see a number of announcements this week in Computex and
06:44other places, is that physical AI is bringing a new dimension to the technology.
06:51It's bringing it on board.
06:52It's bringing it to the edge.
06:54That actually ultimately gives us ways of reducing down the computational cost of providing services with this technology, and that's
07:03really important for the future.
07:05So I'm less worried about whether or not any individual economy is at the leading edge of experimenting with the
07:13technology exactly as it is.
07:15I'm really worried about whether they're looking over the horizon, or are they experimenting with the next generation of technology?
07:22And that's certainly, as CEO of Deloitte Asia-Pacific, that's my focus.
07:26We are the powerhouse in this region, and I want to make sure that we are investing in educational experiences
07:33for our clients and for our people to experiment with these technologies early and find the ways to embed them
07:40very, very quickly in practical examples within their businesses.
07:47In your data, are you finding that the promised productivity gains, and I talk about Australia, but really it's a
07:54broad question, are they being seen yet?
07:58So productivity is real.
08:01We know that, first of all, we're seeing in any job that requires access to data, we're very quickly getting
08:09between 20% and 30% productivity for the individual.
08:13But the reason why that's quite hard to track is that, as with anything that is new that we haven't
08:19standardised the way that people work, what's happening is the difference between the most effective and the least effective worker
08:28using the technology is actually as much as 10 to 1.
08:32So that means it's really important that we look at the edges, we look at the people who are most
08:37effective at using the technology and help to spread their way of working to a larger group within the organisation.
08:45So certainly, a lot of the time, the reason why it's not as visible is that we're finding that AI
08:53is being used very heavily by people to enable them to, if they're serving a customer, to be able to
08:58get the right document, the right procedure in front of them and quickly guide the customer through the task.
09:05If it's in fraud or if it's in provision of service, again, it's making the processes behind the scenes yet
09:15more robust and our clients are reporting significant improvement in the quality of those processes that they're delivering.
09:25We're also seeing that that's not resulting in them taking workforce out in those areas.
09:31In fact, what it's allowing them to do is to be able to tap into customers that they may not
09:36have been able to address profitably previously or intercede where things might otherwise have gone wrong.
09:44And so often, when things don't go wrong, you don't know about it, you don't observe it, and these numbers
09:49will only come out over a period of time.
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