AI is transforming local economies

Artificial intelligence (AI) is transforming the way Australians work and how businesses operate, with almost half of all workplace tasks now affected by AI. Most occupations are exposed to AI, but the majority face augmentation (enhancement of tasks) rather than full automation. AI adoption is accelerating but uneven across regions, businesses, and community groups, with varying impacts and intensity. Councils can help turn these risks into opportunities by preparing the workforce, supporting local businesses, and building long-term economic competitiveness.

Why this matters for your region

AI is reshaping industries and local economies, and regions that take strategic action will be best positioned to turn this change into growth and opportunity.

Key areas to consider include:

• Sector exposure: Regions with a high concentration of clerical, customer service, and back-office jobs face the greatest risk from AI automation. In contrast, regions with more professional services, healthcare, manufacturing, and education jobs are better positioned to benefit from productivity gains.
• Demographic inequality: AI adoption can widen inequities, as vulnerable groups, particularly women, young people, older workers, First Nations Australians, and people with disabilities, face a greater risk of job disruption from its increasing use.
• Geography and business size: AI-driven productivity growth is uneven across regions and businesses. Metropolitan areas and larger firms are adopting AI fastest and gaining the most benefits, while regional areas and SMEs risk falling behind unless they invest in digital infrastructure, workforce skills, and adoption capacity.

We have created a map that allows you to explore AI exposure by region. This tool serves as a practical starting point for understanding your current position and informing your long-term planning.

What councils can do

Councils can play an important role in turning AI from a risk into an opportunity by preparing their workforce, supporting local businesses, and strengthening the long-term competitiveness of their local economies. Some priority actions include:

• Map your region’s AI exposure: Assess local industries, jobs, and demographics most at risk from AI-driven change.
• Invest in infrastructure: Prioritise connectivity and digital infrastructure to ensure equitable access across urban and regional areas.
• Support workforce resilience: Partner with TAFEs, universities, and local employers to provide training in digital skills, AI literacy, and human-centred capabilities.
• Enable SME adoption: Develop local business support programs, subsidies, or innovation hubs to help SMEs integrate AI responsibly.
• Embed trust and governance: Champion ethical and transparent AI adoption in council operations, modelling responsible use for the community.

How we can help

Our Economic Resilience Report provides councils with clear, evidence-based insights to support decision making and support your economy and businesses.

• Targeted analysis of your region’s economy, including recent performance, key markets, drivers, tourism and exposures.
• Identifying which industries and occupations in your LGA are most vulnerable to most positioned to grow due to growth in AI usage.
• Assess how you can ensure your local strategies connect with national initiatives on AI, digital capability, and skills reform.
• Benchmark against other regions to understand your strengths, weaknesses and gaps.
• Provide practical, evidence-based actionable insights to manage risks and capture opportunities.
• Expert insights & latest data to inform Economic Development Strategy and Investment Attraction Plan.
• Better ability to advocate for opportunities to businesses, stakeholders, the State and Federal Government.

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