Australia must turn major transitions into Australian industries

Responding to today’s Intergenerational Report 2026, the Australian Academy of Technological Sciences and Engineering (ATSE) said the report’s focus on the AI revolution, energy transition and industrial transformation highlights the scale of change Australia will face over the next 40 years. 

ATSE President Dr Cathy Foley AO PSM FTSE FAA said Australia must build the research, engineering, skills and industrial capabilities needed to capture the opportunities ahead. 

“The question is not whether these transitions will happen, it’s whether Australia has the capability to shape them and capture their benefits here,” Dr Foley said. 

The IGR makes a strong case for Australia to build domestic AI capability, highlighting the importance of access to foundational AI models and computing capacity to support Australian researchers and businesses, attract technical talent and enable AI innovation. The IGR notes that Australia is well-positioned to benefit from the global AI revolution.  

However, as ATSE has put forward, these benefits will not be realised without investment by Australian governments. 

ATSE has been making this case for investment in sovereign AI capability. 

In its 2025 report, Made in Australia: Our AI opportunity, ATSE called for targeted investment in Australian AI infrastructure, data and talent, including a network of AI factories connecting research institutions, industry and high-performance computing. 

“The Intergenerational Report recognises that access to computing capacity and foundational models will shape Australia’s ability to innovate with AI. That is exactly why we need to build our own capability,” Dr Foley said. 

“We should not simply be consumers of AI developed elsewhere. We need the infrastructure, talent, data and research capability to develop and deploy AI in ways that deliver value for Australia.” 

The IGR’s focus on AI builds on the 2023 report, which highlighted technological and digital transformation as a major force shaping Australia’s future. Three years on, ATSE said the opportunity has broadened and so has the need to act.

“The energy transition is not just an emissions challenge, but an opportunity to build new Australian industries around renewable energy, critical minerals and advanced technologies,” Dr Foley said. 

The IGR and Ambitious Australia, the Australian Government’s review of R&D, point to the same challenge: Australia needs to turn its technological strengths into industrial capability and productivity. 

“We have extraordinary scientific and technological capability in Australia. Our national challenge is to connect that capability to national priorities and create the conditions for Australian ideas to become Australian industries,” Dr Foley said. 

“The choices we make now will shape Australia’s prosperity for decades. We need to be ambitious about what Australia can build and persistent enough to build it.”