Dr Miah Hammond-Errey is joined by The Hon. Dr Andrew Leigh, Assistant Minister for Competition, Charities and Treasury and the Assistant Minister for Employment, to discuss artificial intelligence (AI) in the context of competition, the initial months of the Australian Centre for Evaluation and coordinating with overseas regulators on the complexities of AI. They also discuss Australia’s technology workforce challenges, charting a uniquely Australian approach to building industrial capacity and the ongoing, global geopolitical technology competition.
Dr Andrew Leigh is the Assistant Minister for Competition, Charities and Treasury and the Assistant Minister for Employment. He is the member for Fenner and has been in government for more than a decade, holding various Shadow Ministry positions, and was the Parliamentary Secretary to the Prime Minister in 2013. He previously worked as a lawyer and a Professor of Economics at ANU. He holds a PhD from Harvard in Public Policy and has written numerous books on inequality, economics, randomisation and innovation. His long-running podcast, The Good Life is focused on ethics, health and happiness.
Technology and Security is hosted by Dr Miah Hammond-Errey, the inaugural director of the Emerging Technology program at the United States Studies Centre, based at the University of Sydney.
Resources mentioned in the recording:
- (Dr Andrew Leigh’s podcast) The Good Life
- (Dr Andrew Leigh, Address to the McKell Institute, Sydney) Competition and Artificial Intelligence
- (Ethan Mollick et al.) Navigating the Jagged Technological Frontier: Field Experimental Evidence of the Effects of AI on Knowledge Worker Productivity and Quality
- (Dr Miah Hammond-Errey) Big Data, Emerging Technologies and Intelligence: National Security Disrupted
- (Prime Minister and Treasurer, Treasury) Working Future: The Australian Government’s White Paper on Jobs and Opportunities
- (Claudia Goldin and Larry Katz) The Race Between Education and Technology
- (Dr Miah Hammond-Errey, Lowy Institute) AI will shape our world – even our brains – but it can be regulated
- (Digital platform services inquiry 2020-25, Australian Competition and Consumer Commission) September 2023 interim report
- (OECD) R&D spending
- (Education Endowment Foundation) Taking Part in an EEF Project
- (The Laura and John Arnold Foundation) Arnold Foundation Announces Expanded Funding for Low-Cost Randomized Controlled Trials to Drive Effective Social Spending
- (World Bank) Independent Evaluation Group
- (USAID) Evaluation evaluation outfits
- (Julian H. Elliott et al.) Living Systematic Reviews: An Emerging Opportunity to Narrow the Evidence-Practice Gap
- (Global Commission on Evidence to Address Societal Challenges) Global Evidence Commission Report
- (Gabrielle Zevin) Tomorrow, and Tomorrow, and Tomorrow
- (Shehan Karunatilaka) The Seven Moons of Maali Almeida
- (Henry A. Kissinger, Eric Schmidt and Daniel Huttenlocher) The Age of AI: And Our Human Future
Making great content requires fabulous teams. Thanks to the great talents of the following.
- Research support and editorial assistance: Tom Barrett
- Production: Elliott Brennan
- Podcast design: Susan Beale
- Music: Dr. Paul Mac
This podcast was recorded on the lands of the Ngunnawal people, and we pay our respects to their Elders past, present and emerging — here and wherever you’re listening. We acknowledge their continuing connection to land, sea and community, and extend that respect to all Aboriginal and Torres Strait Islander people.
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Dr Miah Hammond-Errey: [00:00:02] Welcome to Technology and Security. TS is a podcast exploring the intersections of emerging technologies and national security. I'm your host, Dr. Miah Hammond-Errey. I'm the inaugural director of the Emerging Technology Program at the United States Studies Centre, and we're based in the University of Sydney. My guest today is the honourable Dr. Andrew Leigh. Thanks for taking time out of your busy schedule to join me, Andrew.
The Hon Dr Andrew Leigh MP: [00:00:25] Real pleasure. Miah.
Dr Miah Hammond-Errey: [00:00:27] Dr. Andrew Leigh is the Assistant Minister for Competition, Charities and Treasury and the Assistant Minister for Employment. Andrew is the member for Fenner and has been in government for more than a decade, holding various shadow ministry positions, and was the Parliamentary Secretary to the Prime Minister in 2013. He previously worked as a lawyer and a professor of economics at ANU. He holds a PhD from Harvard in Public Policy and has written numerous books on inequality, economics, randomisation, and innovation. His long-running podcast, 'The Good Life' is focused on ethics, health and happiness. We're so happy to have you join the podcast.
The Hon Dr Andrew Leigh MP: [00:01:00] Thanks, Miah. Great to be with you.
Dr Miah Hammond-Errey: [00:01:03] We're coming to you today from the lands of the Ngunnawal people. We pay our respects to their elders, past, present and emerging, both here and wherever you're listening. We acknowledge their continuing connection to land, sea and community and extend that respect to all Aboriginal and Torres Strait Islander people.
Dr Miah Hammond-Errey: [00:01:20] Let's go straight to the topic of 2023, artificial intelligence. You gave a recent speech on AI and competition, and it's a great place to start our conversation. We'll throw a link in the show notes. You started the speech by outlining the remarkable reach and rise of consumer AI. We often talk about the exponential speed of the uptake of new technologies, and one way to look at this is how quickly have they reached 100 million users? As you outlined, it took the telephone 75 years, the mobile phone 16 years, the web seven, Facebook four, and Instagram three years. It took ChatGPT just two months. That speed of adoption is breathtaking. What else is most remarkable to you about the rise and reach of AI?
The Hon Dr Andrew Leigh MP: [00:02:06] The way in which can just be used by anyone, I think Miah. So if you think about other general purpose technologies, technological innovations that have really transformed economies, then they've needed managers to take over and show people how to use it. Think about the steam engine, which revolutionised travel through the advent of the railways. But that took decades. Electrification, which changed factories, but only after factory owners rejigged the structure of the workflow. But generative AI, put it in front of the typical office worker, and immediately they can figure out how to be more productive.
The Hon Dr Andrew Leigh MP: [00:02:43] Just a couple of weeks ago, Ethan Mollick and co-authors released a study based on giving consultants access to ChatGPT to do stylised consulting problems. The assessment of the work that those consultants did found that they were not only quicker, but also produced better solutions. They're doing problems like trying to think up different marketing strategies, or design a media release or write an inspirational memo. And these real-life consultants, it's a study which was undertaken by seven per cent of all BCG worldwide staff found that ChatGPT had a marked impact on improving their productivity. The productivity distributions of the non-users and the users of ChatGPT barely even overlap. So you can see immediately how pretty much every office worker can become more productive.
Dr Miah Hammond-Errey: [00:03:37] Thank you. And that's such a positive start to the conversation. To situate our listeners a little, though, you have outlined five big challenges that AI poses specifically for competition. These are expensive chips, private data, network effects, immobile talent, and open-first, closed-later approaches. Can you briefly explain what each of these are, and then we'll dive into them in a bit more detail?
The Hon Dr Andrew Leigh MP: [00:04:01] Yeah. So these are the ways in which I worry that we might see some consolidation within the AI market, which is similar to what we've seen in the search market. Cast your mind back to the late 1990s. There's a dozen or more search engines. Now there's basically just one. So the challenge is if this technology, which could really ripple through just about every workplace in Australia, consolidates, then that could leave Australians facing a monopoly provider.
The Hon Dr Andrew Leigh MP: [00:04:29] Costly chips, Nvidia has been working carefully with a range of AI companies in order to have quite a stranglehold on that market for initially they were designing chips for gaming, but now they've they've become relevant for AI.
The Hon Dr Andrew Leigh MP: [00:04:48] The training data is increasingly being locked off. We see Reddit and X constraining access to training data, and I suspect we'll see that in other sources of data as well. And particularly if you want your model to be up to date, then you'll need access to the latest data
The Hon Dr Andrew Leigh MP: [00:05:06] Network effects. Well, these models are learning from their users. Just as a search engine learns from you every time you Google something. So the market leader may well accelerate away from its peers if it's got more users because those users will teach it to operate better.
The Hon Dr Andrew Leigh MP: [00:05:22] The risk in this industry, as in many others, is the rise of non-compete clauses that make it hard for a new entrant to hire good staff. And those those clauses are a concern to the government, one of the things that our competition taskforce is looking at. And then there's this prospect of an open-first, close-later model, which is challenging for competition regulators, Miah. If open is legal and pay per view is legal, then it's tricky to work out at what point a competition regulator might challenge a company which invites lots of users to join up on a free model, and then flicks the switch and says, all right, now start paying us.
Dr Miah Hammond-Errey: [00:06:03] Thank you for that overview. I want to dive into some of those. As you know, my forthcoming book and much of my research has been focused on big data specifically and the way it fuels emerging technologies. So I'm really pleased to see the significance of data recognised publicly and get a place in your list. As you said, access to training data is essential to AI. How do you see data and private data specifically playing a role in developing competitive models and their associated products and services?
The Hon Dr Andrew Leigh MP: [00:06:32] I think it's clear that these training data are absolutely essential, and we know from studies that have looked at bias that the when you have a subset of all of the available data, then you can get systems which end up having biases built into them. We know, for example, that too much medical research has been done on white men. And non-anglo women have tended to have different health patterns which don't show up in those data. Likewise, we need generative AI to be trained on data that is truly representative, but the bigger the data, the better the models will be, the more conclusions they'll be able to draw. I gave the example in a speech about my colleague Julian Hill, inviting us all to a dinner to discuss artificial intelligence, so of course I responded with a limerick generated by ChatGPT in a matter of seconds. But we use it in travel. If we're planning planning trips, it's excellent on putting things together. These models are advancing in leaps and bounds and accelerating away from us in a whole range of specific domains, although not yet in the general domain.
Dr Miah Hammond-Errey: [00:07:41] Can you outline the data advantage or competitive tensions arising from the cost of updating these huge models?
The Hon Dr Andrew Leigh MP: [00:07:48] Yeah, so data is pricey. At the moment these models are generally losing money, but the more that the AI models are trained, it doesn't just improve their baseline data, it also improves the quality of the algorithm. So these large language models and the the networks that underpin them are able to to do a better job as they're training on more data.
Dr Miah Hammond-Errey: [00:08:13] And from a geopolitical perspective, what do you see as some of the challenges for out-of-date AI? Or put differently, at what point does AI pass its best-before date?
The Hon Dr Andrew Leigh MP: [00:08:23] Yeah, so everyone's going to want an AI which is using current data. An ideal AI will be one that knows what's happened in the news yesterday, and that's going to be extraordinarily expensive to be porting all of that information constantly into the system. You can also see geopolitically the growth of models outside the UK and the US. Those models don't at the moment seem to be at the cutting edge, but the amount of resources that are being thrown at this, particularly in China, but also in Europe, Canada and elsewhere, are quite substantial.
Dr Miah Hammond-Errey: [00:08:58] I want to move on to network effects. Often digital platforms that have near monopolies are most useful or the easiest to access for consumers. And I'm thinking here of the way we're drawn to social platforms most of our friends, family or colleagues are using. Or the way Uber moved into the transportation market or the way Google dominates search. Can you explain the tensions between network effects of technology platforms and competition?
The Hon Dr Andrew Leigh MP: [00:09:23] So ideally you want to be on a social network where your friends are. It's not much much use using a ride sharing app which has no cars to deliver. So we would expect some degree of network effects to be beneficial to the population. The challenge comes when those network effects also then drive towards monopolisation of a market and allow the standard downsides of monopolies, the charging higher prices, producing lower quality products. So it's an issue we need to be careful of here. Not because I want to be using the same AI engine as you. We're not directly interacting in the way in which we are on Facebook. But your use of the AI is likely to improve the AI for me. So therefore we may well get network effects that drive over time towards everyone using the same AI.
Dr Miah Hammond-Errey: [00:10:18] And do you see the consolidation of digital technologies as being different from the competition challenges in other sectors?
The Hon Dr Andrew Leigh MP: [00:10:24] Only in the extent that these are platform technologies, which are potentially gateways to large chunks of the economy. So in the same way as we worry more about a lack of competition in transport markets or in financial services, because those markets are ways in which other companies get access to their customers and their suppliers and sources of finance. So too, we should worry more about consolidation in a sector which is itself critical for the economy. When I discuss artificial intelligence with retailers, with financial services institutions, with law firms, they're enthusiastic about the productivity potential. Their only concern, really, is how to make sure they're able to use the technology without compromising privacy and confidentiality and security. But the tie up between Microsoft and OpenAI, the way in which Microsoft is making AI engines available through its platforms, is going to overcome that privacy concern for a wide range of users. And I think as that hurdle is overcome, it's going to become more and more broadly used across public and private sectors.
Dr Miah Hammond-Errey: [00:11:40] I want to move on to talent and tech workforce. At a recent Quad Technology Network dialogue, I presented on the opportunities and challenges of tech workforces and the need for more diverse pipelines, as well as educational and vocational pathways. Often the focus is on PhD researchers, which of course, you and I will agree is vital. But I'd also be really interested to hear your thoughts about opportunities for the broader workforce across the AI ecosystem, from data centres to telco infrastructure to computer science to prompt engineers.
The Hon Dr Andrew Leigh MP: [00:12:10] Yeah, I think Miah the work you're doing, in order to ensure we have a more diverse tech workforce, is absolutely critical. It's difficult to imagine that AI engines that are designed by a group of privileged white blokes are really going to work for the community broadly, and tech recognises that they have a diversity, it has a diversity challenge and is endeavouring to to work on that pipeline. The challenge is the pipeline is is long, and so you're left hiring computer scientists that are coming out of universities. The challenge of talent being locked up that I flagged up at the McKell Institute speech was around these non-compete clauses, which are clauses that constrain the industries in which someone can work, and the geographic regions in which they can work after they leave a current employer. Nearly a quarter of Australian workers have non-compete clauses in their employment services agreements, largely because people don't negotiate over what happens after they leave when they're entering a new employer. It's a bit like haggling over the prenup when you're about to tie the knot at the altar. People tend to be focused on what they get within a job, rather than what constraints would be upon them if they were to leave the job. And this is not only a challenge for workers, but Miah, I think a huge challenge for start up industries. If you're starting up, the one thing you need to do is hire talent. The challenge of non-compete clauses is they make it tougher for you to hire talent and therefore effectively attacks on start ups.
Dr Miah Hammond-Errey: [00:13:42] And back to kind of the broader technology focus for a second. How do you see Australia as placed for accessing technology and specifically AI workforces across the pipeline?
The Hon Dr Andrew Leigh MP: [00:13:51] I think we do very well in terms of lifestyle and in terms of this being an attractive place to think broadly, in an environment in which there is enthusiasm from the government and from the private sector. Naturally, we're we're not Silicon Valley, we're not route 128. So we need to figure out what are the niches in which we can operate. Australia has had technological niches around mining, around food, around dry land, dry land farming. So. Building on some of those technological niches will be important.
The Hon Dr Andrew Leigh MP: [00:14:26] We don't currently have significant enterprises working on the the generative AI engines themselves, but a huge number of Australian firms are looking at applications. And if you look in the mining and financial services sectors, then you've got Australian firms that are doing as well as any in the world in terms of the applications of AI to making firms more productive. I should also say that AI isn't all downside for competition. So you think about the immigrant landscape landscape architect who'd like to break into a market but has English as a second language, so hesitates before sending off a tender that might not be in perfect English. Well, now they can plug it into ChatGPT, get the grammar and syntax corrected, and stand a better chance of challenging an incumbent. That's healthy for competition.
Dr Miah Hammond-Errey: [00:15:20] In September, the Prime Minister and Treasurer released the government's White Paper on Jobs and Opportunities, which highlighted digital and advanced technologies as one of the five key factors impacting Australia's labour market in the coming decade. The White Paper notes that digital and technology jobs will grow by 21% by 2033. Can you outline some of the plans to equip Australians and improve targeted migration to meet these gaps?
The Hon Dr Andrew Leigh MP: [00:15:43] We've got to make sure that we're providing the educational opportunities that people need. Part of that is about just providing more university places. One of my favourite books over recent years is Claudia Goldin and Larry Katz The Race Between Education and Technology, which simply posits that inequality is a function of how rapidly education advances and how rapidly technology advances. If education keeps pace with technology, you don't see a widening of the gap between rich and poor. If [technology] advances while education stagnates, then people miss out. So we need more university places, more opportunities in computer science, and then also the opportunities for entrepreneurs to be able to come into the country and create more jobs. The genius of Australia's migration system is that it traditionally has not placed adverse pressure on the labour market. Indeed, we've been bringing in migrants who are filling skills gaps and potentially creating opportunities to employ more locals, and we need to continue to do that in this area.
Dr Miah Hammond-Errey: [00:16:42] There's a concept we've been talking a lot about with some of our visitors, which is called the aspirational job ad concept, and this is how in the technology sector particularly, many of the roles are advertised with, a junior role would be advertised seeking programming languages, multiple educational qualifications, years of experience and some of the research coming out of the US has also shown it's very difficult to actually get a sense of what skills end up being hired versus what are actually advertised for, and that's quite a specific challenge in cyber security and AI.
The Hon Dr Andrew Leigh MP: [00:17:13] Absolutely. And presumably we should also be concerned if there are differential tendencies of applicants to apply for jobs where the person doesn't have all of the required skills. So the standard story you often hear about non-white applicants and women is that they tend to say, well, if I haven't met all the requirements, then I won't apply. Over-egoed blokes can tend to say, well, I've got half of it, so I'm putting putting in my CV and that again could drive us to an outcome where we get less diversity in the market than we want.
Dr Miah Hammond-Errey: [00:17:44] I want to move to AI and regulation. Public Service Minister Katy Gallagher and Science Minister Ed Husic recently announced a six-month multi-agency AI taskforce, which will look at the risks and benefits of the use of different AI systems within the Australian Public Service, while giving some direction on the safest and most responsible use. Where are the concerns over AI most acute in the public service?
The Hon Dr Andrew Leigh MP: [00:18:07] One word, robodebt. We just had the robodebt royal commission. We've seen the lives that were ruined by the application of computers taking the human out of human services, so we need to be super careful that at any time that we're looking to employ AI, that we've got safeguards within the loop, that we're not unleashing AI in ways that could be adverse, particularly adverse for the most vulnerable. But there's a whole lot of contexts in which the work of public servants could be refined and improved. If we're trying to anticipate where someone's going to fall into strife, then using AI in order to get better predictions of problems that are arising are important. In a disaster context using neural networks in order to deliver emergency services in the places that they're needed most will be absolutely critical. So there's a whole host of applications where artificial intelligence can help the public sector do a better job.
Dr Miah Hammond-Errey: [00:19:10] Thank you. Discussion of AI regulation is varied, not just across different jurisdictions, but also in the many policy options being proposed. In fact, there seems to be no shortage of ideas, as I wrote for Lowy [Institute] recently, it's about bringing them together and supporting policy makers. Where do you see the biggest challenges when thinking about regulating such consequential technologies?
The Hon Dr Andrew Leigh MP: [00:19:32] We need to be thinking about how the industry is going to shift. And so right now, this is really a nascent technology. You think back a few years ago, generative AI wasn't anywhere near the scale it is now. Fast forward and these technologies are going to be quite different. We also don't know very much about how the supply market is going to change. So any regulatory approach needs to be sufficiently flexible to allow for the fact that we really are, you know, close to the 1776 point, to use a steam engine analogy, rather than being an environment in which the technology is more settled.
Dr Miah Hammond-Errey: [00:20:13] You have noted that the role of Australian competition and technology agencies will be somewhat different from regulators in countries where the main AI engines are being developed. Can you unpack that a little bit more for me?
The Hon Dr Andrew Leigh MP: [00:20:24] Yeah. So there's just a limit to what the competition regulator in a country which has about a third of one per cent of the world's population can do when you're talking about global technologies. I'm not sure what it means for the Australian competition regulator to block a merger, which is being conducted in the United States between two US firms that, yes, have an Australian footprint but aren't largely Australian located. So in that context, we need to be working collaboratively with other competition regulators. You notice I didn't say competition regulators should collude, but certainly they should be engaging with one another over these these significant challenges. And one of the things I've sought to do since I've had the competition portfolio is to engage with counterparts, in the UK, CMA, and the European Competition Regulator and the US Federal Trade Commission. Those regulators are all thinking about these these sorts of issues and alive to the challenges that are posed by generative AI, which are in some sense most acute in countries where the engines themselves are being developed.
Dr Miah Hammond-Errey: [00:21:36] This kind of aligns with many of the other global challenges that we are facing, like climate change, where international cooperation is essential and yet incredibly difficult to marshal.
Dr Miah Hammond-Errey: [00:21:49] I want to go to a segment on alliances. Technologies impact all nations and effective governments need to collaborate with industry and academia and fellow global regulators to solve complex policy problems. What is the role of alliance building in technology policy?
The Hon Dr Andrew Leigh MP: [00:22:04] We need to be collaborating with our allies in terms of sharing where we can and engaging both in terms of regulation, but also ensuring that Australia is well represented in these technologies. To the extent that we have a different industrial structure, a different racial and ethnic mix, we need to ensure that those principles are available. We're also acutely aware, and Clare O'Neil is leading a lot of this work, of the potential for AI to be used for disinformation and to undermine democracy. Right now, if you're engaging in disinformation, you tend to put out single pieces of disinformation, which you hope will appeal to subsets of the population. The possibility of micro-targeted disinformation is pretty terrifying and occurring already in the area of voice scams, where a tenth of Australians say they've been targeted by an AI voice scam, typically a scammer that has taken a snippet of a grandchild or a child's audio off the internet, and is then using that to persuade the parent or grandparent that that child is in trouble and needs money sent to them quickly.
Dr Miah Hammond-Errey: [00:23:17] Yeah, it's a serious concern. And from my own research on micro-targeting and disinformation, automated disinformation and micro-targeting already exists. It's not a future problem.
The Hon Dr Andrew Leigh MP: [00:23:28] Exactly, yes.
Dr Miah Hammond-Errey: [00:23:30] On to competition and innovation. Since we last spoke, Australia's ACCC Digital Platform Services inquiry has continued and they've recently submitted their [latest] report to the Treasurer, due for release shortly. It will focus on the expansion strategies of digital platform providers and competition concerns. Can you give us an update on where the inquiry is at?
The Hon Dr Andrew Leigh MP: [00:23:50] So we're actively considering those reports. Stephen Jones, the Assistant Treasurer, is leading that work. And that's certainly going to be driven by our baseline principle that just because you're a new technology doesn't mean you can take an end run around our competition laws. Platform-specific regulation, as proposed by the ACCC, has an analogy in the national security space, where entities can be designated as a national security challenge once they reach a certain size. That's a proposal we're actively considering. And then there's sort of more broader suggestions Miah, things like a ban on unfair trading practices, which exist in other jurisdictions and could potentially make a difference here.
Dr Miah Hammond-Errey: [00:24:35] What are the challenges for government to harness innovation that comes from industry and academia?
The Hon Dr Andrew Leigh MP: [00:24:40] We haven't done very well in linking industry and academia in Australia. If you look at the OECD, R&D spending by government is about OECD average. But R&D spending by industry is below average, and particularly industry academia collaborations are weak. I, just anecdotally, if you walk around the streets around MIT or Stanford, you see a range of spin-off businesses. If you walk around the streets around Melbourne University or Adelaide University, you see some great hotels and cafes. So somehow we're not doing as well in the kind of co-location and synergy there. One of the ideas that Kim Carr proposed when he was shadow industry minister was a premium on the R&D tax credit for collaboration with universities. We don't want every firm working with a university. We don't want every university researcher feeling they need to commercialise. But we're clearly missing opportunities as a country in this space.
Dr Miah Hammond-Errey: [00:25:36] How does government balance open innovation and the need for security, particularly in the context of delivering government services?
The Hon Dr Andrew Leigh MP: [00:25:44] We need to preserve user privacy, and the Data Act provides a framework for doing that, of using data in an anonymized fashion, in order to glean insights right across the population. We need to ensure that government data is carefully preserved. In some cases, this will be about increasing the height of the walls. In other cases, it will be about decreasing the value of the treasure. So the tokenization of credit card numbers, for example, has largely removed the phenomenon of credit card theft. Your listeners will remember that credit cards used to be recalled much more often a decade ago than they are now. Largely, that's because of tokenization, and some researchers, such as Danny Gilligan at Reinventure, have proposed that we ought to have a tokenization model for better protecting the privacy of user data. In other words, if you break in, you would then get to see a series of transactions linked only to a unique ID, or else if you broke it, you would need to break into a different database in order to see the cross map between Miah's name and the number 79846439.
Dr Miah Hammond-Errey: [00:27:00] It's a problem that we have to confront, though. I mean, we can't just leave it.
The Hon Dr Andrew Leigh MP: [00:27:04] Absolutely.
Dr Miah Hammond-Errey: [00:27:06] Do you see, there is a tension between a focus on rebuilding industrial capacity and picking winners in specific sectors, with efforts across government to provide more accountability and evaluation of government projects and spending.
The Hon Dr Andrew Leigh MP: [00:27:18] Absolutely. Economists have been traditionally sceptical of industry policy because of examples in which government hasn't picked winners. Unsuccessful industries that are unable to raise capital in the private market have instead gone to government with superficially attractive pitches that end up being a good deal for the for the shareholders, but not such a good deal for the taxpayers. So we need to be cautious when it comes to industrial policy, but also open to the notion that there might be market failures. That's true particularly in the area of climate change where [the] government's support for renewables industries has been appropriate and has been a significant part of how Australia is going to be moving to transform our electricity grid and the economy more broadly as we decouple economic growth from carbon emissions.
Dr Miah Hammond-Errey: [00:28:11] You've raised an interesting point there, and there has been a global shift in industrial policy from semiconductors to green technology and more domestic manufacturing. How will Australia approach this when compared to other nations?
The Hon Dr Andrew Leigh MP: [00:28:24] We'll be strategic and focused. We understand that the government budget is constrained, and we've just brought down the first surplus in 15 years, but there's still a significant mountain of debt to be paid back and an environment in which there's a lot of pressures on the government budget. So as we invest, it needs to be targeted and strategic, focused on not only what are the opportunities for Australia, but also thinking about what other countries are doing as well. So I'm aware of the concerns that a range of economists have raised about the US Inflation Reduction Act and the pressure that that places on industries around the world. Even if an Inflation Reduction Act approach is right for the United States, a country of 26 million doesn't necessarily want to automatically copy the strategies of a country with more than 300 million people and a much deeper domestic market.
Dr Miah Hammond-Errey: [00:29:26] You recently stood up the Australian Centre of Evaluation, or ACE, which harnesses methods like randomised trials to assess and evaluate the effectiveness of government projects and supports government-wide improvements in evaluation practices. How have the initial first few months been?
The Hon Dr Andrew Leigh MP: [00:29:42] Wonderfully. It couldn't have gone better. No. Look, we're only in the early, early days. The Australian Centre for Evaluation kicked off on the 1st of July 2023. So it's just in the process now of getting its first evaluations going. But I'm really excited about it, Miah, because this is bringing a more modest, practical, scientific approach to government. It's focused on what works, not what ideology suggests might work. Scientifically analysing whether policies work is a way of ensuring that you get better government for those that most rely on it, and more efficient government for those who are paying the bills. So, it's good for taxpayers and it's good for those who depend on government working effectively. The challenge now is just to scale up that degree of rigorous evaluation and to to bring about the kind of transformation in evidence-based policy in this century that we saw in evidence-based medicine in the last century.
Dr Miah Hammond-Errey: [00:30:35] Were there any examples from overseas that you drew on to construct ACE?
The Hon Dr Andrew Leigh MP: [00:30:42] Overseas, we looked at the Education Endowment Foundation to the work that's been done by the Arnold Foundation and their low-cost randomised trials competition, to the international development area, where the World Bank and USAID have stood up important evaluation outfits, and, of course, to medicine. I think of people like Julian Elliott, who set up living evidence reviews when COVID hit in order to make sure we were distilling the very best evidence. I was a commissioner on the Global Commission on Evidence to Address Societal Challenges report, which was handed down beginning of last year. And that report talked not only about governments as better producers of data, but also the need to better synthesise data.
Dr Miah Hammond-Errey: [00:31:25] When you've spoken about it before, you've said there's a strong focus on the counterfactual. Can you explain exactly what you mean and why it's such an important consideration?
The Hon Dr Andrew Leigh MP: [00:31:33] So if anyone's read a 'Choose Your Own Adventure' book, they'll be familiar with 'The Road Not Travelled'. In 'Choose Your Own Adventure' books, you have two options and you can flip through and put your finger in the book, like most of us do, and then go back and read the other option. So, what randomisation does is it constructs the counterfactual by the toss of a coin. If we have enough people in the room, then we have not only a heads group and a tails group which have the same number of men and women, but also the same number of young and old, the same number of people with anxiety, the same number of people with heart challenges. So, if we then give those two groups a particular treatment, whether that is counselling session or a medication, then we know that their trajectories are the same at the outset. And if we see differences between them, that's got to be due to the intervention rather than to any other factor. When people select into a program, then all of that falls away. The kinds of people who send their kids to after-school tutoring are different from the kinds of people who choose not to send their kids to after-school tutoring. And those kids would probably have gone on a different trajectory, even absent any effect of the tutoring itself.
Dr Miah Hammond-Errey: [00:32:48] Thanks for making a difficult concept accessible. We've got a couple more segments, but just quickly onto some world events. Geopolitical technology competition has well and truly heated up this year. What has been most significant from your perspective?
The Hon Dr Andrew Leigh MP: [00:33:03] The risk that the world is separating into separate spheres. Not only, we've seen separate internets emerging for a while, but also the risk that this happens with the Chips Act in the US and the injunctions on ASML to not continue to supply to mainland China, and the danger that that poses for global cooperation and multilateralism. Australia has benefited hugely from international engagement and from well-functioning global institutions, from the flow of migration, trade and foreign investment. And that's different, it affects us differently as a country of 26 million than it would affect superpowers such as the United States or China, or indeed countries such as India or Indonesia that themselves have large domestic markets. We won't be able to do everything as a medium-sized economy. We will therefore rely on other countries and diverse, well-functioning supply chains are going to be a better strategy for us than trying to onshore everything.
Dr Miah Hammond-Errey: [00:34:20] On to a segment, ‘Emerging Tech for Emerging Leaders’. Can you give insight into how you have led others to navigate major technology changes and adoption?
The Hon Dr Andrew Leigh MP: [00:34:28] Oh, I don't think I'd claim anything so grand, but I do try and surround myself with staff who are brighter than me, and thinking harder about technology than me, and playing with the tech is important. So, you know, I had a plan of a whole bunch of things I wanted to get done this year. Some of them have gone on the back burner because understanding and using AI just seemed to be important enough that it couldn't wait. I wanted to be thinking about the competition implications, and also regarding the way in which these technologies could shake things up.
Dr Miah Hammond-Errey: [00:35:14] Another segment coming up is called Eyes and Ears. What have you been reading, listening to, or watching lately that might be of interest to our audience?
The Hon Dr Andrew Leigh MP: [00:35:22] Uh, I loved Gabrielle Zevin's 'Tomorrow, and Tomorrow, and Tomorrow', which is a lovely book about game designers coming of age in Boston, where I lived for four years and met my wife. I really enjoyed ‘The Seven [Moons] of Maali Almeida’, which is more brutal and historical. It's set in Sri Lanka during some of the worst of the conflict in the 1980s, but then spliced through with this photographer's eye for detail. And really enjoying bits and pieces from the world of science fiction at the moment. Reading William Gibson's ‘Necromancer’, which is sort of old sci fi, where I felt as though it was a gap in a gap in my knowledge I needed to need to fill.
Dr Miah Hammond-Errey: [00:36:20] The next segment is called 'what do you do in your downtime to keep sane?' And whenever I do research for interviews with you, Andrew, I am intimidated by the sheer level of your productivity. A great skill for a minister and former economics professor, but do you have time to wind down and disconnect? And what do you do?
The Hon Dr Andrew Leigh MP: [00:36:36] Mostly exercise. I have a slightly addictive personality when it comes to exercise, so I took up marathon running about a decade ago and then moved into ultramarathons. And I'm training for the Western Australian Ironman at the moment. So that means a long run or a long ride each morning and then fitting in a couple of swims a week. And of course, when I'm running and riding, I tend to be, to have an earbud in and to be listening to an audio book or a podcast, so I get a double joy from that time.
Dr Miah Hammond-Errey: [00:37:10] I was going to ask you what technology brings you the most joy?
The Hon Dr Andrew Leigh MP: [00:37:14] Definitely the ability to listen to audiobooks. I went off reading novels through my 30s and really came back to them with a with a vengeance in my 40s, and I feel as though I'm, I'm just a little more interesting and perhaps a little gentler for, as a result of reading fiction.
Dr Miah Hammond-Errey: [00:37:35] Good advice.
Dr Miah Hammond-Errey: [00:37:40] Our final segment is 'need to know'. And is there anything I didn't ask that would have been great to cover for our audience?
The Hon Dr Andrew Leigh MP: [00:37:46] One of the things is, is being a dad. So that's probably the most important part of my identity. My wife Gweneth and I have three wonderful boys. Sebastian is 16, Theo who's 14, and Zachary, who's 11. One of the treats, I mean, you're in the kind of earlier stages of child-rearing where they look at you as, as a minor deity. And there are so many, you know, reading AA Milne to my kids is a treat which I miss now. You know, that phase has passed, as has the phase where I can easily pick them up and have them on my shoulder as I carry them to bed. But the phase that's replaced it is having these young men who can do stuff that I can't. So, my eldest is into musical theatre and can sing and dance hip hop. My middle child can juggle clubs. In fact, we got him some juggling knives for Christmas last year. You can question how good a parental decision this is and does fabulous magic tricks. And our youngest is a superb artist with a really beautiful eye for detail. So, I never really expected that it would bring me so much joy as a dad to see these people who can do this amazing thing. So so, so that's been possibly one of the greatest, greatest pleasures for Gweneth and me in recent years.
Dr Miah Hammond-Errey: [00:39:15] Thanks so much for taking the time.
The Hon Dr Andrew Leigh MP: [00:39:17] Thank you.
Dr Miah Hammond-Errey: [00:39:19] Thanks for listening to Technology and Security. I've been your host, Dr. Miah Hammond-Errey. I'm the inaugural director of the Emerging Tech program at the United States Studies Centre, based at the University of Sydney. If there was a moment you enjoyed today or a question you have about the show, feel free to Tweet me @miah_he or send an email to the address in the show notes. You can find out more about the work we do on our website, also linked in the show notes. We hope you enjoyed this episode and we'll see you soon.