Executive Survey Indicates Software Innovation Boosts Revenue
In a significant revelation, GitLab Inc has published a report titled "The Economics of Software Innovation: AUD$6B Opportunity at a Crossroads." The report, based on a survey of 259 C-level executives in Australia, sheds light on the role of software innovation in business success and the growing impact of AI.
The survey results indicate that executives in Australia recognise AI-enhanced software innovation as a key driver of business growth and expansion. On average, companies are reporting an impressive AUD$31,223 per developer annually in savings from AI investments. This is not all; a potential value of AUD$4 billion per year is at stake for organisations that optimise the human-AI partnership.
The report identifies that companies pulling ahead are those blending AI with human expertise, leveraging agentic AI with intention, aligning software strategy with business value, and building guardrails to innovate responsibly. This approach is expected to result in a 34% increase in revenue and a 40% increase in developer productivity.
Strategic vision (40%) and creativity (39%) rank as the most valued human contributions to software development. Interestingly, 76% believe that human input for human-AI partnership should be at least 50/50, with only 24% believing that AI should do the majority of the work.
In terms of governance, 53% are implementing regulatory-aligned governance frameworks, while 91% express the need for businesses to prioritise training employees to work alongside agentic AI to address skill gaps.
The most common metrics used today to measure software innovation success are increased business growth (37%), enhanced developer productivity (37%), and enhanced customer experience (35%).
However, the report surfaces tensions around skills gaps, human-machine collaboration, and the need for formal governance of agentic AI. Topping the list of concerns around the adoption of agentic AI are data privacy and security (52%), cybersecurity threats (42%), and maintaining governance (41%).
Despite these challenges, 90% of executives expect agentic AI to become the industry standard for software development within three years. Moreover, 84% report a willingness to invest over half of their company's annual IT budget to prioritise software innovation.
Craig Nielsen, vice president of Asia Pacific & Japan at GitLab, stated that AI-fuelled software innovation is a core business priority for 89% of executives in Australia. The report also highlights that 46% are establishing AI ethics committees, while 44% are using third-party audits to ensure responsible AI adoption.
The survey further reveals an interesting discrepancy between the aspired 50/50 human-AI partnership and the current reality, where humans handle three-quarters of the work, and AI contributes just one-quarter.
In conclusion, the report underscores the significant economic opportunities and challenges associated with AI-enhanced software innovation in Australia. As businesses continue to navigate this landscape, striking the right balance between human expertise and AI technology will be crucial for success.
