NZ backs local AI in tech Industry Transformation Plan

New Zealand Technology Industry Transformation

The New Zealand Government is seeking public feedback on its newly released draft Industry Transformation Plan (ITP), aimed at accelerating growth in the country’s burgeoning digital technologies sector.

NZ’s Digital Economy and Communications Minister David Clark unveiled the draft Plan late last week, which highlights government-led priorities, emerging opportunities and potential challenges in growing New Zealand’s nearly $7 billion digital technologies sector.

Despite the economic impact of Covid-19, Clark said the local digital technologies sector is still “thriving”, growing at nearly twice the rate of the general economy.

“[The digital technologies sector] is now a major exporter for New Zealand and contributed $6.6 billion to the economy in 2019”, he said.

According to NZ’s official statistics bureau, Stats.NZ, the ICT industry alone is estimated to have delivered $2.1 billion in exports in 2019, up 47 per cent from 2017. This makes it the country’s seventh-largest export earner – and larger than NZ’s more celebrated wine industry.

Global perceptions of New Zealand, however, are still “dominated by natural landscapes and agriculture,” the draft ITP authors concede, “with relatively low awareness of our innovation and technology capabilities”.

The dedicated digital technologies ITP provides a guide for the Government to better collaborate with the tech sector to help lift the industry’s “productivity, increase exports and further employment opportunities”.

“We are aware the tech sector is a transition industry for New Zealand, and we need to support the industry to grow,” Clark said.

The ITP and its workstreams are framed around three core priorities: accelerated growth, strong foundations, and Māori participation.

One of the key ‘accelerated growth’ priorities of the ITP is to expand New Zealand’s emerging capabilities in artificial intelligence (AI) technologies.

“Over the longer term, the ITP will also ensure AI is well placed to become a major driver of growth,” the paper notes.

Acknowledging NZ’s still “immature” AI ecosystem, the sector “continues to show strong growth”, with the ITP recognising the growth of peak body, the AI Forum, to a current membership of more than 190 organisations.

“Research on AI readiness placed New Zealand in the economies with strong comparative strengths group, meaning we are well positioned to maximise our strengths and make the right strategic choices to grow AI,” tapping into an industry predicted to underpin $US15.7 trillion of global economic growth by 2030.

Investment in digital skills and growing digital talent pipelines form a key part of the ITP’s ‘strong foundations’ pillar. The demand for digital skills has no doubt been compounded by NZ’s strict Covid lockdowns, with its global talent pipeline shut off for more than two years.

“The required transformation will not be possible unless the skills pipelines, industry culture, talent investment and other skills-related challenges are addressed,” it said.

Demand for tech specialists has increased significantly in the country, with compound annual employment growth of 4.5 per cent between 2015-2020, compared to a national average of 2.4 per cent.

As of 2020, New Zealand’s digital tech sector employs more than 38,000 individuals, representing around 1.7 per cent of total employment in the country.

Strong growth within the sector (as well as other sectors impacted by digital technologies), and increasing demand for digital skills, has no doubt made it “difficult to acquire suitably experienced and qualified talent”.

The Plan further stresses the local tech industry’s ongoing concerns that “immigration settings are not aligned to sector needs”.

Finally, the ITP concedes that the sector “needs to do more to welcome and attract participation by Māori and other demographics”.

“Given the increasing role of digital across the economy and society, it is vital Māori are empowered to be active participants in the sector, with government having a significant role as a Te Tiriti [treaty] partner.”

“An industry culture that does not always promote a safe and welcoming work environment, is contributing to under-representation of Māori, Pacific and women.”

The ITP also noted industry concern over government procurement systems, which they say hinder innovation and collaboration.

Despite updates to the Government’s procurement rules over time, “the process remains cumbersome, especially for smaller suppliers”.

“New Zealand businesses,” it added, “also consider it difficult to compete against large international firms”.

Developed by the Ardern Government, ITPs are industry-specific plans, providing collective action points for government, industry, workers and NZ’s Māori population to help accelerate the country’s post-Covid economic recovery and progress the country to a “high wage, low emissions economy”.

Besides the digital technology sector, ITPs have so far been developed for the agritech and construction sectors, and are in development for advanced manufacturing, food and beverage, and forestry and wood processing.

Submissions on the final digital technology ITP are due by 31 March 2022.