AI's Impact and Opportunities in New Zealand
Here, we will present insights from various sources to provide a comprehensive overview of Artificial Intelligence's (AI) current and future impact on New Zealand's economy, workforce, and business landscape. It highlights key themes, critical facts, and strategic considerations for the nation.
Here is a video created by Notebook LM discussing the implications of AI in New Zealand Businesses.
1. AI's Disruptive Force and the Exposure of "Low-Value" Work
AI is fundamentally changing the nature of work, extending its disruptive reach far beyond manual labour to encompass white-collar roles previously thought to be "safe." This shift is exposing what some sources refer to as "low-value" or "bullshit jobs" – roles that create the "appearance of value rather than tangible impact."
Automation of Information-Heavy Sectors: Generative AI tools like ChatGPT and Midjourney can now "produce policy briefs, analytical reports, software code, design assets and marketing copy in seconds." Specialised systems like PolicyPulse can even "generate structured briefs and thematic syntheses – tasks that once required teams of experts."
Economic Impact on High-Skilled Services: A 2023 Goldman Sachs report estimated AI could automate "300 million full-time jobs globally," with the highest exposure in "administrative, legal and other information-heavy sectors." The International Monetary Fund warned that economies reliant on "high-skilled services – such as education, law and finance – face both job losses and rising inequality."
The "Bullshit Jobs" Phenomenon: Echoing David Graeber's concept, many roles in "low productivity service sectors such as marketing, consulting and corporate administration" have seen significant growth between 2000 and 2018. These are precisely the tasks AI can now perform, leading the OECD to note that "routine information processing jobs face the greatest risk." As one source puts it, "AI is not only replacing roles – it is revealing how insubstantial many of them were."
Finance Sector Reassessment: The finance sector, often criticised for expanding "beyond its productive purpose," is seeing AI automate functions such as "risk modelling, compliance and equity research," prompting a reassessment of its "true economic value."
2. New Zealand's Unique Position: Resilience in the "Real Economy"
Despite the global disruption, New Zealand is potentially "structurally insulated from the worst of the AI shock" due to its focus on tangible, physical, and human-centric work.
Reliance on Physical and Essential Services: Approximately "70 percent of its exports come from agriculture, horticulture, seafood and forestry." Domestically, leading employment sectors include "aged care, physiotherapy, plumbing, childcare and early childhood education." These roles require "physical dexterity, sensory judgement and human empathy – skills AI cannot yet credibly replicate."
STEM Advantage: New Zealand's investment in STEM education is seen as "timely" as STEM-related occupations face the "lowest automation risk." This contrasts with the humanities, which "tend to reward theoretical fluency and stylistic polish – areas where AI excels."
Innovation in Traditional Sectors: Innovation is already occurring in these "real economy" sectors, such as "Robotic milking systems," "biosecurity monitoring," and "forestry research targeting carbon-neutral timber."
Strategic Strength: New Zealand's focus on "tangible, value-producing work could be a strategic strength" in an era where many advanced economies are "over-invested in finance, bureaucracy and 'bullshit jobs'." The key is "deepening its strengths in sectors AI cannot yet touch – food production, care and infrastructure."
3. AI as a Productivity Driver and Economic Catalyst for New Zealand
AI is not just a threat; it's a significant opportunity to boost productivity and global competitiveness, particularly for New Zealand's lagging productivity rates.
Addressing Productivity Lag: New Zealand's labour productivity lags behind the OECD average, shrinking by 0.9% in the year to March 2024. AI is seen as a "critical part of the solution," with research indicating generative AI can drive "efficiency gains of up to 30% and reduce costs by 20%."
Economic Impact: Generative AI "could add over 15% to NZED's GDP by 2038." Furthermore, employees could "save nearly an hour every day or 275 hours a year through generative AI. This is projected to add $76 billion to New Zealand's GDP by 2038."
Smart Manufacturing: AI can "totally revolutionize the manufacturing scene in New Zealand," boosting "efficiency," creating "new jobs," and enabling "predictive maintenance." Specific examples include AI analyzing data in real-time to "find bottlenecks," "predict problems," and "automatically adjust the flow of materials." This can lead to "efficiency boosted by 15%."
Supply Chain Optimisation: AI can help New Zealand overcome its isolation by "optimising inventory," predicting "demand," and making "super accurate forecasts" based on "historical sales, market trends, even things like weather patterns in the economy." This can minimise "shipping delays" and "save money on Transportation," leading to a "more resilient supply chain."
Environmental Benefits: AI can contribute to "sustainability" by enabling "factories powered by renewable energy," using "resources more efficiently," and "minimising waste," fostering a "circular economy."
Global Reach for Kiwi Businesses: AI and digital tools allow Kiwi businesses to "scale internationally without the burden of physical expansion," enabling them to reach "one billion new consumers" in emerging markets by 2035.
4. The Rise of Agentic AI and the Evolving Workforce
The next evolution of AI, "agentic AI," is poised to transform the workplace, fostering a hybrid environment where humans and AI collaborate.
Agentic AI Defined: An AI "agent" is a "piece of software that has a role in an identity" and a "specific job to do within an organisation," such as a "researcher agent" or an "analyst agent."
Types of Agents: Retrieval Agent: Reasons over knowledge to provide answers (e.g., Microsoft Copilot).
Task Agent: Can perform actions on behalf of a user, though these actions are typically prescriptive (e.g., sending emails, processing performance reviews).
Autonomous Agent: Can "effectively work out how to achieve an outcome by itself" by generating a "chain of thought" and leveraging various resources or other agents to reach a goal.
Teams of Agents: The most "mind-blowing" aspect is the collaboration of "a team of agents," where different agents perform specialised tasks and pass information between them. An example cited is an audit firm using a "researcher agent," "analyst agent," "editor agent," and "critic agent" to produce a report in "hours" that would traditionally take "weeks."
Human-AI Collaboration: The future workplace will be a "hybrid workplace" where "humans and the AI kind of agent digital employees" achieve goals together. Humans will become "orchestrators for the agents," supervising and guiding them to achieve desired outcomes. "Every employee will have agents to manage and control and to use."
New Job Roles: AI is not seen as a "job killer" but rather a "job creator," shifting the types of jobs available. There will be a need for people who can "design, implement and maintain these AI systems," "analyse the data," and "make decisions based on the ai's insights." Training programs are crucial to equip New Zealand's workforce for this "more digital Workforce."
5. Challenges and Strategic Imperatives for New Zealand
Despite the immense potential, New Zealand faces significant challenges in AI adoption and must take proactive steps to ensure widespread benefits.
Digital Divide and Maturity Gap: "New Zealand businesses aren't ready" for AI. "40% of companies in Australia and New Zealand sit in the bottom quarter globally" in terms of digital maturity. Many companies are "still reliant on manual, paper-based systems that reduce productivity and hinder innovation."
Building a Digital Core: AI "depends on a modern digital backbone – cloud infrastructure, clean and accessible data, and agile operating models." Investing in a "strong, cloud-based digital core" is "essential to unlocking productivity" and reducing "technology debt."
Skills Gap and Workforce Development: While AI can save employees significant time, a "skills gap" exists. "Every dollar spent on digital tools should be matched by investment in skills and capability." Widespread "digital upskilling" is crucial to ensure the workforce can "lead with tech."
Strategic Adoption for SMEs: Small and Medium-sized Enterprises (SMEs) are "at risk of falling behind and missing out on the benefits AI can bring." "60% of small businesses in New Zealand are missing out on a staggering $83,000 a year by not having a system like this" because "88% of our consumers are doing their research online before buying or renting any service."
Government Role: The government has acknowledged the need to "increase awareness and adoption of AI." Initiatives like the Auckland Technology Alliance, AI Activator, Elevate, and GovGPT show a growing commitment. The government can provide "incentives for businesses to invest in AI," support "education and Workforce Development," and "shape regulations to make sure AI is developed and used responsibly, ethically and for the benefit of everyone."
Ethical Considerations and Responsible AI: As AI becomes more integrated, ethical considerations, explainable AI, addressing bias, data governance, and cybersecurity are gaining prominence. Microsoft, for instance, guarantees that customer data will not be used to train its models, a crucial aspect of "secure AI utilisation."
Clear Strategy and Data Foundations: Businesses must "start with a clear strategy," understanding that "AI is not a magic wand." Strong "data foundations" are "essential for effective AI" as "without strong data foundations, AI is unlikely to deliver real business value."
Early Adoption is Key: Businesses that "get on board with AI early on, they'll be the ones who can compete globally, optimise their operations create new products that people actually want." As one expert concludes, "New Zealand can't afford to be busy being busy. To reverse our productivity slide, we must build the foundations for AI, accelerate digital maturity, and empower our people to lead in a tech-driven world. The window of opportunity is open. We must step through it."
