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Spark study finds uplift in advanced digital technologies could boost productivity, increase industry output

Spark and the New Zealand Institute of Economic Research (NZIER) today launched a new study – Accelerating Aotearoa businesses one technology generation forward – to explore how Aotearoa’s well-documented productivity challenges can be addressed by the acceleration of advanced digital technologies.

The study combines insights from global research of small-advanced economies, economic modelling by NZIER, and Spark’s knowledge of current and future opportunities enabled by digital technology. The findings reveal clear and compelling benefits of modernising New Zealand’s economy – with a 20% uplift, the use of advanced digital technologies1 is predicted to increase industry output by up to $26 billion over the next decade, and GDP by as much as 2.08% per year.

“New Zealanders generate significantly less output than many other small advanced economies, despite working longer and harder comparatively as a nation,” says Spark CEO, Jolie Hodson. “Our productivity is a persistent challenge that has seen little change over many decades, but what is changing is the urgent need to address it.

“Aotearoa is getting bigger, older, and more diverse. Inflation is forcing a greater focus on efficiency and cost control, and we are facing more frequent and extreme weather events. The good news is that the pace of technological advancement globally is accelerating at an even faster rate, and advanced digital technologies are now reaching a level of maturity where they have the potential to solve business challenges where it wasn’t possible in the past.

“This is a key focus for the initiatives we are launching today – how can technology help New Zealand organisations become more productive and sustainable, and in doing so, support Aotearoa to move forward one technology generation.”

NZIER CEO, Jason Shoebridge says the study shows the importance of digital technology in transforming the business landscape in Aotearoa, “There are many business and policy decisions that need to be made to ensure that we benefit from the opportunities that digital transformation provides. We have identified in our analysis the significant benefits in adopting digital technology and applications.

“The report has national implications, and we are excited to be part of the conversation. The key message we want organisations to take from the report is that if we want to grow New Zealand’s productivity, digital transformation is critical,” says Shoebridge.

As part of Spark’s ambition to support New Zealand businesses to accelerate one technology generation forward, the digital services provider is using the report’s insights to inform a new programme of initiatives, which will be rolled out over the next three years. The first three initiatives launch today and are aimed at helping businesses better leverage advanced technologies to improve productivity.

The opportunities and Spark initiatives

Accelerating Aotearoa businesses one technology generation forward outlines three opportunities for Aotearoa to lift productivity. In response to these opportunities, Spark has developed a range of initiatives to help New Zealand businesses hit fast forward.

Opportunity: Measuring progress

According to the report, measuring the digital adoption of New Zealand businesses at a national level would unlock and target investment in productivity improvements.

Unlike the European Union (EU) and many other developed countries, New Zealand has no robust or sustained way of measuring digital adoption or progress. As a result, there is no way of tracking how we’re improving, if at all.

Spark supports the need for a digital transformation benchmark for New Zealand and recommends this is developed collaboratively between the private and public sectors as part of the next Digital Strategy for Aotearoa.

In the absence of a current benchmark, NZIER and Spark have developed a spectrum of digital maturity. This is aimed at helping organisations identify the digital technologies with the strongest potential to accelerate transformation and drive productivity for their business.

And to help businesses understand the state of their current adoption of digital technologies, Spark has provided a series of Digital Maturity Frameworks to help organisations review their current use of AI, data analytics, IoT and cloud computing.

Opportunity: Harnessing artificial intelligence

Artificial intelligence can enable productivity gains beyond labour productivity alone.

NZIER’s Quarterly Survey of Business Opinion supplementary survey highlights that when it comes to digital technology, generative AI is the biggest knowledge gap identified by New Zealand business leaders, with 44% agreeing they lack enough information.

Spark supports the development of an AI Strategy for New Zealand through collaboration across the public, private, and community sectors. A nationwide AI strategy would support AI growth and innovation and help ensure we support our local AI industry to thrive – so that

New Zealand remains a creator of AI, not only a consumer or net importer of it.

To help kickstart the AI learning journey for businesses, Spark is launching a dedicated New Zealand AI for Business Mini MBA programme in 2024. In collaboration with Section, a world-leading business education platform founded by NYU Stern Professor Scott Galloway, this will be the first time the programme is offered to a country-specific cohort, with 150 sponsored places for New Zealand business leaders.

Businesses can apply for a place on the New Zealand AI for Business Mini MBA here.

Opportunity: Research and development in an innovation ecosystem

In the last 20 years, New Zealand’s research and development (R&D) spend has been consistently below the OECD average, with business expenditure on R&D particularly low. This means our ability to transform businesses with technology is under-leveraged3.

To help boost the adoption of advanced digital technologies and to support innovation among New Zealand’s largest organisations, Spark is committing $15 million to an Innovation Fund for its business and government customers over the next three years. $12 million is allocated to customers already, and an additional $3 million will be available for customers to apply for.

The full report Accelerating Aotearoa businesses one technology generation forward is available here.

 

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