Young says: herald“We’re currently bouncing around in the low 20s against 127 countries. We’ve been pretty much stuck there for a while now. We’re not going up or down.”
The president of the Technology Users Association of New Zealand (Tuanz) says we are falling behind our major trading partners. The report points to research that rates New Zealand’s technology adoption lower than other small countries such as Singapore, Denmark and Finland.
seek national leadership
“Above all, this briefing calls for national leadership,” TechLeaders co-chair Liz Gosling said in the report.
While none of the business leaders surveyed asked for benefits, they wanted the government to step up innovation with policies that make it easier to adopt artificial intelligence and other new technologies, as the report states, “AI is no longer a side experiment or isolated pilot; it is rapidly becoming embedded in corporate workflows, customer interactions, public services, and board decision-making.”
The report summarizes business leaders’ wishlists as follows:
1. Implement mandatory and non-negotiable cybersecurity standards
“One of the things leaders are talking about is that the government is going to take the lead. The government has now released a cybersecurity plan,” Young said.
But what our leaders want to know is the actual consequences when things go wrong.
“So it’s not just a slap in the face, it’s really encouraging them to do things the right way, and that’s interesting to them,” Young said.
In Australia, major data breaches can result in fines of up to A$50 million if an organization’s defenses are inadequate. (Last October, the Australian Clinical Institute had to pay a fine of A$5.8 million).
Additionally, in the ManageMyHealth data breach, experts pointed out that while the New Zealand government has published a robust set of security protocols, including two-factor authentication, they are voluntary and there are no consequences for not following them.
At a day-to-day level within companies, “shadow AI,” or people using unapproved tools, has become a major security problem, leaders said.
2. Establishment of a national digital clearinghouse to vet global technology vendors
Young sees a lot of duplication of efforts as various public and private organizations evaluate new technology companies and new products, such as Anthropic’s Claude Mythos, to cite recent controversial examples, against a backdrop of skills shortages in AI and other emerging technology fields, according to research leaders.
“They very much want the government to take control of the payment shops, so they need to understand what some of these big vendors are doing and whether it’s up to standard.”
3. Government-led workforce development programs to build AI capabilities
Although the technology labor market is generally easing, “organizations are grappling with a severe shortage of specialized ‘deep tech’ talent, exacerbated by continued brain drain to Australia and the AI-driven ‘expertise paradox’,” the report said.
The paradox of expertise is where Young’s analysis comes in: We are “using too much AI in the wrong places.”
Organizations have prioritized senior staff overseeing “automated deliverables” rather than hiring new employees into the workforce.
“To address this significant deficit, digital leaders should minimize offshore outsourcing and instead prioritize the recruitment and intensive training of young local New Zealanders to sustainably rebuild the country’s long-term digital capacity,” the report says.
In the age of AI, organizations need to focus on skills over qualifications, the report says. It means focusing on continuous learning.
For the Crown, the report says there is an “urgent need for a government-led workforce development program that embeds AI literacy into education and stems the ‘brain drain’ of talent to Australia”.
4. Accelerated advancement of a secure national digital identity framework
The government has made good on its promise to release the Govt.nz app by Christmas last year, which is essentially a shop window for a range of existing web-based services.
New features such as digital versions of driving licenses and access to medical records (from public systems) are still being developed.
A key element supporting the technology is missing.
“There is strong demand for a formal national digital identity framework,” the report states.
“Leaders maintain that a secure and centralized national identification service is essential to build trust, prevent fraud, and drive significant efficiencies across both public and private sector transactions,” the report states.
5. Recognition of data platforms as critical national infrastructure
As one executive noted, “To truly leverage data for the public good, there is a critical need to replace localized and fragmented systems with a single, unified data platform (such as a single patient management system for the entire healthcare sector).”
As data becomes more centralized and algorithms become more autonomous, the concepts of data sovereignty, security and trust are emerging as key board-level priorities, the report says.
“Sovereign AI” – the ability of a nation or entity to control and deploy models using its own localized data and infrastructure – is rapidly becoming a source of geopolitical and competitive advantage.
“By treating data platforms as critical national assets and completing a secure national digital identity framework, New Zealand can move beyond the current hype and deliver a productive digital future,” the report said.
6. Clean up dirty data
Another issue raised by nearly all interviewees, Young said, was dirty data, or information that is scattered, inconsistent, or otherwise unsuitable for artificial intelligence to chew through.
“If we don’t fix the data, we won’t get the benefits from AI that we want… AI is everywhere, but trying to get value out of it is very difficult, so we started by integrating data,” said Matt Cocker, Freightways’ chief information officer.
What does Mr. Young hope for in an election year?
The Tuants boss said: “There are two key issues: cybersecurity and technology talent. Above all, technology leaders, whether it’s AI or something else, want an approach to digitalisation from an electorally viable, collaborative and cross-party government.”
Young says that with the constant shifts in strategy from successive governments, digital leaders “have no idea what the vision is or where they’re going.”
P.S. Top tips for AI adoption from business leaders
The Digital First report provides five practical tips, based on interviews with New Zealand business leaders and ‘trends in international governance’.
1. Centralized AI governance. Organizations should establish an internal AI clearinghouse or cross-functional council to centrally review, prioritize, and approve all AI requests. This provides employees with a safe and sanctioned alternative to ensure alignment with business objectives, manage vendor costs, and reduce the risk of shadow AI.
2. Securing Agent AI. Organizations must adopt a zero trust approach to agent AI. Cyber security architectures must be updated to treat autonomous AI agents as active network users and implement strict identity verification, least privilege access, and continuous logging of tools that interact with corporate systems. High-impact operational technologies must maintain air gaps where appropriate.
3. Deploying practical AI. Companies should only focus on very specific and measurable use cases leveraging commodities and embedded AI. Rather than investing heavily in their own custom models, companies should tap into the AI capabilities that already exist in their existing enterprise software suites. By targeting AI to specific labor-centric bottlenecks, you can directly quantify time and cost savings and prove your return on investment.
4. Continuous training with human participation. Leaders must invest in ongoing human-involved education programs. Static IT policies are no longer sufficient. Organizations need a rolling training effort that teaches staff how to effectively prompt, recognize AI illusions, and maintain critical oversight, ensuring that final decisions that affect customers or core operations are always approved by human experts.
Tuanz once again collaborated on One NZ’s annual survey.
“The biggest challenge is balancing speed of transformation with operational resilience, a tension that many digital leaders across New Zealand are feeling,” said Adrian Albuque, the company’s chief information officer.
“We expect transformation to be difficult, whether it’s modernizing our core platforms, increasing cyber maturity, or incorporating AI into delivery. That’s why we needed to sharpen our priorities, accelerate technical debt reduction, and focus more on measurable outcomes.”
Chris Keall is based in Auckland herald’s business team. he herald In 2018, he served as technology editor and senior business writer.
