Aotearoa New Zealand’s $7.8 billion digitization opportunity

When it comes to productivity, it’s no secret that Aotearoa New Zealand lags far behind our OECD counterparts. Actually, ours A recent study It shows that Kiwis would need to work 20 per cent more to reach OECD average GDP output.

For a Kiwi working a 40-hour week, this equates to working an extra day a week to make up the difference in labor productivity – and that’s just to reach the average productivity benchmark.

These are impossible numbers.

We can’t just sit back and work towards better productivity. We need to make sure that every hour spent at work is doing what only a human can do.

The possibility of digitization

We released him this week New insights Developed by the New Zealand Institute of Economic Research (NZIER), which shows a 20% increase in the number of businesses adopting cloud-based business tools in the future could add up to $7.8 billion to Aotearoa’s annual GDP due to improved productivity.

In uncertain economic times, we must do everything we can to digitize our small business economy and make this country the world’s leading digital nation.

Research has also shown that the payback period for investments in business digitalization is relatively short, usually less than two to three years, before they start to generate permanent positive returns.

In as little as two years, we can help rejuvenate the economy, potentially adding billions of dollars in improved productivity delivered by increased adoption of digital tools.

Learning from international success stories

While economies around the world continue to digitize rapidly, Aotearoa New Zealand’s digital competitiveness lags behind in key categories of knowledge, technology and future readiness.

We ranked 27th out of 63 countries in the 2022 IMD Global Digital Competitiveness Ranking, down from 19th overall in 2018.

Singapore and Denmark continue to lead the digital journey globally and are prime examples of what strong, committed public investment in digitization can do for an economy.

Singapore’s Go Digital program Includes extensive SME support, such as pre-approved digitization solutions supported by the Government’s Productivity Solutions Grant.

It also offers an SME Chief Technology Officer – as a Service – self-help platform that enables business owners to identify their digital needs and access digital consultants for personalized advice and market-proven solutions.

Roadmap for advancing digitization in Aotearoa New Zealand

Of course, the business community cannot do it alone. The New Zealand government must do everything it can to support our digital progress.

We need policies that encourage the expansion of the digital economy by addressing the key barriers many business owners face, including financial constraints, skills gaps, attitudes and awareness.

Our latest NZIER report highlights lessons from digital countries to inform future digitization action and policy.

In the short term, the development of the Productivity Solutions Grant to finance business digitization is a key example of enhancing growth.

Overall improvements in digital literacy at all levels of society are critical in the long term, as is increasing the competitiveness of Aotearoa New Zealand’s tech sector immigration policy.

There is no quick fix to a problem as complex as productivity. But we know that investing in further digitization is a step in the right direction.

For NZIER’s breakdown of priority actions for government, read the full report.

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