AI is predicted to contribute $26.2 trillion to the global economy by 2030, with a focus on automation, healthcare, and education.
New Zealand has the opportunity of the century to use AI to overcome the perennial productivity problem caused by our size and distance, low risk tolerance, and difficulty playing a global game.
But we need to decide that AI is part of our economic and social enterprise – just as we did with powerful inflection points such as the advent of electricity, software, cloud computing, and mobile. We are now in the brand new era of AI, and the shift in how societies will function with AI offers New Zealand a wonderful opportunity.
Prediction machines
To extract maximum value from AI we must understand it is a prediction machine. The volume and quality of predictions AI can make are about to become much cheaper. What becomes expensive is the final decision that needs to be made after all the analysis.
In an AI-driven economic model, there will be huge strain at the point where a few people are required to sign off.
In sectors that pain point is already being addressed. Salesforce’s AgentForce is a suite of AI agents different from traditional chatbots in that they operate autonomously, “analysing data, making decisions, and executing actions without human intervention” in real time.
In the health system, AI can make diagnoses and propose treatment protocols, with medical practitioners signing off on the final decision. It changes the medical field as we know it.
More power
The predictive abilities of AI are what make it so powerful – in the next five to 10 years, probably, Amazon will drop the item you need at your doorstep unasked because the model shows a 95% likelihood you were about to place an order, and it can easily absorb the loss otherwise.
In the same way, future health conditions are going to be more diagnosable before they happen, which can help our health system plan ahead with infrastructure, staffing, training, and investment.
Kiwis have world-leading form in this area. As Emirates Team New Zealand prepared for what would be a triumphant 2021 race, the designers overcame the main bottleneck to innovation – human sailors – by teaching an AI programme to sail.
The model could run thousands of simulations in a short time, and in eight weeks it was defeating the sailors in the simulator. As a Harvard Business Review describes, “the AI began teaching the human sailors new tricks”, trying different racing tactics, figuring out superior solutions for sailors to copy on the water, and experimenting with multiple variations of the same boat simultaneously to build a system of decision-making.
This kind of system can be used in hospitals, universities, companies, not-for-profits, sports teams – anywhere humans are gathering data, solving problems, and working towards goals.
Feedback loops
The important part is the feedback loop. After an action is taken, the model can learn what went right or wrong and deliver better insights to improve itself.
New Zealand is in a good position to apply this in key areas such as housing – to predict demand, optimise construction processes, and identify ideal locations for new developments, informing better planning and resource allocation.
And in skilled labour and immigration, models could identify current gaps and predict future skill shortages to help governments created targeted immigration policies. AI could significantly enhance important sectors such as agriculture and education, boosting sector productivity by 15% to 25% in the next two decades.
Global partners
For a small market such as New Zealand, protecting IP is less important than finding long-term global partnerships.
The objective is to create our pure ‘special sauce’ that cannot be replicated without all the same data – which in terms of protecting national economies and developing national unique selling points in different capabilities is essential to being globally competitive in the information age.
Other major economies are investing heavily.
The US is ahead in adopting AI because it’s a financial innovation hub. India and China are ahead. Singapore is a global leader in AI research and technology, and the Ministry of Communications and Information is driving initiatives and funding to uplift Singapore’s economic potential through AI.
Renewable energy
Renewable energy will be one of the most in-demand commodities globally.
The push towards decarbonisation has created unprecedented demand for renewable energy, and this trend is only accelerating as industries transition to sustainable energy sources.
AI data centres, chip manufacturing, and other high-tech sectors are among the biggest future consumers of renewable energy. AI data centres alone are projected to use up to 8% of the world’s electricity by 2030.
New Zealand has an incredible opportunity to lead here. Our access to geothermal, wind, and solar resources and opportunity to investigate fusion could provide not just for domestic demand but also establish us as a key energy exporter, especially in powering AI and chip production sectors.
By rapidly scaling up investment in renewables, New Zealand can fortify economic gain and productivity while becoming a key player in the global energy transition and offering a competitive edge in AI and high-tech industries reliant on renewable energy.
AI is underpinning new tools for the world around education, healthcare, and housing.
An emergent wave of software entrepreneurs may make life better for human populations. It’s a lucky break; AI provides the opportunity.
Whether you are a chief executive or government minister, what counts is whether you understand your market and can get the data. The next three years will reveal who seized the opportunity today.
