“Two years ago, the last time the index was published, we ranked at 15. We leapfrogged Australia, which is now at 16.
“The index surveys countries on their ability to leverage the opportunities coming from digital investment. We jumped so high because of the additional investment we’ve seen from both the Government and the private sector. If we are going to be a real digital leader, we’re going to need to continue that investment, to stimulate and incentivise organisations to continue pushing ahead”, she says.
“In the past, New Zealand has fallen behind in its digital readiness because of our lower technology adoption rates. So Covid helping us get past that is brilliant, but there needs to be continued incentives for organisations to invest.
“The Government has earmarked funds for the software-as-a-service sector, and there is a lot of green energy tech investment as well as Government incentives for others to invest in that space.”
Blythe says there are still big issues to address, especially when it comes to the digital divide.
“This is where there is a real opportunity for New Zealand.
“We need to bring everyone on that digital journey. One reason Australia dropped behind in the readiness index is its digital divide, which is the case in regional Australia. We saw some of that in New Zealand during the pandemic, where there were students who didn’t have the devices or connectivity needed for remote learning.”
The digital divide is not restricted to geographic location. It can run across socio-economic lines, and even across cultural lines.
There have been some good responses to this. Blythe singles out Spark’s Skinny Jump broadband, a low-cost way for families, seniors and other people in need to get online, along with the Government’s continuing investments in rural connectivity. She says these initiatives are critical as we continue to invest in delivering key services online.
“The Government certainly has improved and continues to improve the digital infrastructure. Initiatives like Skinny Jump subsidise broadband to help folks who otherwise may not be able to afford those plans access them and access connectivity. Increasingly, access can be seen as a basic human right. And if in New Zealand, we’re going to increasingly move public services, medical services, banking and other things like that online, we have to make sure that everybody in New Zealand is able to access them.
“Now that the investment has been made, we need to leverage and amplify it,” she says. “The Government is targeting a high-wage, low-emissions economy. There are a few strings to pull together. Supply chain issues, shipping delays, increasing fuel prices and the impact of the war in Ukraine all impact our export potential.
“We need to think about exports that can be delivered digitally, something that’s huge for a country like New Zealand that is geographically isolated. This presents a compelling opportunity that leverages the changes that we were forced to make and it diversifies our economy. We’ve seen strong growth in the technology sector of around 10 per cent in the last year, while sectors such as tourism, which we have traditionally relied on, have declined. Another advantage is that it is more focused on markets like Europe, the US or Australia and less on traditional export markets like China, which has become more of a risk.”
Green Technology
One area of special interest to Blythe is green technology, and, more specifically, green energy technology.
“This is an area where New Zealand is already considered a leader internationally. We’re trading off the clean, green image that we helpfully built up around our tourism, but it translates nicely into digital. It helps that we are blessed with incredible natural resources, so that renewable energy comes to us quite naturally. We’re at around 85 per cent renewable energy now, and the Government target is to get that to 100 per cent by 2035. Which means you are going to see a lot of investment in the green energy space.”
While technology will go a long way toward helping New Zealand meet its emissions targets, Blythe says another development will play an important role.
“The advent of ESG (environmental, social and governance) reporting is a key driver for organisations globally. Around 90 per cent of the S&P 500 companies now have voluntary ESG reporting. We are now seeing a lot of it in New Zealand, too. Russell McVeagh has been voluntarily reporting for a couple of years now.
“In order to do that, you need tools that monitor and track your emissions. They give you insights into where you can reduce emissions, and technology is needed to solve those issues as they arise. There is a huge global demand for this, which is another real opportunity for New Zealand. We are well-positioned to commercialise our expertise because we are already further along the renewable energy path than other countries.”
Much of the demand for commercial companies using ESG reporting comes from inside the organisation. Employees are interested in knowing their employers have values around matters such as climate change that align with their own. Blythe says it has become critical for attracting and retaining talent, which is now more important than ever.
At the same time, a company’s clients and business partners need to do business with other firms that can supply ESG information. In a connected world, a company doesn’t just need to be carbon-neutral internally, it needs its entire supply chain to be on the same path. Blythe says that wouldn’t apply to every company, but it is increasingly important.
For Blythe, having a cohesive, national digital strategy is critical. The country that constantly tops any table or index looking at digital leadership is Singapore. It didn’t get there by accident.
“For years, Singapore has had a solid, government-led and backed digital strategy. Its cohesive initiatives are aligned with that strategy, and it has been incredibly successful.
“We have now got a digital strategy in New Zealand, but there is a lot going on in this space.
“We’ve got the digital trust framework and the consumer data right. There is a cybersecurity strategy. The Government is looking at overhauling the Privacy Act and so on. The criticality is going to be around aligning all these, and then taking stock and looking at where the potential big wins might be in the next few years before looking at the opportunities.
“They need to be cohesive, so we aren’t ending up with conflicting legislative frameworks. We need to create a single digital economy or a single data economy that works.
“The driver for us when we are helping clients think about new legislation, new Government initiatives - we think about how this is going to fit with everything else going on. Is it cohesive, or is this really fighting other initiatives, other legislation that we’ve already got in place?”
· Russell McVeagh is an advertising sponsor of the Herald’s Dynamic Business report.
