In addition, our education system is strong. We all love complaining about the state of our schools but the fact is that, fundamentally, our education system is very robust. That's not to say it can't be enhanced but our starting point really isn't bad at all. And while we can't pretend that New Zealand's distance from our markets isn't a disadvantage from a business perspective, the weightlessness of digitalisation will go some way to lessen this as an issue. Of course, our business leaders will still need to travel and business will remain a contact sport, but business communities will have a decent enough view of what the leading edge looks like from their desktop, without having to trek halfway around the world.
Despite these factors, our success in the digital world won't be automatic. There is work that we as a country need to do.
And here's where we need to start:
1. Improve our teaching and learning in three ways. Firstly, we need to make sure that the future New Zealand workforce is equipped with more science, technology, engineering and maths (STEM) skills that are relevant to the future world of work. We have a bad habit in New Zealand (along with many other OECD economies), of teaching subjects in isolation - for example, we often teach maths as if computers and the internet hadn't been invented. Some business leaders go one step further and say we should teach all young people programming skills. But I doubt that's a good idea. It might be good for building a workforce for some companies but it is highly unlikely that all young people will need those skills in the future.
Computers will become ubiquitous, more than they are today, and we don't need to know how a computer works to use it effectively. It would be far better to try to remove currently rigid teaching boundaries. For example, let's try teaching ethics alongside maths so that people can work out when someone is trying to bamboozle them with dodgy statistics.
Secondly, we need to teach the soft skills better. More schools and colleges need to teach students about entrepreneurship, resilience, ethics, other cultures, self-awareness and creativity. One of the great advantages of our open society is that anybody can show creativity and take a risk. We need to encourage more of this - particularly as these soft skills will become the differentiating factors for our young people, who will face global competition.
Thirdly, we need to make sure that our education systems are open to those who might be displaced from their old job. We need to make sure that social protection systems and our education and training are effective, so that people don't feel frightened about losing their jobs because they will be supported and retrained for something new.
2. Make sure that our regulation is fit for purpose. We should welcome Uber and Airbnb, but we should make sure that our regulation does not stop others (such as existing taxi companies and hoteliers) competing. Many countries are trying to stop digital innovation and disruption through the use of outdated regulations. We need to make sure that this doesn't happen in New Zealand. These new operators bring with them innovation and this is no bad thing - as long as we make sure that competitors can emerge, innovate and be successful.
3. Increase our connectedness. We need to make sure that we continue to increase our connectedness - not just digitally but also culturally through immigration and trade. Just because the world will become increasingly digital, this doesn't mean business will stop being done by people for people.
There will be pitfalls too in the new world of work. Here's what to avoid:
1. Special rules for digital. To say that workers who lose their jobs because of digital disruption should be treated differently from other workers is to misunderstand the nature of the change that is occurring.
The fact is there is no divide anymore between the digital economy and the real economy. It is the same economy. No business these days is not digital and no business (including government) is not faced with digital disruption. We should make sure our rules and processes are simple and assist with all disruption affecting businesses.
2. Over regulating or re-regulating. The flexibility and openness of our economy is the big key to future success. Over-regulating could be a disadvantage.
3. Closing ourselves off from the world. We must continue to push forward on free trade and on connecting with the world more generally. We need not be frightened of trade deals. Because our domestic market is so small we need to export more than most other countries to survive. In New Zealand, we have more to gain from trade agreements than almost any other country in the world.
4. Double guessing what will happen. If we try to plan too much for the future we will inevitably be mistaken. The nature of change is unpredictable and the effects difficult to pinpoint. The best way to win in the digital world will be by being open to change, flexible and ready to take advantage of disruption. If we resist change we will lose.
5. Being frightened or worried about our future. New Zealand has always succeeded by being open to the rest of the world as well as through being creative and innovative and having the fundamentals of an open, non corrupt, and flexible society right. And it is these fundamentals that will help us in the future world of work, as they have helped us in the past.
Phil O'Reilly is the CEO of Iron Duke Partners Ltd. He is chairman of the Business and Industry Advisory Committee to the OECD, based in Paris, and a member of the governing body of the International Labour Organisation (ILO) in Geneva. He is the former head of Business NZ.
