Technology needed to help improve NZ’s low productivity

New Zealand’s productivity is low and not improving compared with its international partners but new technology can help transform services and lift productivity, NZTech chief executive Graeme Muller says.

He says productivity is important as it is a measure of being able to produce more with less effort or resources. Services make up 70 percent of GDP and it is here where New Zealand is least productive, particularly government services, which account for half of all services, Muller says.

“The government understands these services need to be transformed in order to improve productivity and they appreciate technology is the way to solve the problem. The government has developed a strong ICT strategy and they have clear targets to drive better public services.

“But according to Deputy Prime minister Bill English the transformation is not happening fast enough. This is due to government employees’ fear of failure, resistance to collaboration and capability gaps.

“NZTech recently met key senior government officials at a Government Technology Summit in Wellington which we organised. This involved senior executives and chief information officers from a broad cross section of government agencies and the tech sector. A clear theme from the summit was that transforming government services will lead to better outcomes for all New Zealanders, especially those in most need.

“So the Deputy PM is planning to put further fiscal pressure on agencies to try to force them to innovate. The tech sector is concerned that without cultural change, fiscal pressure runs the risk of driving a cost reduction mentality in agencies, resulting in decreasing service rather than transformation.

“The summit recommended that further investment be made in alignment with the government ICT strategy – building better tech capability across government, continuing to drive better use of data, working in innovations with the tech sector and agencies sharing examples of successful innovations with each other.

“The Government is the tech sector’s largest client. Engaging proactively together will not just improve the country’s productivity it will also further stimulate the country’s fastest growing export sector. With up to 40 percent of all money spent on ICT in New Zealand spent by the public sector, enabling agencies to share innovative ways of using technology can drive better public services,” Muller says.

ICT is at the heart of the transformation and the government is looking to NZTech to work with government to enable this transformation.  Since 2012, better use of technology has delivered a 16 percent reduction in the reported effort in dealing with government departments. The vast majority of government spending is devoted to social services.

With New Zealand’s exports still dominated by the primary sector, New Zealand needs to find other sources of exports. The tech sector presents the most obvious opportunity to expand the diversity of New Zealand’s exports. Ongoing investment in the New Zealand tech industry can help achieve these aspirations, while helping to drive better public services, Muller says.

NZTech is the voice of the New Zealand technology industry whose role is to help drive economic growth led by technology. It represents over 280 tech companies throughout New Zealand including the ICT multinationals, hi-tech manufacturers, local NZ ICT firms and start-ups. Technology is the fastest growing industry in New Zealand and the fourth largest export earner with exports of over $6 billion in 2015.

Download the NZTech Government Technology Summit Briefing Paper here