New Zealand must go beyond AI adoption to gain productivity advantage

New Zealand's rapid adoption of artificial intelligence (AI) is just the beginning of a broader opportunity to boost productivity and competitive advantage. Simply implementing AI won't suffice; the real gains come from reimagining how work is done, redesigning processes, and integrating AI into organizational models.

The greatest productivity benefits will likely come from sectors and organizations where AI enables comprehensive workflow redesigns, increasing output, quality, speed, or innovation without proportional resource increases. New Zealand's business landscape, dominated by small enterprises, presents a unique challenge, with 97% of businesses employing fewer than 20 people. While small businesses may see gains in administration and customer service, the biggest economy-wide opportunities lie in larger sectors with significant economic activity and potential for transformative work changes.

To identify high-impact areas, New Zealand should focus on three factors: economic significance, AI opportunity, and local capability. Government and business leaders must collaborate to create sector-based ecosystems, fostering shared challenges, standards, and data arrangements. Countries like Germany and Singapore are already leveraging similar models, and New Zealand could benefit from making expertise and proven approaches more accessible across industries.

The goal isn't just to adopt AI but to develop distinctive applications that leverage New Zealand's unique strengths, such as primary industries, natural resources, and mātauranga Māori. By focusing AI capability in strategically important sectors, creating conditions for widespread adoption, and turning AI into a competitive advantage, New Zealand can maximize the technology's potential for long-term economic benefit.