Technological change and the future of work

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The Productivity Commission has completed its inquiry into technological change and the future of work, and presented its final report and recommendations to Government. We’d like to thank everyone who submitted to this inquiry, commented on blog posts, met with us, took part in our focus groups, or otherwise lent their perspectives, experience and insights to our work.

Technological change and the future of work

What did the inquiry find?

Technology doesn’t just replace jobs, it also creates them. Technology has many effects on the labour market, some of which are positive for workers, the quality of work, and jobs. Predictions that technology will inevitably replace work are simplistic and out of step with historical experience.

There isn’t much sign of looming technological disruption. Faster technological progress would be evident in labour market and economic measures, such as productivity growth, occupational churn, and business start-up rates. But across the developed world, all of these measures are slowing or declining.

New Zealand needs more technology, not less. Technological progress and adoption drives productivity and income growth. If we want higher incomes for ourselves and our children, New Zealand firms need to take up technology at a faster rate than has been the case in recent years.

New Zealand is well-placed for faster technology adoption in some respects, but not in others. By international standards, adult New Zealanders are skilled and train at high levels. Our policy settings generally encourage openness to ideas, goods, services, investment and skills. And our labour market has historically done a good job of creating lots of jobs. On the other hand, core skill levels in our schools are dropping; high house prices make it hard for some workers to move to better jobs; and New Zealand’s business environment lacks dynamism.

New Zealand should build on its strengths and address its weaknesses. The Commission recommends a number of policy changes to better prepare current and future New Zealanders for the future of work:

  • Make the training system more flexible and accessible. Shorter courses, and better access to financial support, will make it easier for New Zealanders to keep their skills current and retrain.
  • Improve and expand careers advice and employment support. More can be done to help people successfully navigate career and job change.
  • Urgently address the performance of the school system. Schooling that leaves a significant share of New Zealander with poor skills will leave them ill-prepared to succeed in the future.
  • Update employment law to target harms, not platforms. ‘Gig’ work creates benefits for many people. Employment law should be updated to recognise how technology is changing some work and make it easier for contractors to gain benefits such as training, insurance and superannuation contributions.
  • Explore options for better income smoothing. Some New Zealanders who lose their jobs currently face large falls in incomes and high financial stress.
  • Update regulation to remove barriers to technology and promote worker mobility. Some New Zealand regulations need refreshing, including data access, competition policy, genetic modification controls and land use policies.

Find out more, by reading the final report and At a glance:

The inquiry

The Government asked the Productivity Commission to explore the impacts of new and changing technology on the quantity and nature of work. Read our brief here.

The Commission received and considered 85 submissions, consulted with a broad range of stakeholders (45 engagement meetings and 11 conferences/roundtables), held workshops on the digital divide and micro-credentials and shared insights via a dedicated FutureworkNZ blog.

Consultancy projects were commissioned to provide expert advice on specific issues, including Unemployment insurance what can it offer NZ? (Kathy Spencer), Measuring the gig economy, The impacts of job displacement on workers by education level, Occupational drift in New Zealand, Returns to adult education and training in New Zealand (Motu) and Subject choice for the future of workInsights from focus groups (NZCER).

As per the brief, the Commission released a series of draft reports: Technology adoption by firmsEducating New Zealand's future workforceTraining New Zealand's workforceEmployment, labour markets and income, and New Zealand, technology and productivity

Our final report presents 35 findings and 18 recommendations.


What's next?

The final report was tabled in Parliament on 11 May 2020. An independent evaluation of the inquiry is now being undertaken to assess the Commission's performance and learn for the future. The results will be published on this website.


Evaluation

An independent evaluation of the inquiry is being undertaken to assess the Commission's performance and learn for the future. This uses three external sources of feedback: an expert review, participant interviews and online survey.