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Why we need more tech: the COVID-19 edition

Principal Advisor, Productivity Commission
29 May 2020

One of the key findings from the Commission’s recent Technological change and the future of work inquiry was that, far from being a threat, technology has many benefits for work and employment. If we want to see more productivity, better jobs and faster income growth, New Zealand will need more technology not less. The COVID-19 pandemic has demonstrated just how important technology is at helping to reduce the spread of the virus whilst helping businesses stay open.

Some of the jurisdictions that have been most successful at containing COVID-19 are in Asia and have done so with the fast and focused use of technology. A recent report from McKinsey illustrates some of the ways in which technology supported these countries’ pandemic responses.

McKinsey report on technology

New Zealanders like to think of themselves as fast adopters of technology, although there isn’t much reliable data to back up this belief. We certainly have some innovative and fast-growing technology companies, and large international technology companies have, from time to time, viewed New Zealand as a good place to trial new projects and products.

But earlier work by the Commission (in partnership with the Australian Productivity Commission) found that New Zealanders were not amongst the highest internet users nor online purchasers in the OECD and that only around half of New Zealand firms used the internet to receive orders. Government research has reached similar conclusions. During the lockdown, many New Zealand firms struggled to establish or scale up processes for selling goods online and delivering them in a timely manner.

All of which begs the question: what can we do to encourage more and faster technology adoption? The Government announced a number of initiatives in Budget 2020 that could encourage greater uptake by some firms. And if many New Zealanders decide that they prefer online shopping to face-to-face retail, then firms will be pulled by consumer demand into digitising the ordering, management and delivery of their goods and services.

Changing regulatory settings is another place where there are opportunities to encourage faster technology adoption. Accelerating progress on open banking and consumer data right policies could bring greater domestic competition to concentrated sectors and create openings for new services and firms.

But what about government itself? A finding of the Commission’s work with the Australian Productivity Commission is that the Australian and New Zealand governments are yet to realise the full potential of data and digital technologies for the delivery of public services.

One area where much progress had been made on both sides of the Tasman is in processing Australian and New Zealand travellers at the border. Hopefully, trans-Tasman travel will be possible again soon but New Zealand may have missed a trick with its COVID tracing app as it cannot be used in Australia and the Australian app can’t be used here. A compatible app could have not only met its primary purpose of speeding up contact tracing but been instrumental in the recovery of the tourism industry too.

Some have also questioned the design and roll-out of the Government tracing app, pointing out that its requirement for people and businesses to register may discourage uptake and that slowness in getting it out has led to a proliferation of other, competing apps getting in first – which may lead to confusion and hassle.

It seems there is still much for us to learn about the efficient and effective use of digital technology for business and for health.

Technology has played a crucial role during the COVID-19 pandemic. Let’s harness the progress made and lessons learnt to encourage the acceleration of technology adoption and make a long-lasting impact beyond COVID-19.

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