My recent trip to the United States reminded me that Kiwi start-up founders have a massive opportunity to connect to the grand scale of the US capital markets and that our lean DNA enables us to tackle issues around AI with true lateral thinking.
AI is predicted to contribute $15.7 trillion to the global economy by 2030, with a focus on automation, healthcare, and education. [1] New Zealand has the opportunity of the century to use AI to overcome the perennial productivity problem caused by our size and distance, low risk tolerance, and difficulty playing a global game.
To do so, we need to decide that AI is part of our economic and social enterprise – just as we did with powerful inflexion points such as the advent of electricity, industrial, software, cloud computing, and mobile. We are now in the brand-new era of AI, and the shift in how societies will function with AI offers New Zealand a wonderful opportunity.
Here is what Kiwis must know:
1. To extract maximum value from AI we must understand it is a prediction machine. The volume and quality of the predictions AI can make are about to become much cheaper. What becomes expensive is the final decision that needs to be made after all the analysis. In an AI-driven economic model, there will be a huge strain at the point where a few people are required to sign off.
In sectors that pain point is already being addressed, Salesforce's AgentForce is a suite of AI agents that are different from traditional chatbots in that they operate autonomously, "analysing data, making decisions, and executing actions without human intervention" in real time.
In the health system, AI can make diagnoses and propose treatment protocols, with medical practitioners signing off on the final decision. It changes the medical field as we know it.
2. The predictive abilities of AI are what make it so powerful – in the next five to 10 years, probably, Amazon will drop the item you need at your doorstep unasked because the model shows a 95% likelihood that you were about to place an order, and it can easily absorb the loss otherwise.
In the same way, future health conditions are going to be more diagnosable before they happen, which can help our health system plan ahead with infrastructure, staffing, training, and investment.
Kiwis have world-leading form in this area: as Emirates Team New Zealand prepared for what would be a triumphant 2021 race, the designers overcame the main bottleneck to innovation – human sailors – by teaching an AI programme to sail.
The model could run thousands of simulations in a short time, and in eight weeks it was defeating the sailors in the simulator. As an HBR report describes, "The AI began teaching the human sailors new tricks," try different racing tactics, figure out superior solutions for the sailors to copy on the water, and experiment with multiple variations of the same boat simultaneously, around the clock, to build a system of decision-making. [2]
This kind of system can be used in hospitals, universities, corporates, not-for-profits, sports teams – anywhere humans are gathering data, solving problems, and working towards goals.
3. The important part is the feedback loop. After an action is taken, the model can learn what went right or wrong and deliver even better insights to improve itself.
New Zealand is in a good position to apply this in key areas such as housing – to predict demand, optimise construction processes, and identify ideal locations for new developments, informing better planning and resource allocation – and skilled labour and immigration, using the model to identify current gaps and predict future skill shortages to help governments created targeted immigration policies. AI could significantly enhance important sectors such as agriculture and education, boosting sector productivity by 15% to 25% in the next two decades.
4. For a small market like New Zealand, protecting IP is less important than finding long-term global partnerships. The objective is to create our pure 'special sauce' that cannot be replicated without all the same data – which, in terms of protecting national economies and developing national USPs in different capabilities, is essential to being globally competitive in the information age.
Other major economies are investing heavily: the US is ahead in adopting AI because it's a financial innovation hub; India and China are ahead. Singapore is a global leader in AI research and technology, and the Ministry of Communications and Information is driving initiatives and funding to uplift Singapore's economic potential through AI.
5. Renewable energy will be one of the most in-demand commodities globally. The push toward decarbonisation has created unprecedented demand for renewable energy, and this trend is only accelerating as industries transition to sustainable energy sources. AI data centres, chip manufacturing, and other high-tech sectors are among the biggest future consumers of renewable energy. AI data centres alone are projected to use up to 8% of the world's electricity by 2030.
New Zealand has an incredible opportunity to lead here. With our access to geothermal, wind, and solar resources, opportunity to investigate fusion could provide not just for domestic demand but also establish us as a key energy exporter, especially in powering AI and chip production sectors.
By rapidly scaling up investment in renewables, New Zealand can fortify economic gain and productivity while becoming a key player in the global energy transition and offering a competitive edge in AI and high-tech industries reliant on renewable energy.
AI is underpinning brand-new tools for the world around education, healthcare, and housing. An emergent wave of software entrepreneurs may make life better for human populations. It's a lucky break; AI provides the opportunity. Whether you are a CEO or government minister, what counts is whether you understand your market and can get the data. The next three years will reveal who seized the opportunity today.
