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Kiwi productivity at an all time low... Is technology the answer?

12 Apr 2016

New Zealand is suffering from low productivity, but technology may be a solution, according to Graeme Muller, NZTech chief executive.

Muller says New Zealand is least productive when it comes to services, which accounts for 70% of GDP, and particularly Government services, which accounts for half of all services. Productivity is important as more can be produced with less effort or resources, he says.

ICT is at the heart of a productivity transformation, according to NZTech. Since 2012, better use of technology has delivered a 16% reduction in the reported effort in dealing with Government departments. This is particularly significant for social services, as the vast majority of Government spending is devoted to this area, 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,” says Muller.

NZTech recently met key senior Government officials at a Government Technology Summit in Wellington. Hosted by NZTech, the event involved senior executives and chief information officers from a broad cross section of government agencies and the tech sector. It focused on the topic of transforming Government services to build better outcomes for all New Zealanders, especially those in need. 

“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,” Muller says.

“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% 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,” he says. 

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

Technology is the fastest growing industry in New Zealand and the fourth largest export earner with exports of over $6 billion in 2015. 

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