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Griffin on Tech: We are in danger of becoming a digital laggard

Peter Griffin, Editor. 10 September 2021, 3:49 pm

A new report measuring 137 countries on their "digital competitiveness" sees New Zealand falling significantly.

The Digital Riser Report 2021 from the European Centre for Digital Competitiveness is a useful snapshot taken every three years of countries' progress in progressing digital infrastructure and policies.

New Zealand has dropped 70 points in the latest report, seeing us trailing the pack in our cohort of East Asian and Pacific nations, which is led by Vietnam, Cambodia and rising digital powerhouse China. The Digital Riser report draws on data from the Global Competitiveness Report from the World Economic Forum as well as world Bank and International Telecommunications Union metrics.

But it has a particular focus in two areas when it comes to digital - our ecosystem and our mindset. It measures things like venture capital availability, the skillset of graduates as well as the diversity of our workforce, attitudes towards entrepreneurial risk and our levels of mobile broadband subscriptions.

It's a slightly odd methodology, but the report confirms what I'm hearing around the tech sector locally. We've done well to navigate the impacts of Covid, our digital businesses are innovating and attracting investment. But there's a sense that we are lacking direction in our efforts in the digital space as a nation, while other countries have a laser focus on making it central to their economy.

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Over ten years ago we made some big policy decisions as a nation to boost our digital capabilities - the investment in the ultrafast broadband network and the setting up of Callaghan Innovation to foster an innovation ecosystem. Both have proven to be worthwhile investments.

But we've taken our foot off the gas in recent years just as other, in many cases developing nations, are getting more ambitious. For instance, the China 2025 initiative provides state funding for 10 key sectors in which it aims to become a world leader. China is determined to lead the world in disruptive technologies such as artificial intelligence, digital currencies and digital education. Vietnam wants its digital economy to account for 30% of GDP by 2030. 

Ambition is one thing, by the report also accounts for the resources countries are investing to realise it. For instance, Canada, which is one of the top "Digital Risers" worldwide climbs the rankings largely on the back of the success of its Strategic Innovation Fund, which was set up in 2017. According to Digital Riser, it "created and maintained more than 70,000 jobs and

leveraged a total investment of over US$45 billion by 2021". It has put US$1.2 billion into "innovation superclusters to accelerate business-driven innovation," according to the report.

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Falling behind - our digital competitiveness trails other countries in the region.

We are not performing well compared to other countries in the digital skills space either, according to NZTech's CEO Graeme Muller.

"Since 2018, New Zealand's digital competitiveness has gone backwards due to issues with the ability to hire foreign labour and the lack of graduates with digital tech skills, New Zealand is not adapting fast enough," Muller wrote this week.

"Productivity will get worse, not better, income taxes will decrease as high paid roles continue to be shifted out of New Zealand, the algorithms that govern many aspects of our lives will lack cultural relevance and ultimately life will get harder for many more people as the years go on," he added.

That all sounds a bit dramatic. But the point is that we are in a competitive race - for talent, for investment, for business. The Digital Riser report shows that other countries are hungrier than us and we may miss out as a result.

There are initiatives underway that will help get our collective act together. The Digital Industry Transformation Plan is being worked through and when completed will form the closest thing we have to a digital strategy. But it will also need to be backed up with investment and, where necessary, policy changes. 

We've got so much going for us here and the pandemic has served to advertise our best attributes to the world. But the next three years will be pivotal in a world where business as usual is not going to cut it anymore. We need to be a digital riser, not a laggard.


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