Young tells the Herald, “We’re currently bouncing around the low 20s against 127 countries. We’ve been pretty much stuck there for a while now. We’re not moving up and we’re not moving down.”
The Technology Users Association of New Zealand (Tuanz) boss says we’re falling behind our key trading partners. The report notes surveys that give NZ lower marks for tech adoption than other small countries like Singapore, Denmark and Finland.
Call for national leadership
“Above all, this briefing is a call for collective national leadership,” TechLeaders co-chair Liz Gosling says in the report.
None of the business leaders surveyed called for handouts, but they did want the Government to bolster innovations with policies that made it easier to introduce artificial intelligence and other new tech – in the context that, as the report puts it, “AI is no longer a side experiment or isolated pilot. It is rapidly becoming embedded in enterprise workflows, customer interactions, public services and boardroom decisions”.
The report summarises the business leaders’ wishlist as:
1. The introduction of mandatory, non-negotiable cybersecurity standards
“One of the things the leaders have been talking about is the Government taking a lead. Now they have released their cybersecurity plan,” Young said.
But what our leaders want to see is real consequences when things go wrong.
“So not just a slap on the hand, but something that really encourages them to get things right, which is an interesting thing for them to say,” Young said.
Tuanz chief Craig Young has just completed his annual interviews with NZ tech leaders. Photo / Sylvie Whinray
In Australia, organisations face fines of up to A$50 million for a serious data breach if their defences aren’t up to snuff. (In October last year, Australian Clinical Labs had to pay a A$5.8m fine).
The ManageMyHealth data breach also saw experts point out that while the New Zealand Government has published a solid set of security protocols, including two-factor authentication, they are voluntary, with no repercussions for not following them.
On an everyday level within companies, the leaders said “shadow AI” or people using unsanctioned tools had become a major security issue.
2. Establishment of a national digital clearing house to vet global technology vendors
When a new tech player comes on the scene, or a new product like Anthropic’s Claude Mythos, to take a recent controversial example, Young sees a lot of replicated effort as various public and private organisations assess it – against the backdrop of a skills shortage in AI and other advanced tech areas, according to the survey leaders.
“They’re quite keen for Government to take the lead on a clearing shop, so understanding what some of these large vendors are doing … and if it’s up to standard.”
3. Government-led workforce development programmes to build AI capability
The tech labour market has eased overall, but “organisations are battling a severe shortage of specialised ‘deep tech’ talent, exacerbated by a continuous brain drain to Australia and an AI-driven ‘expertise paradox’,” the report says.
The expertise paradox is where Young’s analysis that we’re “overusing AI in the wrong places” comes in.
Organisations have been favouring senior staff overseeing “automated outputs” over hiring recruits to the workforce.
The report says, “To combat this critical deficit, digital leaders should minimise offshore outsourcing and instead prioritise the recruitment and intensive training of young, local New Zealanders to sustainably rebuild the country’s long-term digital capability.”
In the age of AI, organisations also have to value skills over credentials, the report says. That means a focus on continuous learning.
On the Crown side, “There is an urgent need for government-led workforce development programmes to embed AI literacy in education and stem the ‘brain drain’ of talent to Australia,” the report says.
4. Accelerated progress on a secure national digital identity framework
While the Government fulfilled its promise of releasing a “Govt.nz” app by Christmas last year, it’s essentially a shop window for various existing web-based services.
New features like a digital version of your driver’s licence, or access to medical records (from the public system) are still in the works.
A key element of underpinning technology is missing.
“There is a strong demand for a formalised national digital identity framework,” the report says.
“Leaders argue that a secure, centralised citizen identity service is crucial for building trust, preventing fraud, and driving massive efficiencies across both public and private sector transactions,” the report says.
5. Recognition of data platforms as critical national infrastructure
One executive pointed out “the desperate need to replace localised, disconnected systems with single, unified data platforms – such as a single patient management system for the entire health sector – to truly leverage data for public good”.
As data becomes centralised and algorithms become more autonomous, the concepts of data sovereignty, security, and trust are emerging as critical board-level priorities, the report says.
“Sovereign AI”, or the ability of a nation or entity to control and deploy models using its own localised data and infrastructure, is rapidly becoming a source of geopolitical and competitive advantage.
“By treating data platforms as critical national assets and finalising a secure national digital identity framework, New Zealand can move beyond the current hype and deliver a high-productivity digital future,” the report says.
6. Clean the dirty data
Young says another issue raised by nearly all interviewees was dirty data, or information that’s scattered, inconsistent or otherwise not fit to be chewed over by artificial intelligence.
“If we don’t fix the data, then we won’t get the return from AI we want … AI is everywhere, but trying to get value out of it is really challenging, and that’s why we’ve started with data consolidation,” Freightways chief information officer Matt Cocker said.
What are Young’s hopes in an election year?
The Tuanz boss says, “There are two critical issues: cybersecurity and tech talent. Above all, whether it’s AI or something else, tech leaders want an approach to digitisation from Government that’s election-proof, collaborative and cross-party.”
Constant strategy shifts with successive Governments mean digital leaders have “no idea what the vision is and where it’s going”, Young says.
Postscript: Business leaders’ top AI implementation tips
The Digital Priorities report offers five practical tips, based on its interviews with NZ business leaders and “international governance trends”:
1. Centralised AI governance. Organisations should establish an internal AI clearinghouse or cross-functional council to centrally review, prioritise, and approve all AI requests. This ensures alignment with business goals, manages vendor costs, and mitigates the risks of shadow AI by providing employees with safe, sanctioned alternatives.
2. Securing agentic AI. Organisations must adopt a zero-trust approach to agentic AI. Cyber security architectures should be updated to treat autonomous AI agents as active network users, implementing strict identity verification, least-privilege access, and continuous logging for any tool interacting with corporate systems. High-impact operational technology should remain air-gapped where necessary.
3. Pragmatic AI deployment. Businesses should focus exclusively on hyper-specific, measurable use cases utilising commodity and embedded AI. Rather than investing heavily in custom proprietary models, companies should exhaust the AI capabilities already present in their existing enterprise software suites. By targeting AI at specific, labour-centric bottlenecks, time and cost savings can be directly quantified to prove return on investment.
4. Human-in-the-loop continuous training. Leaders must invest in continuous, human-in-the-loop education programs. Static IT policies are no longer sufficient. Organisations need rolling training initiatives that teach staff how to prompt effectively, recognise AI hallucinations, and maintain critical oversight, ensuring that final decisions affecting customers or core operations are always ratified by a human professional.
Tuanz again collaborated with One NZ on its annual survey.
“The biggest challenge is balancing transformation velocity with operational resilience – a tension that many digital leaders across New Zealand have felt,” the telco’s CIO, Adrian Albuqueque, said.
“We expect transformation to be difficult: modernising core platforms, uplifting cyber maturity, and embedding AI into delivery … It forced us to do sharper prioritisation, accelerated technical debt reduction, and a much stronger focus on measurable outcomes.”
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.