Minister of Science, Innovation and Technology Shane Reti. Photos / Getty Images, RNZ
New Zealand is no longer the only country in the OECD yet to publish an artificial intelligence strategy.
But the document released by Minister of Science, Innovation and Technology Shane Reti late yesterday, promoting a “light touch” regulatory environment to promote investment and adoption, has drawn a mixed response.
“AI [artificial intelligence] could add $76 billion to our GDP by 2038, but we’re falling behind other small, advanced economies on AI-readiness and many businesses are still not planning for the technology,” Reti said, quoting research commissioned by Microsoft.
Uptake was especially low among small to medium businesses, Reti said, with 68% having no plans to evaluate or invest in artificial intelligence, according to a Spark New Zealand survey.
How far did Reti’s strategy document go in outlining solutions?
“It doesn’t contain any timelines or deliverables and there’s no new money but it’s a good first step; a good conversation starter,” AI Forum New Zealand executive director Madeline Newman told the Herald.
Auckland Business Chamber chief executive Simon Bridges said the strategy gives businesses the clarity and confidence they need to invest in AI.
“This removes unintended barriers and clears up uncertainty.
“Whether you’re a manufacturer in Onehunga or a tech start-up in Takapuna, it’s about enabling real productivity gains.”
The strategy document reaffirms the stance first outlined by Reti’s portfolio predecessor, Judith Collins, that there will be no new regulation or laws, such as the EU’s AI Act to address artificial intelligence.
The Government will use existing legislation and regulations such as privacy, consumer protection and human rights, to manage risk and privacy concerns, Reti said.
Businesses can now invest with confidence, knowing that no red tape is on the way, he said.
Bridges said related policy moves, such as making it easier for skilled IT workers to get a visa, would also boost the local AI scene.
“This feels really insubstantial considering the amount of time it’s taken the Government to finally deliver a position on. Some of us have been talking about a national AI strategy since 2018,” said Ben Reid, the founding executive director of the AI Forum NZ and who now runs his own emerging technologies consultancy, Memia.
“Taking a read through the lightweight 20-page document, I’m not so sure it’s a strategy as much as a ‘vibe’,” Reid said.
“The advocated ‘light touch’ approach is almost completely hands off: I couldn’t find any tangible targets, actions or commitments to accountability, just sweeping generalisations and a few rapidly-ageing case studies.
“As such, it feels very insubstantial and behind the times on how quickly AI technology is advancing internationally.”
Reid said it wasn’t clear how open-source or local AI development would be fostered.
“I caution that a strategy of encouraging New Zealand’s domestic businesses - tourism, agriculture and education are mentioned in particular - to exclusively adopt overseas commercial AI services isn’t ‘investment’ - it’s growing consumption,” Reid sad.
“My concern is that without also investing in broader technological development capabilities, the strategy risks hollowing out NZ’s technical capabilities even more than already and making our domestic industries subject to increased rent-taking by Big Tech. GDP may rise but NZ’s share of the dividends won’t.”
The strategy document identifies a “skills gap” as one of the barriers to broader AI adoption in New Zealand. It says the Government has already focused more of the education budget on stem (science, technology, education and maths projects), which is helping universities boost their AI efforts.
It also notes that big tech firms are offering free online AI tutorials.
In Microsoft and Amazon’s case, it’s in part to fulfil pledges when they had approval fast-tracked for giant “hyperscale data centres” – now also described as “AI factories” – in northwest Auckland under the previous Government.
Reid said: “The ‘light touch’ approach doesn’t compare favourably with the more interventionist approaches of countries like Singapore, Australia, Finland and the UK which are actively investing billions of dollars into AI initiatives.
“Fundamentally, state investment builds skills and capability which are in extremely short supply in Aotearoa right now.”
“Kiwi businesses wanting to license their AI products overseas will face a huge uphill compliance battle when faced with demanding AI laws in other countries,” said intellectual property lawyer turned Simply Privacy principal and NZ AI Forum executive council member Frith Tweedie.
“A light-touch regulatory approach might work for NZ-only businesses, but it puts those with international aspirations at a disadvantage.”
The strategy document says lack of knowledge and misunderstandings about AI are reasons behind relatively few businesses adopting AI – especially smaller companies. It quotes research saying only 68% of small-to-medium businesses have plans to evaluate or invest in AI.
Its response is an AI guidance document for businesses (read it here), put together by the Ministry for Business, Innovation and Employment (MBIE).
“The Responsible AI Guidance for Business may be a helpful starting point for some businesses. But providing various ‘tips’ is unlikely to be sufficient to mitigate the various potential risks and truly build trust in the use of AI,” Tweedie said.
“Strangely, privacy is treated like a bit of a poor cousin in the Responsible AI Guidance for Business. There’s an awful lot more to privacy than appointing a Privacy Office and the guidance underplays the extent of privacy risk and the importance of good privacy practices.”
Reti’s strategy document emphasises that New Zealand is a signatory to the OECD AI Principles as the foundational international framework for AI governance.
These principles, agreed by 42 countries, provide comprehensive guidance for responsible AI development and deployment.
“The OECD AI Principles are high-level principles and nothing more,” Tweedie said.
“They definitely do not go anywhere near providing ‘comprehensive guidance for responsible AI development and deployment’, other than setting a vague north star - and one that’s not even tailored for New Zealand.”
“It has taken a while and has no doubt been quite challenging to pull together given the current economic climate,” NZTech chief executive and AI Forum executive council member Graeme Muller said.
“This backdrop has resulted in a strategy that is more adoption-focused than investment-focused.
“However, it will be the use of AI, in a safe way, that has the potential to improve productivity across most parts of the economy.
“I am looking forward to seeing how the Government itself puts this plan into action.”
Muller added: “You can’t design a strategy for such a fast-moving technology and think the job is done. So NZTech, the AI Forum and other industry groups will continue to work with the Government and industry to ensure the strategy keeps adapting, and to translate the bigger picture stuff into real economic growth and jobs.”
Newman said the AI Forum missed working with Callaghan Innovation but was looking forward to learning more about the Government’s planned Advanced Technologies public research organisation, which will include AI as one of its primary points of focus.
Callaghan Innovation was the early vehicle for the current Government’s modest AI initiatives, including the limited-release GovtGPT chatbot and collating AI resources and advice into one place.
Reti said earlier that Callaghan had grown unwieldy with conflicting functions.
Some of the agency’s functions have been transferred to MBIE or the restructured Crown Research Institutes. Others, like the “Grow” programme to help start-ups commercialise, have been cut.
The Public Service Association said there was a brain-drain risk with Callaghan Innovation researchers laid off earlier this year and the new Advanced Technologies PRO still in the works.
The Government says enabling legislation for the PRO will be introduced in the final quarter of this year, and that it will be established during 2026.
There was more union criticism of the Government’s strategy overnight, with the Council of Trade Unions (CTU) saying “workers are absent” from Reti’s document.
It did not address the risks of workers being displaced by AI as it, in the union’s view, “replicates the corporate hype of Microsoft and other tech giants”.
Ironically, research released by Microsoft NZ earlier this month was critical of New Zealand’s failure to match Government spending to support business and schools’ AI adoption in similarly-sized countries like Estonia, Singapore and Finland.
The Microsoft-commissioned report also called for more focus on expanding renewable energy for power-hungry AI – a topic not mentioned in Reti’s AI strategy document.
“The strategy also skates over the very real risks that AI technologies pose for workers. This includes the severe health and safety risks associated with AI surveillance systems, productivity monitoring, and automated management,” the CTU said.
Victoria University senior lecturer in AI, Andrew Lensen, said: “This AI Strategy sets a dangerous path forward for New Zealand, with an attitude of economic growth above social good.”
He criticised the strategy for making no mention of the Treaty of Waitangi and not being New Zealand-specific enough overall.
“Consider, for example, a healthcare AI system sourced from the US – how can there be no guidance in the AI Strategy about the need to validate and refine such systems for the unique demographics of our society?” Lensen said.
Lensen earlier told the Herald he wants the Government to carry out a comprehensive survey on AI’s impact on New Zealand’s workforce, so it can assess which industries are being most affected and how.
Microsoft’s report also said, “New Zealand currently lags peers, especially in digital skills, AI start-ups, and venture capital investment.”
Reti’s strategy document did not address venture capital, but the Government recently topped up the Crown-backed Elevate fund, which invests in early stage firms, with a further $100 million.
“The strategy document highlights some of the excellent initiatives MBIE are driving, like investing in AI skills and capability training and publishing clear guidelines around responsible AI use and ethical frameworks,” NewZealand.AI founder Justin Flitter said.
“It provides no specific, measurable goals beyond adding ‘$76 billion to the New Zealand economy by 2038′.
“There are no targets for adoption rates, productivity gains, or sector-specific outcomes.
“What I’d like to have seen is a clear vision of the impact and opportunity for AI in Aotearoa.”
Read the full strategy document here.
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.
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