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NZ firms way behind adopting digital technologies

New Zealand businesses are being "left behind at a rate of knots" as their global competitors swiftly adopt artificial intelligence and robotics technology, says the chief executive of Callaghan Innovation, Victoria Crone.

Speaking ahead of the launch today of a discussion paper on innovation through AI, Crone said she was "seriously concerned" by evidence that many New Zealand businesses were "pretending this isn't happening", with aging ownership of small and privately held New Zealand businesses contributing to the problem.

She cited a recent CPA Australia survey of small and medium-sized enterprises (SMEs) in the Asia-Pacific region, which found New Zealand firms lagged the region for adoption of new digital technologies, while at the same time being more satisfied with their businesses than their peers in Southeast Asia and China.

"While there are some strengths from an aging population, what the CPA survey shows is that it’s younger people and business owners who get and are driving this," said Crone. "Too many business owners have their heads in the sand; are too comfortable.

She says far too few NZ businesses understand about big data and robotics and, like many other countries, there was a limited pool of expertise to help accelerate its uptake, despite plenty of evidence that "we’re going to see major impact from AI in our economy, businesses and jobs in the next decade".

In the discussion paper, titled "Thinking Ahead: Innovation Through Artificial Intelligence", Crone says "we are observing the need for a far more aggressive uptake of AI", and lays out a roadmap for its likely adoption across the agriculture, digital, energy and health sectors over the next 8-10 years.

The research suggests that these industries are experiencing only low or medium impacts from emerging technologies, with their use limited to areas like simple task automation, speech recognition control devices, predictive maintenance, and recommender systems.

However, over the next 2-8 years, high impact technologies are forecast to emerge in areas including animal health monitoring, surgery by autonomous robots, predictive personalised health, energy demand reduction, and autonomous cars and shipping.

"We hope this report will play a role in jolting businesses into action," Crone says.

The report showcases a $2 million joint venture between law firm Minter Ellison Rudd Watts and AI firm Goat Ventures to apply AI to legal services.

"The combination of AI systems and human judgement produces a previously undreamt-of capability that enables companies and industries to evolve in faster and more dynamic ways," writes Goat's chief executive, Shaveer Mirpuri. "In New Zealand, perhaps our biggest strength is our democratised landscape, which makes it easy for corporates, innovators, academics, and funders to join forces and collaborate on AI ventures. "This type of cooperation is rare in larger markets so New Zealand should take advantage of the opportunity it offers," he says.

Crone told BusinessDesk that New Zealand industries could expect to face competition from major investors who are already active in AI.

"In agriculture, what worries me is he new investors coming at us," she says. "(Bill) Gates, (Richard) Branson and others - they're passionate about this, they know how to apply these technologies to their own industries, and I’d back them to apply them in others."

As the government agency responsible for helping to accelerate the commercialisation of innovation, Callaghan was seeing an increase in grant applications for research and development involving AI and robotics, but "too many NZ businesses aren’t even using currently available technology, let alone using new ones", she says.

"We are being left behind at a rate of knots."

The paper suggests there will be an "extreme impact in agriculture, with many tasks able to be automated and optimised" over the next two to five years, with energy, cost and input savings and potential to improve environmental impacts in areas such as water and pesticide use, and animal welfare and harvest estimation.

"Far more aggressive application and uptake right across the value chain is required if we want to sustain and advance leadership in this space," the paper says.

In digital sector businesses, owners should already be "well down the track" of using such technologies, while the energy sector was ripe for a "bold approach" to adoption of personalised energy management systems.

In the health sector, the paper says "AI-optimised personalised medicine will be held back (for 5-7 years) by the fundamental 'ambulance at the bottom of the cliff' structure of the health system... This is a global challenge, but New Zealand can lead the way by turning that model on its head."

(BusinessDesk receives assistance from Callaghan Innovation to cover the commercialisation of innovation.)

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