NZ businesses eager to invest in robotics and automation

19 October, 2016

New Zealand businesses eager to invest in robotics and automation
Administrative processes and red tape proving a challenge

Four in 10 New Zealand firms say they are interested in investing in robotic processes and automation within the next 12 months, as the so-called fourth industrial revolution continues to gather pace. In contrast, a smaller 36.7% said the same in the equivalent research conducted in Australia.

Businesses across the country indicated they want to learn more about the benefits of drone technology, artificial intelligence (AI), big data, product assembly and services automation, as captured in the latest round of the Alleasing New Zealand Equipment Demand Index (the Index).

Planned investment in robotic processes
One quarter of businesses surveyed said they would consider investing in product assembly and service automation. This emerged as a key investment priority for New Zealand firms, likely given the associated productivity enhancements and reduced labour input costs, particularly in sectors such as manufacturing, construction and retail where repetitive tasks are common. Big data and AI are also attractive for businesses (21.9% and 10.8% respectively).

On a location basis, minimal difference exists. Forty four per cent of firms based in Auckland are interested in robotics or automation – this compares to 41.4% in Wellington and 44.3% of companies based throughout the rest of the country.

Alleasing Chief Executive Officer, Daniel Blizzard, said the early interest in automation and digital integration will give New Zealand firms a future advantage over their Australian neighbours. More than half of businesses located across the Tasman indicated they have not considered investing in such technologies.

“The Index data shows New Zealand firms have a clear appetite for learning more about the next wave of digitisation and automation, and indeed making the decision to invest in it. Although corporate adoption of these technologies is still in its infancy in New Zealand, the Index data is very promising and suggests firms are already thinking of the major cost, productivity and control benefits on offer, as described by the likes of Accenture[1].”

Administrative processes having the most negative impactAnother area of focus for the Index this round was to understand whether time consuming administrative processes are negatively impacting capital equipment acquisition programs.

When asked which administrative process has the most negative impact on their asset acquisition program, more than a third (44.3%) of New Zealand businesses reported tax compliance. Issues under the tax compliance umbrella, which were specifically classified as barriers to growth, include the ever changing tax framework and the corporate tax rate. Examining the data further, little variance exists by business size or location, which suggests tax compliance is a universal concern for New Zealand firms and changes are required to improve underlying business confidence and capital expenditure.

“To achieve revenue growth, maximise productivity and adequately prepare for the future, New Zealand businesses need to become increasingly focused on maximising their capital structure.

“In addition to this, businesses are suggesting that they want more from the New Zealand government in terms of finding ways to encourage investment and improve productivity,” Mr Blizzard finished.

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