Watch and prepare to adopt new technologies - Productivity Commission
By Gavin Evans
Sept. 12 (BusinessDesk) - New Zealand should monitor the impact of new technologies on labour markets internationally
while looking for ways to improve our capacity to take them up and adapt to any changes that result, the Productivity
While some forecasters are predicting deep jobs losses in some sectors from the take up of artificial intelligence and
other forms of automation, the commission says the rate of uptake of technology internationally appears to be slowing
rather than accelerating.
And while new technologies can have impacts on particular professions or industries, “there is little evidence that new
or previous technologies are strongly labour-replacing in aggregate,” the commission says in the first of four reports
on evolving technologies and their potential impact on New Zealand.
“If the rate of technological change was accelerating, you’d expect to see evidence in the official statistics, such as
faster productivity growth, more business start-ups, and more jobs being created and destroyed. But what we see in New
Zealand and across the developed world is the opposite,” says Judy Kavanagh, who is leading the commission’s inquiry
into technology and productivity.
“Rates of job destruction have actually declined in New Zealand since 2000. And recent rates of job creation are at a
similar level to rates in the early 2000s.”
The government in February tasked the commission with assessing the impact of potentially disruptive new technologies on
the work force, labour markets, productivity and well-being. It also sought advice on the best ways to manage those
risks, while optimising the potential benefits that would also flow from the technology.
Today’s report looks at New Zealand’s use of technology and its relationship with technology. The next three reports
will cover: employment, labour markets and incomes; education and skills; and ways to prepare the country for the
future. The commission will lodge its final report in March.
The commission says the nature of work will change during the next 10-15 years, but the rate of that change is unlikely
to be unprecedented.
The prospect of dramatic improvements in the ability of artificial intelligence to drive large-scale displacement should
not be discounted and the government should be monitoring international developments to identify any divergence from
While the local labour-market impacts are likely to lag, and be more muted than those overseas, “that comes with a
warning that faster adoption of technology overseas could see New Zealand fall behind, with consequences for jobs and
Kavanagh says technology adoption supports higher productivity growth and higher incomes and provides resources to pay
for the things New Zealanders value.
She says the main problem facing New Zealand isn’t too much technology, but not enough.
The commission said its preliminary observations are that maximising mobility, resilience and employment opportunities
will allow faster and smoother adjustment to change.
The education and training system can be improved to better enable existing and future workers adapt to technological
change and it warned that trying to regulate for specific technology can quickly become obsolete and delay or prevent
Protecting declining industries or artificially inflating new ones can delay, magnify or create future adjustment costs.
“Turning away from technological change or attempting to tightly control its entry and diffusion offers at best
temporary relief. Previous attempts to insulate New Zealand from economic and technological change were not successful
and created large and painful adjustment costs,” the commission says in its 92-page report.
“By failing to pick up and spread the world’s best technologies, New Zealand has lost opportunities to gain higher
living standards. The path to greater well-being lies with more technology adoption and diffusion.”
Submissions on today's report and the next three close on Jan. 20.