Deloitte and 2degrees study: By Andrew Fairgray, Chief Business Officer, 2degrees.
A new report commissioned by 2degrees and prepared by Deloitte Access Economics finds New Zealand’s productivity is lagging and suggests the country must embrace an innovative mindset and accelerate the adoption of existing technologies to remain competitive.
2degrees commissioned the report to help foster conversations about increasing productivity across NZ Inc – and driving better results for the future.
The 2degrees team is at the coal face talking to Kiwi businesses every day. They know they need to increase technology adoption, but face barriers such as skills shortages, short-term risk aversion, limited collaboration with technology partners, and the regulatory environment.
As a nation, we need a roadmap to increased technology adoption, and this in turn will lead to a more productive and prosperous society.
We launched the study at Deloitte’s office in late March, and Liza Van der Merwe, Deloitte Access Economics Lead Partner, Deloitte New Zealand, noted that the need for a productivity uplift is greater now than ever given New Zealand currently ranks 63rd out of 67 OECD countries in terms of productivity and efficiency.
She told the audience that increases in technology adoption and innovation are key to lifting productivity and our modelling shows the economic benefits of doing so are huge.
The study reveals that New Zealand is currently spending an average of 1.4% of GDP on R&D, well below the OECD median of 2.7%, and we currently face relatively low rates of technology adoption due to several barriers.
The report, which is available here, finds lifting R&D to 2.5% of GDP by 2035 and tripling the adoption rate of new technologies would provide $46 billion in incremental benefit to the New Zealand economy in 2035. However, those benefits are not guaranteed, which is why this report also outlines what needs to happen to turn those potential gains into a reality.
The report suggests a four-point pathway forward.
Firstly, ensuring R&D tax credits are fit-for-purpose. Secondly, addressing the barriers to scaling start-ups through a range of ways, including access to capital as well as policy and regulatory changes that will increase domestic demand generation for start-ups.
Next, it recommends that innovation funding gaps are addressed.
Finally, it suggests we encourage firms to self-monitor and improve productivity, noting: “Many firms in New Zealand lack the tools and incentives to effectively monitor and improve their productivity, particularly in terms of integrating new technologies and tools in their operations.
“To improve productivity, we need to encourage firms to adopt self-monitoring frameworks that help businesses to assess and improve their digital capabilities.”
This is the first report in the Productivity Propelled series, which will see Deloitte Access Economics and 2degrees investigate a range of issues, in their shared bid to help NZ Inc become more productive.
At 2degrees we are working hard to play our part, providing Kiwi businesses large and small with technology to help drive their productivity on a day-to-day basis.
2degrees Flex is a proprietary, custom-built portal that makes managing large fleets of mobiles, multiple fibre connections, and other telco building blocks quick and easy.
As communications become ever more technology driven, decentralised and cloud focused, the businesses striding ahead are the ones who best manage their portfolio of services. 2degrees Flex is self-service portal, capable of delivering real-time service analysis and management.
It offers real-time service activation, detailed billing and powerful end user management tools.
The portal has been developed by 2degrees’ team of more than 400 software and IT professionals, and it is, quite frankly, our secret sauce.
Every business customer of 2degrees can take advantage of 2degrees Flex – saving time and money, and allowing them to focus valuable resource on their core business.
New starter joining on Monday? You can log in and order a new phone, port an existing number, and have that staff member ready to go from day one.
A staff member needs more data to complete an important job off-site – you can dial up data in an instant.
2degrees Flex is just one example of how technology can drive productivity. We know Kiwi business leaders are time poor. I encourage you to find the right partners with the right productivity tools for your business.
At 2degrees we are proud to support a range of initiatives designed to bolster NZ productivity. There are more to come, including 2025’s Shaping Business Study – the sixth release of a longitudinal research project that investigates the mood of the business landscape, and areas for improvement.
I firmly believe we are close to a tipping point, where our can-do attitude and technology adoption combine, and will drive sustained productivity growth and ensure a prosperous future for New Zealand.
To learn more, visit 2degrees.nz/business/insights
