Published on the 25/06/2024 | Written by Heather Wright
As both countries grapple with productivity and innovation…
Australia has bounded six places up the world competitiveness rankings taking its highest position in 13 years, while New Zealand has slumped down one place – with experts in both countries warning there’s still plenty of work to be done.
The IMD World Competitiveness Yearbook 2024 has Australia rising from 19th place to 13th out of 67– its best standing since 2011.
That’s been aided by stronger business and government investment, a strong labour market and improved technological infrastructure.
“[This] feels like a missed opportunity.”
Australia’s worst result came in poor levels of entrepreneurship, where it ranked just 61 out of 67 nations surveyed. Challenges around internet speeds and economic complexity were flagged in the report.
Melissa Wilson, CEDA senior economist, says Australia’s lack of productivity growth remains a challenge if the country wants to maintain its living standards into the future, and both business and government need to do more to address the issue.
“Along with poor perceptions of the efficiency of our large corporations (52nd) and another fall in workforce productivity in this survey (48th), this report also highlights the important role that Australian businesses have to play in driving national competitiveness and productivity,” Wilson says.
Australia’s ranking for use of digital tools and technologies also ranked relatively low, at 37, prompting Wilson to urge more to be done to adapt to the growth of AI to ensure Australia isn’t left behind.
Newly released ABS data also notes declining business innovation for Australia. The data, from 2021-23, has innovation dropping six percentage points, with 19 percent of Australian businesses reporting that a lack of access to funds was a key impediment.
The lack of skilled workers available in the labour market (16 percent) and a lack of skilled staff within the business (14 percent), were also barriers to innovation, along with the cost of development or introduction/implementation (13 percent).
Government regulations and compliance and lack of access to knowledge or technology to enable innovation were also among the barriers highlighted.
Across the Tasman, New Zealand dropped back to 32nd position in the IMD rankings, well down on the 20th placing of 2021. The country dropped to 31 the following year.
This year’s results show declining fortunes across many performance indicators, though economic performance and government efficiency showed improvements.
New Zealand’s low productivity and a need for greater digitisation were flagged in the report, along with low business and consumer confidence, inflation and recession concerns and an ‘uncertain and troubling international trade and geopolitical picture for a small export-dependent nation’.
New Zealand’s decline in the IMD rankings tallies with other reports, including the Portulans Network Readiness Index, which evaluates countries based on technology, people, governance and impact, and which saw the country fall four positions from 19 to 23 in 2023.
The fourth annual Tuanz Aotearoa’s Digital Priorities in 2024 report, also urges action to combat the declining digital competitiveness and highlights a need to become more competitive in areas including high- and medium-high-tech manufacturing, cybersecurity, robotics, skills, and regulations – which it says needs ‘immediate attention’.
The Tuanz report is based on interviews with 36 Kiwi tech leaders. When asked how advanced they believe New Zealand is in adoption of new technologies, their responses were lower than last year – a continuation of a trend seen over the past four years – with a clearer perception that New Zealand may have stalled or lagged behind countries it often benchmarks itself against.
Craig Young, TUANZ chief executive officer, says the rise of AI alongside strengthening cybersecurity and digital equity were some of the key themes outlined by tech leaders.
He says the last few years have seen digital leaders trying to balance technological evolution with supporting business as usual.
For many digital leaders, heavy investment in technology and related services has become the status quo in their organisation, the report notes. Others, however, expect the balance to shift from new projects and initiatives to operational expenses, especially as costs go up due to inflation. Those looking to invest more in new and emerging technologies say they expect a greater focus on time-to-value.
“In order to stay ahead of the curve, Aotearoa New Zealand’s business and technology leaders need to be flexible, adaptable and resilient to unexpected challenges and disruptions,” Young says.
“To do this, we require innovative thinking, in partnership with government, to create an environment that supports the progressive regulation of emerging tech and data privacy, particularly as AI is fast-approaching and is likely to impact jobs across the motu.”
Young called out the lack of tech focus in the recent New Zealand Budget, saying it was ‘particularly lacking’.
“[This] feels like a missed opportunity as New Zealand looks to improve lagging productivity through high-tech solutions.”
Tristan Ilich, Tuanz chair, says despite the challenges digital leaders face, investment in technology and digital services remains strong.
“This investment in technology and digital skills needs to translate into increased productivity and it also needs to be matched and supported by the government despite the current economic challenges,” Ilich says.
“Investment in technology and digital skills training must remain a key government priority to ensure Kiwis remain at the forefront of this new frontier.”
Singapore reclaimed the top ranking in the IMD World Competitiveness, followed by Switzerland, with Denmark rounding out the top three.
