Addressing barriers to AI uptake in New Zealand
Understanding and overcoming the obstacles preventing broader AI adoption is essential for unlocking the benefits that AI offers. Research and stakeholder consultation have identified several interconnected barriers for which the Government is delivering a coordinated response.
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Regulatory uncertainty
Some businesses perceive uncertainty about how existing laws apply to AI applications and what additional compliance requirements may emerge. These businesses may adopt a cautious approach to AI implementation until regulatory clarity improves.
Action: Commitment to stable and enabling policy
New Zealand is taking a light-touch and principles-based approach to AI policy. New Zealand has existing regulatory frameworks (for example, privacy, consumer protection, human rights) which are largely principles-based and technology-neutral. These frameworks can be updated as and when needed to enable AI innovation, and to address new risks and unintended interactions with legislation. This agile approach gives clarity to businesses whilst ensuring New Zealand can respond to new technological developments.
New Zealand is a signatory to the OECD AI Principles as the foundational international framework for AI governance. These principles, agreed by 42 countries, provide comprehensive guidance for responsible AI development and deployment.
OECD AI policy recommendations
- Investing in AI research and development
- Fostering an inclusive AI-enabling ecosystem
- Shaping an enabling interoperable governance and policy environment for AI
- Building human capacity and preparing for labour market transformation
- International co-operation for trustworthy AI
OECD AI Values-based Principles
- Inclusive growth, sustainable development and well-being
- Human rights and democratic values, including fairness and privacy
- Transparency and explainability
- Robustness, security and safety
- Accountability
The adoption of these principles does not require additional regulatory overlay beyond existing law. Instead, it provides guidance for how existing legal frameworks should apply to AI applications.
Perceived complexity, ethics, and risk
Businesses have raised concerns about AI technical complexity and perceive a need for AI expertise that they do not currently have. Others express concerns about privacy, security, and ethical implications of AI adoption (Datacom, 2024). Privacy concerns particularly affect businesses handling sensitive customer information, whilst security concerns focus on both data protection and the integrity of AI-driven business processes. Ethical considerations include ensuring AI systems do not perpetuate or amplify existing biases and maintaining human oversight of critical decisions.
Action: Government support to demystify AI for business
As a companion document to this Strategy, the Ministry of Business, Innovation and Employment has published Responsible AI Guidance for Businesses. This guidance provides advice for implementing AI whilst managing risks and meeting regulatory obligations. This guidance covers a range of AI considerations, including cybersecurity, privacy, and intellectual property that businesses can integrate into their processes and functions to get the most out of this technology;
Lack of understanding and perceived value
A frequently cited barrier to AI adoption is insufficient understanding of AI’s potential applications and benefits. One survey found that while 97% of workers had heard of AI, only 34% could clearly explain what it is (Verian, 2024). This knowledge gap is particularly pronounced among SMEs, where decision-makers may understand AI conceptually, but struggle to identify specific applications relevant to their business context.
The problem extends beyond simple awareness to questions of perceived value. Many businesses that understand AI’s general capabilities remain uncertain about the return on investment for their specific circumstances. This uncertainty is compounded by media coverage that often emphasises dystopian scenarios, AI misuse, or focuses on displacement rather than augmentation of human capabilities.
Action: Publishing New Zealand’s first AI Strategy
The Government is directly addressing this barrier through the development and publication of this Strategy. Exposure to AI builds workers’ understanding of, and capabilities with, this technology. This Strategy aims to raise awareness and understanding of AI, to spur interest and experimentation, and ultimately lift AI capabilities across the economy.
Lack of AI skills
New Zealand faces a shortage of AI expertise across several domains. The 2024 Datacom State of AI Index: AI Attitudes in NZ survey identified skills shortage as a major barrier for respondents, with 43% of non-users specifically citing lack of expertise as their main reason for not adopting AI.
The skills gap operates at multiple levels: technical specialists who can implement and maintain AI systems, managers who understand how to integrate AI into business processes, executives who can develop AI strategies aligned with business objectives, and workers who know how to use AI productively and responsibly. New Zealand’s small population intensifies competition for AI talent with global markets, particularly given the mobility of highly skilled technology workers.
Action: Building kiwi capacity
New Zealand’s universities are helping to build a future-ready workforce. Programmes like the University of Auckland’s Software Engineering degree and Victoria University of Wellington’s Master of AI offer specialised training in machine learning and AI applications. Other tertiary institutions also provide AI-related courses at various levels. Budget 2025 allocated significant funding that will support this growth: $213 million for tuition and training subsidies, $64 million for STEM and priority areas, and $111 million to support enrolments and Youth Guarantee students, helping young people transition into higher-level study or employment.
Businesses and government agencies are also investing in more immediate workforce capability. Companies like Spark NZ and Microsoft are offering training to boost AI literacy, and reports such as Datacom’s State of AI Index help us to better understand sector-specific skills gaps. Additionally, the Ministry of Business, Innovation and Employment is supporting Business Mentors New Zealand to upskill their Mentors, and Growth Advisors from the Regional Business Partner Network, to help businesses get ready for AI. Together, Business Mentors New Zealand and the Regional Business Partner Network supports over 5,000 businesses annually across New Zealand.
In the public sector, initiatives led by the Government Chief Digital Officer include AI masterclasses for leaders and foundational courses for public servants, reflecting a strong commitment to integrating AI across government operations.
Case study 1: Leading by example in the Public Service
Public Service strategic approach to AI
The Minister for Digitising Government, Hon Judith Collins KC, is updating the work programme to advance the use of AI in the Public Service. It will seek to further build capabilities and address risks and barriers to uptake in the Public Service, leveraging the 2025 survey on AI in the Public Service.
AI use in this AI strategy
MBIE officials used AI for research and drafting in the development of the AI strategy, in line with the Government Chief Digital Officer’s Responsible AI Guidance for the Public Service: GenAI, in a manner that is safe, transparent, and human-supervised. The reason for taking this approach was to leverage the capabilities of AI whilst demonstrating the Government’s commitment to practical use of this technology. The research phase employed AI to review literature, survey findings, and consider international best practice. During drafting, AI was used to generate ideas and to enhance readability. Human oversight was used throughout, with reviews and validations carried out by officials.
Case study 2: New Zealand’s approach to AI and cultural intellectual property
Māori communities in New Zealand view AI with both interest and concern. While AI offers opportunities to amplify mātauranga Māori and Māori data - both considered taonga - it also raises risks of misappropriation and loss of data sovereignty, especially when cultural knowledge is used to train AI models without consent. Protecting Māori cultural IP is important not only for cultural integrity but also for national prosperity.
To address this, Te Puni Kōkiri is exploring ways to support the appropriate use of cultural IP and prevent commercial misappropriation. The Centre for Data Ethics and Innovation has published guidance regarding the use of Māori data.
In parallel, public submissions to Manatū Taonga’s 2024 Amplify strategy highlighted the need to protect New Zealand’s creative and cultural sectors from AI-related threats such as data scraping, bias reinforcement, and violations of data sovereignty. These concerns are shaping how New Zealand navigates AI’s impact on intellectual property. Norms on AI and intellectual property are being formed internationally, informed by litigation and ongoing discussions in global fora. New Zealand will actively monitor international developments in this space.