Innovation, technology and science

The link between effective innovation and higher rates of productivity is well recognised internationally. Innovation improves how skills, capital and natural resources are used. It enables businesses to derive more value. Smarter use of advanced technologies and more investment in capital will enable New Zealand businesses to compete successfully in growing global markets, as many New Zealand companies are already doing in industries as diverse as agriculture, manufacturing and space launch.

There are also enormous opportunities for New Zealand to harness the potential of emerging sectors such as health technology, aerospace and biotechnology if the right regulatory and investment settings are in place.

New Zealand’s space industry is an example of an emerging sector that did not exist 20 years ago. Through a combination of entrepreneurial endeavour, targeted support for research and development, and the creation of an enabling and safe regulatory regime for space launch, there is now a space and advanced aviation sector that is creating jobs and attracting investment.

The use of technologies like Artificial Intelligence (AI), offers efficiencies and frees up resources for other more complex tasks. The Government has a leadership role to encourage the uptake of AI both within Government and the wider business community.

New Zealand’s innovation, technology and science system is not geared up for the future economy

Many of the institutional and funding arrangements within New Zealand’s innovation, technology and science system are decades old and overdue for reform.

New Zealand has been slow to focus on the role of advanced technologies across the economy, and investment in the potential of advanced technologies has been under-weighted in the research and innovation system.

New Zealand has some of the best researchers in the world but there are not strong incentives for this research to be translated into commercial enterprise. This means that some ideas are left unexploited, when they could potentially be applied into a new product or service that could be sold to generate revenue for the country.

New Zealand businesses also have lower rates of capital intensity, which constrains productivity growth in many sectors. New Zealand has the lowest business capital investment in plant, machinery, and technologies compared to other small, advanced economies.

The Government will modernise investment in innovation, technology and science

The Government is modernising the innovation, technology and science system to enable it to better deliver on the needs of the future economy. Seven Crown Research Institutes will be merged into new Public Research Organisations (PROs), bringing together complementary research and science capability. The new organisations will focus on the bio-economy, earth sciences, and health and forensic sciences.

Reforms to boost science sector and economy(external link) — Beehive.govt.nz

A fourth PRO will be created to focus on advanced technology to enable the benefits from artificial intelligence, quantum computing and synthetic biology to be realised in ways that will benefit New Zealanders.

As a primary funder of the science system, the Government wants to ensure New Zealand’s researchers are working on its priorities, and that they have a clear pathway to translate new ideas into successful commercial enterprise. The PROs will look for partnerships with private sector investors and will be adaptable and responsive to Government priorities.

A Prime Minister’s Science, Innovation and Technology Advisory Council is being established and will bring a whole-of-economy perspective to investment decisions.

The Government is working quickly to end the near 30-year ban on genetic modification. Existing restrictions and processes are out of alignment with international best practice and holding back industry potential, as well as the wider application of gene technology to environmental and medical challenges. Legislation will be passed by the end of 2025 to unlock the significant potential of New Zealand’s biotechnology industry.

Gene Technology Bill passes first reading(external link) — Beehive.govt.nz

New Zealand’s space and advanced aviation sectors have potential for significant growth and the Government is committed to establishing a world-leading regulatory environment to support this. The Government’s Space and Advanced Aviation Strategy 2024-2030 targets doubling the sector by 2030. To reach this, more timely decision-making and lighter-touch regulatory settings will be needed, as well as rules that enable companies to demonstrate the integrity and credibility of their products so they can successfully export offshore. A new Prime Minister’s Space Prize will also inspire the next generation of aerospace professionals.

Government’s Space and Advanced Aviation Strategy 2024-2030 [PDF, 2.2 MB]

Prime Minister’s Space Prizes highlight talent and innovation(external link) — Beehive.govt.nz

AI offers enormous potential for New Zealand’s economy through efficiencies and the freeing up of resources. The Government is developing an AI strategy to encourage the uptake of AI and bring together efforts across Government and the wider business community.

To lift economic growth, businesses need to invest in more plant, machinery and technologies. The Government can enable businesses to invest in productive capital to increase profits through automation, AI, data analytics and better technology.

Public Service AI Framework(external link) - Digital.govt.nz

Government's actions

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