Lifting technology uptake and innovation to support Better Work
In order to deliver Better Work, the tourism industry needs to raise labour productivity.
On this page
As our largest export industry prior to COVID-19, improved productivity would have a positive impact on New Zealand’s overall economic growth and prosperity and would be a key mechanism to help tourism workers earn more.
Tourism has one of the lowest rates of labour productivity in Aotearoa New Zealand [1]. This means that for every hour of work, the revenue gained is lower than it is in our other major sectors, such as agriculture.
"In many respects, productivity is the key factor that ultimately influences the ability of the industry to attract the capital and labour that it needs, and to allow it to re-invest back into the industry for better jobs, care for nature, creating further value."
Tourism Industry Aotearoa
Public consultation, August 2022
In order to deliver Better Work, tourism firms need to be generating more value per worker, or to put it another way, using technology to leave more time for workers to provide customer service or other high-value activities. The OECD has identified a strong link between job quality and productivity [2].
Public consultation confirmed that most people support this shift. Some responders did point out that tourism is fundamentally about human interaction, and that the human interaction seen in tourism is often highly valued by consumers. As one submitter noted, robots and self-service check ins are ‘not manaakitanga’. It is therefore important that the focus be on technology as an enabler to complement and enhance the human element of tourism, rather than replace it.
It is important that we apply the principle of ‘just transition’ to any workers whose jobs are affected by the introduction of technology by supporting them in reskilling or transitioning to new employment. Just Transitions principles are about acknowledging the impact of change and planning to make a transition more fair, equitable, and inclusive.
Several initiatives of this kind are being developed across the wider economy, including the New Zealand Income Insurance Scheme, the Reform of Vocational Education, and Regional Workforce Plans.
Defining technology and innovation
It is important to define what is meant by technology and innovation. They are not the same thing but can complement each other. For the purposes of this document, we use the terms to mean the following:
Technology is used to mean the use of existing products and services (including apps, devices, online systems) to boost efficiency, do jobs easier or faster, and deliver stronger business performance. The uptake of existing technology is not innovation in and of itself, but it can be a catalyst for innovation.
Innovation is used to mean new ideas, products, processes, or ways of doing things. Innovation is more novel and often involves taking a risk. For the purposes of this document, we refer to 3 broad categories of innovation:
- Product innovation – the development of new products
- Process innovation – new or different business processes to boost efficiency/productivity
- Business-model innovation – new or different business models, for example models that place greater emphasis on purpose-driven business.
Although COVID-19 has brought about advances in technology adoption, tourism still faces challenges in both technology uptake and innovation. The initiatives in this Tirohanga Hou aim to address these challenges and add value by adding to or building on the existing ecosystem.
Initiative 8: Initiatives to boost update of technology in tourism businesses
A key barrier to uptake of new technology is firm size and capital availability. In March 2020, 87% of tourism firms were small and medium enterprises (SMEs) with fewer than 20 employees. This limits the business’s capacity to adopt new technology solutions. Even larger firms in the Aotearoa New Zealand tourism industry are relatively small compared to global counterparts.
Initiative 8 – Develop Digital Boost tourism and hospitality content
Develop Digital Boost tourism and hospitality content through a series of new ‘real world stories’ showcasing examples of technology use in the industry and new ‘how to’ videos to build further knowledge, skills, confidence, and trust to take up this technology.
Outcome sought
More firms use Digital Boost leading to accelerated uptake of technology, particularly by SMEs.
We heard through public consultation that businesses wanted to see more concrete examples of adoption of technological solutions in tourism and hospitality. To move in this direction, they need to be able to ‘see the good’.
Digital Boost is a free online education platform that gives small businesses the skills they need to succeed in a digital world. It can help create and promote industry-specific digital skills for businesses. Although the programme only began in December 2020, there are already over 56,000 users of the platform. An independent evaluation in August 2022 found positive outcomes for businesses using the platform (for example 23% of businesses reported improved revenue after using Digital Boost) [3].
Digital Boost is now developing industry-specific material and recently completed a set of videos targeting the agriculture sector. As a result of the Better Work Action Plan, Digital Boost will focus on tourism next, with the production of new videos in early 2023 featuring both ‘real world stories’ and ‘how to’ content. This is an excellent opportunity to leverage an existing and proven programme and progress towards this outcome.
Initiative 9: Expo showcasing technology
Initiative 9 – Expo/trade shows to showcase existing and emerging technologies to the tourism industry
A regular (annual, or biennial) in-person event showcasing the wide range of existing and emerging technology to help boost business productivity and create efficiencies.
The expo would also showcase success stories of tourism businesses who have applied new technologies in their businesses.
Outcome sought
Tourism firms have greater knowledge of the opportunities presented by technology and can more easily invest in them. With technology being an enabler to innovation, this should also help to lift innovation in the industry.
We have heard from businesses that there is an overwhelming array of new products available and, because they are often time-poor, this can lead to hesitation in uptake. An event that enables a tourism firm to interact with a wide array of new technologies in one place at one time could help to overcome these barriers.
This could take place alongside existing meetings of tourism businesses, such as industry body conferences, to take advantage of the fact people are already gathered together.
As outlined in the Productivity Commission’s report Technological Change and the Future of Work, technology doesn’t just replace jobs, it can also create them. Technology has many effects on the labour market, some of which are positive for workers, the quality of work, and jobs [4]. Predictions that technology will inevitably replace work are simplistic and out of step with historical experience. In addition, with current global workforce shortages, it is increasingly important for businesses that their workers can focus on higher-value activities.
Initiative 10: Revisit existing tools and resources for small businesses
Initiative 10 – Encourage more utilisation of business support tools and resources
Encourage better utilisation of existing online business tools and resources and conduct in-depth analysis before upgrading/strengthening existing tools, and/or designing new ones.
Outcome sought
More tourism and hospitality businesses make use of tools and resources available and, as a result, become better employers.
Small firms are often constrained in their ability to invest in training and development and may not have the highly effective human resources (HR) management of larger firms.
If owners are utilising effective and relevant tools and resources, businesses will be able to deliver good employment practices and processes, improving the experience of the worker. There would be clear benefits in providing support to tourism businesses to improve HR capability and to help them keep abreast of changing trends and requirements in areas such as employment law.
This initiative received strong support through the public consultation on the ITP. However, many people noted that existing platforms could be improved and built upon. Some businesses are overwhelmed by the number of resources already available, while others are unaware of what tools and resources are available and find it challenging to navigate the different sources or platforms to find relevant tools and resources.
As a first step, the goal is to encourage better utilisation of the current range of business support available, potentially leveraging the Accord.
Existing tools and resources include:
- Business.govt.nz(external link) — a website that provides capability building and compliance support resources. Resources available are designed with experts for kiwi businesses and used 7.4 million times annually.
- Employment New Zealand(external link) — an organisation which provides information to help employees and employers understand their employment rights and responsibilities. Its website also has resources to help those engaging with businesses to ensure that they are treating workers fairly, ethically, and sustainably.
- Regional Business Partners Network(external link) — a programme that connects New Zealand businesses to the right advice, people, funding, and resources.
- Sector-specific industry organisations — organisations that disseminate information and provide best-practice guidance and training specific to their audience of business owners.
As a second step, analysis and research could be conducted on the industry’s experiences using these tools, which could be used to decide whether any further work is required to strengthen and/or make these more relevant for tourism businesses. If there is a clear need for a new tool or resource, that can be explored.
Other considerations for technology uptake
Some of the more geographically remote tourism businesses identified limited infrastructure, particularly internet services, as a barrier to uptake of technology. This feedback has been passed on to relevant digital policy and regional development teams for consideration.
Lastly, some feedback emphasised the importance of upskilling staff in the use of new technology. While this will be a part of the initiatives in this Tirohanga Hou – for example, a business investing in new technology will usually need to run staff training for that particular tool – in more general terms it is best addressed under the Fit-for-Purpose Education and Training Tirohanga Hou, in which the opportunity to add a new Tourism Tech micro-credential is being explored. In addition, the Digital Boost platform is also suitable for (and used by) employees.
Initiatives to stimulate innovation in Aotearoa New Zealand tourism
Separate from the challenges to technology uptake, the tourism industry in Aotearoa New Zealand also faces challenges associated with innovation. Small business, low levels of capital, and a disbursed industry are barriers to generating new, game-changing ideas needed to shift the dial.
A view expressed through public consultation was that tourism is overlooked or unable to access government spending on research and development (R&D) and innovation through organisations such as Callaghan Innovation. It is not the case that tourism is ineligible; the challenge is more that proposals are not meeting the criteria for support.
It is also important to recognise that businesses outside the tourism industry might be well placed to access R&D support to develop innovative solutions that the tourism industry can adopt. There are opportunities to leverage the creativity in the tourism industry and encourage greater collaboration with other industries to boost value in the industry.
To further increase innovation in the industry, we must move away from thinking about innovation as being only about technology or being only about products. Instead, we need to think about it more broadly; to also include innovative processes or business models. Another part of the challenge is encouraging greater collaboration between business and other thought leaders, to create the spaces for innovative solutions to emerge.
Existing opportunities targeted at driving innovation in the tourism industry
Innovation programme for tourism recovery
The Innovation Programme for Tourism Recovery (the Innovation Programme) is a $54 million contestable fund designed to help stimulate a shift towards a regenerative, low carbon, productive and innovative tourism sector as the sector rebuilds following the COVID-19 pandemic.
The Innovation Programme seeks to deliver transformational and disruptive innovation outcomes for the sector. It has been designed in consultation with key stakeholders and sector representatives to ensure it is fit for purpose, inclusive, and accessible. The Innovation Programme has broad, open eligibility to drive the greatest levels of innovation and transformational change.
The Innovation Programme enables better work through its purpose, outcomes, and focus across the Aotearoa New Zealand visitor journey. One of its outcomes is to lift the productivity or capability of the tourism sector through technology. The Innovation Programme has the ability to support the development of new innovative technologies, as well as the adoption of existing innovative technologies in a new or different way.
The Innovation Programme for Tourism Recovery (Innovation Programme) will provide a supportive platform for transformative ideas that will change the visitor journey in New Zealand. An evaluation of the Innovation Programme following its one-year delivery period will provide valuable insights into the most effective ways for generating innovation in the tourism industry, and whether the criteria helped to improve the eligibility of all parts of tourism for broader government R&D funding.
Alongside this, regions of New Zealand have been producing Destination Management Plans, many of which demonstrate a clear interest in community-led innovation. Experience shows that the best kinds of innovation are networked.
Initiative 11: Leveraging accelerators for innovation in tourism
Initiative 11 – Accelerator programme for innovation in Tourism
Tourism Accelerators to bring together leaders from tourism and the wider community to generate innovative ideas for the local tourism industry.
Outcome sought
Accelerators, or Challenges, provide intensive and time-limited business support for cohorts of start-ups, aiming to get them ready for investment more quickly than through traditional means.
A key focus point for the initial round would be on outcomes that boost labour productivity and contribute to Better Work, but there is potential to expand this model to meet potential initiatives that come out of future phases of the ITP.
Accelerator programmes (also referred to as Challenges) are widely used in the innovation ecosystem to generate innovative business models and products. They provide intensive and time-limited business support for cohorts of start-ups, aiming to get them ready for investment more quickly than through traditional means. There are (at least) 2 previous examples of the use of accelerators in tourism with the Lightning Lab Tourism business accelerator run in 2019 and the Tourism Accelerator in 2020. Despite the timing of these accelerators and the impacts of the COVID-19 pandemic, there was some success with 8 businesses operating for more than a year after the programmes.
Accelerator programmes could be developed to generate innovative outcomes that benefit and help to deliver better work. Accelerators can have a number of lenses – including regional, sectoral, or general-purpose technologies. Accelerators work by tapping into innovative thought leaders from a range of backgrounds. To maximise creativity, this programme could include tourism businesses and business owners, tech companies, community leaders, and iwi. These could be novel ideas, or ones that recombine existing ideas or technologies for the tourism industry. With the rapid development of technologies that allow sophisticated data usage and immersive or virtual experiences, this could lead to highly transformative approaches to improving work in tourism.
Specifics for this initiative will be tested with key stakeholders and experts in innovation prior to implementation.
Case study – Lightning Lab Accelerator 2019
Lightning Lab is a 3-month business acceleration programme with a strong mentor focus. Each programme takes in up to 10 companies and provides each company with structure, start-up methodologies, business skills and focused support so they can successfully find the market fit for their products and rapidly grow their user base. A tourism-specific Lightning Lab Accelerator was held in 2019 to help position New Zealand as the leading nation in practising sustainable tourism.
Tourism Design Accelerator 2020
The 2020 Tourism Design Accelerator was held as part of the COVID-19 recovery and took place over 4 months. This accelerator was run to support business founders to design solutions to some of the tourism industry’s most pressing challenges, including a more resilient and sustainable sector. This accelerator saw 7 businesses participate and followed the same format as the Lightning Lab accelerator providing businesses with the opportunity to attend workshops, have access to mentors, and attend presentations.
Roady
Roady is an app that helps people to plan a road trip in New Zealand and is designed to connect travellers with hidden gems. Roady was founded in 2017 originally selling customised road trip packages. Roady was receiving great feedback and had a strong social media following but had limited scalability and a very manual booking process.
Roady founder Roscoe Price Moor wanted to move the business to the next stage and his concept for an app really began to gain traction when he participated in the Tourism Accelerator 2020 delivered by Creative HQ.
“It was such a concentrated 4 months at Creative HQ, it really forces you to get into gear,” Price Moor says. “Creative HQ really launched us to the next era of Roady.”
During the Tourism Accelerator, Roady caught the eye of Angel HQ who subsequently invested in the company and Glenn Campbell (Tourwriter’s CEO) who joined the company’s board as an investor-director.
As a result of participating in the Tourism Accelerator, Roady was able to build an app that allows users to create their own lists and tick off experiences by uploading their own photo of the location. There is a gamified element, with users receiving virtual pins on their own personalised map, earning badges when they complete certain milestones and a national leaderboard to become the most well-travelled in the country. The app also allows for tourism operators to pay a monthly subscription to have their experience listed/promoted on the app.
The key benefit in the accelerator for Roscoe was the access to mentors, speakers on different topics (such as capital raising) and investors who could contribute capital at the end of the accelerator to one or more proposals.
As a result of participating in the accelerator, Roady has:
- successfully raised $250,000
- plans to expand into Australia
- achieved 25,000 app downloads
- 50,000 photos on the platform
- employed 5 full time staff
- incorporated other income elements into the business (such as content creation)
What can we learn from this case study?
- Accelerators provide businesses with access to a network of experienced leaders as well as those with industry specific experience. It enables businesses to make connections and build long-lasting relationships with mentors that can help them progress to the next level in a short amount of time.
- Accelerators are a forum to share ideas and can assist businesses with problem solving.
- The cohort nature of an accelerator provides an opportunity for businesses to work with like-minded individuals who are all at early stages of their business.
- Accelerators provide the discipline and focus that early ventures often need as they are tackling difficult challenges and creating new and innovative solutions.
Initiative 12: Innovative business models in tourism
Initiative 12 – Innovation in tourism business models, to support purpose-led and intergenerational objectives
Develop a set of tools to promote uptake of innovative business models in tourism. This could include workshops or seminars as well as guidance and capability support. These would have a focus on purpose-driven, intergenerational values.
Outcome
More tourism businesses are aware of options and pathways for adopting innovative business models, leading to a higher value offering that supports better work and more fully embodies Aotearoa New Zealand’s unique culture and identity.
In the draft version of the Better Work Action Plan, we included a Tirohanga Hou called Purpose Driven Intergenerational Mindsets. This drew on research showing that purpose-led organisations that take an intergenerational approach to their operations, and are committed to achieving outcomes beyond financial returns, have more engaged workers and create more value for their businesses and shareholders – 'values creating value'.
In Aotearoa New Zealand, Māori entities and businesses lead the way in incorporating purpose and intergenerational wellbeing into their business operations. This approach balances multiple values and objectives — spanning social, cultural, financial, environmental, spiritual, and political domains. Of course, these business models are not the exclusive domain of Māori businesses. For example, large segments of our rural sector operate similar models and are also driven by longer-term, sustainable, intergenerational values.
MBIE’s Long Term Insights Briefing on the Future of Business for Aotearoa New Zealand found that the number of purpose-led businesses is likely to grow steadily over time, driven by employees, customers, investors, and particularly young people who will increasingly expect business to be more socially and environmentally responsible [5]. Reflecting other trends, such as the uptake of new technology, the Briefing highlights an expected growing diversity of business models over time – there will be more values-oriented, networked, and decentralised firms, which could involve partnerships across domains of business, government, and community.
Workshops or seminars could enable a wider group of tourism businesses to learn from these approaches, where having people at the centre encourages the development of employees. This could lead to greater innovation in business models, generating more value for the industry and for workers. This initiative would also explore any structural barriers to uptake of innovative business models. For example, equity sharing with employees may encounter regulatory barriers.
- Proactive Release of Cabinet Paper: A Refreshed Industry Strategy in Response to COVID-19 [PDF, 13 MB] — MBIE (2020) [Back to text]
- Job Quality, Health and Productivity: An evidence-based framework for analysis(external link) — Saint-Martin, A., H. Inanc and C. Prinz (2018) OECD Social, Employment and Migration Working Papers, No. 221, OECD Publishing, Paris [Back to text]
- Digital Boost Evaluation Research [PDF, 1.5 MB] — Better for Business (August 2022) [Back to text]
- Technological Change and the Future of Work [PDF, 3.8 MB](external link) — New Zealand Productivity Commission (2020) [Back to text]
- Long-term insights Briefing on the Future of business for Aotearoa New Zealand [PDF, 4.2 MB] — MBIE (November 2022) [Back to text]