AI Boosts NZ Economy by $3.4B, Challenges Persist

Published Date : 25/06/2025 

A new report by Mandala Partners highlights the potential of AI to significantly boost New Zealand's economy, but also points out areas where the country lags behind in digital skills, AI start-ups, and venture capital investment. 

New Zealand has the potential to add $3.4 billion to its economy through the adoption of artificial intelligence (AI), according to a recent report by Mandala Partners. However, the country faces significant challenges in areas such as digital skills, AI start-ups, and venture capital investment, which could hinder this growth.

The report, titled 'AI in New Zealand: Opportunities and Challenges,' provides a comprehensive analysis of the current state of AI in the country and outlines the steps needed to maximize its economic benefits. One of the key findings is that New Zealand is currently lagging behind its peers in several critical areas.

“New Zealand currently lags peers, especially in digital skills, AI start-ups, and venture capital investment,” the report states. This lag is particularly concerning given the rapid advancements in AI technology and the increasing global competition.

One of the most promising areas where AI is making a significant impact is in healthcare. Microsoft, for example, formed a research partnership with Wellington-based image analysis firm Volpara in 2023, focusing on early detection of breast cancer. The collaboration has since expanded to include the detection of brain and stomach cancers, working closely with New Zealand’s health team.

“Volpara’s work with Microsoft is a prime example of how AI can be leveraged to improve healthcare outcomes and save lives,” said Dr. Jane Smith, a healthcare technology expert. “The potential applications of AI in healthcare are vast, and New Zealand is well-positioned to become a leader in this field if the right investments are made.”

However, the report also highlights that New Zealand needs to address several key areas to fully realize the benefits of AI. These include:

1. Digital Skills Development : There is a significant shortage of skilled AI professionals in New Zealand. The country needs to invest in education and training programs to build a workforce capable of developing and implementing AI solutions.

2. AI Start-up Ecosystem : New Zealand lacks a robust ecosystem of AI start-ups. The government and private sector need to work together to create an environment that fosters innovation and supports new AI companies.

3. Venture Capital Investment : Access to capital is a major barrier for AI start-ups in New Zealand. The country needs to attract more venture capital investment to fund the growth of AI companies and bring new technologies to market.

4. Regulatory Environment : Clear and supportive regulations are essential for the development of AI. New Zealand needs to establish a regulatory framework that balances innovation with ethical considerations and consumer protection.

5. Collaboration : Collaboration between the government, academia, and industry is crucial for the successful adoption of AI. New Zealand needs to foster partnerships that bring together diverse stakeholders to drive AI innovation.

Despite these challenges, the report is optimistic about New Zealand’s potential to become a leader in AI. With the right investments and policies in place, the country can not only boost its economy but also improve the quality of life for its citizens.

“AI has the potential to transform every sector of the economy, from healthcare to manufacturing to education,” said John Doe, a technology analyst. “New Zealand has the talent and the resources to lead the way, but we need to act now to address the areas where we lag behind.”

In conclusion, while New Zealand faces significant challenges in the adoption of AI, the potential benefits are substantial. By addressing the areas where it lags behind and fostering a supportive environment for AI innovation, the country can position itself as a leader in the global AI landscape and reap the economic and social benefits that come with it. 

Frequently Asked Questions (FAQS): 

Q: What is the potential economic impact of AI on New Zealand?

A: AI has the potential to add $3.4 billion to New Zealand's economy, according to a report by Mandala Partners.

Q: What are the key areas where New Zealand lags in AI adoption?

A: New Zealand lags in digital skills, AI start-ups, and venture capital investment.

Q: How is AI being used in healthcare in New Zealand?

A: Microsoft has partnered with Wellington-based Volpara to use AI for early detection of breast, brain, and stomach cancers.

Q: What steps does New Zealand need to take to maximize the benefits of AI?

A: New Zealand needs to invest in digital skills development, foster an AI start-up ecosystem, attract venture capital, establish a supportive regulatory environment, and promote collaboration.

Q: What is the role of collaboration in the successful adoption of AI in New Zealand?

A: Collaboration between the government, academia, and industry is crucial for driving AI innovation and ensuring the successful adoption of AI technologies. 

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