disruptive technologies risks, opportunities

52 Pages·2016·1.6 MB·English

DISRUPTIVE TECHNOLOGIES
RISKS, OPPORTUNITIES –
CAN NEW ZEALAND MAKE
THE MOST OF THEM?
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FOREWORD
While we anticipate a future complete In this paper we consider the impact
with robots and sprightly centenarians, technological disruption may bring to
one of the most fundamental shifts New Zealand and the extent to which
is already upon us. Technological we are prepared to take advantage
change is gathering pace at a speed of this disruption. For professionals,
traditional businesses are scrambling such as Chartered Accountants, to be
to keep up with. Technology is changing truly valued we need to understand
the structure of the New Zealand the risks and opportunities associated
economy and our role within the global with disruptive technologies, challenge
economy faster than ever before. existing paradigms and use this
knowledge to make informed decisions
There is a growing impetus for New
on the best way to navigate this sea
Zealand businesses to adapt to
of change.
minimise the disruptive effects of
technology. Current business models Welcome to the conversation.
won’t be sustainable, and the need
for change is becoming urgent. Public
debate on the appropriate role of
technology in New Zealand’s economy
and society is needed to ensure we
address these issues as a nation.
Fred Hutchings
President, Chartered Accountants
Australia and New Zealand
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DDIISSRRUUPPTTIIVVEE TTEECCHHNNOOLLOOGGIIEESS RRIISSKKSS,, OOPPPPOORRTTUUNNIITTIIEESS AANNDD NNEEWW ZZEEAALLAANNDD’’SS AABBIILLIITTYY TTOO MMAAKKEE TTHHEE MMOOSSTT OOFF TTHHEEMM
885,000
(46%)
NEW ZEALAND JOBS AT RISK OF AUTOMATION IN THE NEXT TWO DECADES
24/7, 365
days
EXPECTATIONS OF CONNECTIVITY FOR MOST YOUNG NEW ZEALANDERS
$1.4
trillion
ECONOMIC IMPACT DRIVERLESS
CARS ARE EXPECTED TO HAVE
3
ROBOTS EMPLOYED
AS CLEANERS AT
AUCKLAND AIRPORT
CONTENTS
06 07 08
SUMMARY INTRODUCTION THE FLEXIBILITY OF
OUR ECONOMY WILL
DETERMINE HOW WELL
WE CAN RESPOND
15 20 29
WHY THE COMING RISKS AND FUTURE FORECAST –
TECHNOLOGY OPPORTUNITIES INDUSTRY SPOTLIGHT
TRANSITION WILL OF TECHNOLOGICAL
BE DISRUPTIVE CHANGE IN NEW
ZEALAND
43 48
CALL TO ACTION REFERENCES
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DISRUPTIVE TECHNOLOGIES RISKS, OPPORTUNITIES – CAN NEW ZEALAND MAKE THE MOST OF THEM?
Disruptive technologies, which create new markets and displace
existing ones, are the new normal, and given New Zealand’s
relatively healthy economy and flexible regulatory environment,
we appear to be well placed to evolve and prosper.
SUMMARY
We are a nation of enthusiastic adopters. requiring ‘soft skills’, such as creative and
We embrace technological change and its social intelligence, are at a relatively low
associated benefits. But any rapid change risk of being automated.
brings associated trade-offs and risks as
In this paper, we explore various industries
well as benefits. It is these trade-offs and
where technological change is set to
risks that must be subject to transparent
significantly disrupt the status quo. Driverless
public debate.
cars, solar power and longer lives – all made
The pace at which technology is transforming possible by technological advancement.
our lives is exponential. Entire industries are
Our small island nation is home to numerous
being disrupted as new business models
disruptive technology companies. According
emerge. Regulators, businesses and
to the CEO of one such company, Rocket
individuals alike must adapt or be left behind.
Lab, New Zealand is the best place in the
Our legal and regulatory sectors must act world to launch a satellite! These businesses
to both protect society and foster innovation. are thriving despite low levels of governmental
They must modify their frameworks to investment in innovation, by the standards
accommodate technological advances. of the developed world.
The job market is changing and will continue As stakeholders in our country’s future, we
to change. Some jobs will disappear. Some must be aware of the impact disruptive
will be replaced by different roles that emerge technologies are having on our lives: good
from the relevant technology. Research and bad.
suggests that roles requiring a low skill level
In the final section of the paper, we present
are the most likely to be automated, and that
a series of suggestions that aim to challenge
the resulting job loss is likely to be most severe
policy makers, businesses and individuals to
in regional centres. Studies suggest that jobs
mindfully embrace technological innovation.
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Disruptive technologies have arguably changed our lives
for the better. The world we now inhabit is more globally
interconnected, convenient, and efficient than ever before.
INTRODUCTION
From the manner in which we communicate, In this paper we explore the benefits and
to how wars are fought and the way that costs to society of disruptive technologies,
we work. The world has changed and there and seek to promote public debate on
is no going back. each. We do this to ensure that we are
consciously shaping our future, as the pace
However, despite immense benefits to
of technological change accelerates.
society, disruptive technologies bring about
social, economic and environmental costs
such as job obsolescence, and raise ethical
issues such as the acceptability of certain
medical innovations.
The PACE OF CHANGE IS UNPRECEDENTED.
While it took 50 years for electricity to reach 25%
of homes in the United States (US), the internet
reached 75% of US homes in only 15 years.
+
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DISRUPTIVE TECHNOLOGIES RISKS, OPPORTUNITIES – CAN NEW ZEALAND MAKE THE MOST OF THEM?
THE FLEXIBILITY OF
OUR ECONOMY WILL
DETERMINE HOW WELL
WE CAN RESPOND
HOW WELL PLACED IS NEW
HOW FLEXIBLE IS OUR ZEALAND TO MANAGE
ECONOMY? TECHNOLOGICAL DISRUPTION?
PUBLIC DEBATE REQUIRED ON
HOW WE SHOULD HARNESS
THE POWER OF TECHNOLOGY
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01
HOW FLEXIBLE IS • Resilience – Ranked an impressive third
in 2014, in 2012 New Zealand was rated
OUR ECONOMY?
first in the Forbes 2012 Best Countries
New Zealand appears to be well placed for Business list. Forbes commented that
to adjust to disruptive technologies, as a ‘New Zealand’s economy is closely tied to
result of our relatively flexible regulatory Australia’s, and both held up better than
environment, moderate ageing trends most during the global financial crisis’.3
and resilient economic environment, as • Younger than most – While New Zealand’s
discussed below. population is ageing, the impact is quite
• Relatively light regulation – New Zealand moderate compared to many OECD
is ranked second only to Singapore, in countries, owing to both relatively high net
World Bank global comparisons of the migration and fertility rates. The ‘fiscal
ease of starting up and doing business.1 tsunami’ that is feared due to the ageing
• Comparatively low deficit – Compared population is much less of a risk in New
Zealand than other OECD countries.4
to most OECD countries, New Zealand’s
fiscal balance is only mildly in deficit and Opportunities exist to improve the strength
our total government debt represents only and flexibility of our economy. This will
38% of GDP, which is low by international enable New Zealand to capitalise on
standards.2 the opportunities made possible, whilst
successfully managing the associated risks
and challenges of disruptive technologies.
Our 20th century REGULATORY SETTINGS NEED MODERNISING
to keep pace with 21st century technological change.
+
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DISRUPTIVE TECHNOLOGIES RISKS, OPPORTUNITIES – CAN NEW ZEALAND MAKE THE MOST OF THEM?
02
HOW WELL PLACED also compares favourably to other countries,
such as Singapore, Australia and the United
IS NEW ZEALAND TO
Kingdom (UK). Continued investment in
MANAGE TECHNOLOGICAL
rural technological infrastructure will be
DISRUPTION? important to ensure that the regional divide
does not intensify.
New Zealand’s ability to manage
technological change depends on the The pattern of globalisation is also a very
extent to which we adapt to the changes beneficial tailwind for New Zealand - the
fuelled by the digital economy. world is coming to us, as an increasing share
of global economic activity takes place in
New Zealanders are enthusiastic technology
Asia. The opportunities for trade are clear.
adopters. For example, take-up of smart
Exports and tourism will increasingly focus
phones has been very quick, and internet
on Asian emerging economic powerhouses.
usage across all regions, ages and genders
is now close to universal. As illustrated in
Figure 1, overall, New Zealand household While familiarity with technology is
internet penetration is over 90%, more than important, the ability of people to win the
double the current global average and race against technology will be contingent on
marginally higher than other developed opportunities for re-training and up-skilling.
economies such as Australia, Japan and
South Korea. Rural broadband provision
The increasing pace of technological
progress will likely cause higher job turnover,
and a higher level of ‘frictional unemployment’.
This suggests that, more than ever before,
Several CAREER CHANGES may be required New Zealanders need to be prepared for
over a persons’ working life given the PACE changing occupations during the course of
their careers. This may not be unwelcome
OF TECHNOLOGICAL CHANGE.
in itself as new technologies and longer
life-spans imply increased opportunities
to change careers.