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Automation will not save New Zealand

1 December 2020

There is a belief that the way to get New Zealand out of the economic recession we are in is automation: robotics and artificial intelligence. I have to say that in Government circles in Wellington, this is often a firmly held belief. Automation they say will replace the need for workers to pick and pack fruit and vegetables and that automation will drive an export led recovery. This drive they believe will result in New Zealand becoming a high wage economy, which will in itself pull the country out of recession.

The automation conviction is not new and surfaces every few years. In the past, it has not resulted in the economic transformation that was predicted and, in my view, it will not see the economic transformation that is now being sought.

Over the past few decades, automation has been progressively adopted across New Zealand industries in areas where automation can be readily applied. For this progressive movement to continue, continued encouragement and funding support is needed.

In many respects, automation has taken hold in areas where it can be readily applied, and New Zealand is a world leader in many of these initiatives. But as far as export returns are concerned, automation is worth around $1.5 billion according to Statistics NZ, making it our thirteenth largest export earner.

So as a driver of export returns, automation will not be leading our economic recovery. The driver for New Zealand is the primary sector, which collectively earns more than $45 billion each year. Seafood alone produces as much export return as automation and has the potential to more quickly earn greater returns if the regulatory settings are right.

This is not to say that automation is not an important accelerator within the primary sector, particularly for processing, although there are initiatives for field work that are progressing well. The issue is that it takes many years to develop the automation needed for field work and how crops are planted often needs to change so that automation can work.

Our primary sector is a rapid adopter of automation. There is nothing around the world that has not been adopted in New Zealand, and we have some leading-edge projects underway. In the next decade, changes will progressively happen but not noticeably in the next few years.

Even if we could automate more, there will still be the need for workers to perform a whole range of tasks, including being able to maintain and repair automation when it doesn’t work. So, the belief that the primary sector can be forced to develop and adopt automation in 2021 is misplaced for a number of reasons. The first is that automation for field work is under development and will not be ready for trials in the coming year, let alone roll out across the primary sector. The second is it takes money to fund the development and adoption of automation. Money is in short supply in the majority of our sector at present, due to the impact of Covid on sales and the increased costs of producing produce and shipping it to market. The third is that there will always be – at least in the next decade – jobs that automation just can’t do. The fourth reason is that there is nothing that has been developed overseas, that is not being adopted here.

In summary, New Zealand is developing and adopting automation. This is changing the way the primary sector operates, but as explained above, this is a time consuming and expensive process. In terms of the current economic crisis, automation will not be the solution to generating greater export returns or replacing permanent and seasonal labour.

In the longer term, automation has real potential to make significant changes, but it will never replace our need for workers.

Mike Chapman, Chief Executive