Budget 2020: Industry 4.0


Budget 2020: Future of work

How the Government can advance New Zealand’s productivity and embrace the future of work

At 11:59 pm on 25 March 2020, the Government moved to COVID-19 Alert Level 4, and in doing so, New Zealand took an unprecedented step towards having a fully digital workforce. This move, made to protect the health of New Zealanders, demanded resilience, agility and adaptation from all New Zealand workplaces.

COVID-19 is responsible for uncountable devastation, but there may also be a small silver lining: the move towards Industry 4.0 and a future-proofed country with a truly digital workforce.

Budget 2020 has a key focus on jobs, with a number of initiatives designed to get unemployment back to 4.2 per cent by 2022; including

  • A $1.6 billion Trades and Apprenticeships Training Package, including making targeted vocational training courses free for all ages for two years. Targeted areas include building and construction, agriculture, manufacturing, community health, counselling and care work
  • Environmental initiatives which are expected to create 11,000 jobs in regional New Zealand
  • A range of initiatives to get at least 10,000 more New Zealanders working in the primary sector

While many of the above jobs are likely to be manual rather than digitally focused, within the Budget funding are several initiatives to also encourage a higher wage economy, including investing in research and development, helping small businesses to embrace e-commerce, and investing in the agritech sector.

Progression will take a concerted effort with the Government incentivising and driving the following types of behaviours:

Belonging - Smart investment combined with empowering policy settings are key to reducing the inequity caused by the existing digital divide, including socio-economic imbalances as well as generational differences. Inequities can be addressed by initiatives such as those providing underprivileged children with an out of school online learning environment. 

Reinvention – Deloitte research demonstrated that, while technology contributed to the loss of 800,000 jobs between 2001 and 2015, in the same period it helped create 3.5 million new jobs which, on average, were higher skilled and higher paid.1

The Government has made a massive investment in education in this Budget and it is pleasing that free vocational training courses are available for all ages and not just school leavers. With unemployment expected to hit 8.3% in June 2020 as a result of the pandemic, ensuring all New Zealanders have access to reskilling opportunities will help mitigate the impacts of COVID-19 while enabling Industry 4.0 advancement. The investments made by Budget 2020 are forecast by Treasury to bring the unemployment rate back to the current level within two years.

Resilience – For New Zealand to bounce back from COVID-19, the Government must invest in a multifaceted approach focussed on people, skills and tools combined addressing historic inequities. But what are the bolder plays we need to invest in? A workforce that further leverages more advanced technologies such as artificial intelligence (cognitive and machine learning) to solve problems and gain insight will help future-proof New Zealand, enhancing our productivity. An example could be machine learning to predict training needs based on individual search histories.

The devastating consequences of COVID-19 demand a clear-headed and optimistic investment in people. There is opportunity to use the disruption caused by the COVID-19 lockdown to ensure our workforce enjoys a modern, inclusive and rewarding working life.

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