New Zealand SMEs May Be Missing the AI Moment

New Zealand small and medium businesses are in danger of falling behind in the global AI race unless they have the support of a government-led framework on adoption and literacy, according to a prominent AI strategist.

AI consultant and trainer Mark Laurence says New Zealand needs a national AI policy so desperately, he has developed his own and offered it free of charge to whichever political party is willing to adopt it.

“To be really blunt, I think New Zealand is missing the moment,” he says. “This is likely to be the most influential force on our business lives, our personal careers. We truly believe that this is a defining moment in our generation.”

Laurence’s policy is built on the five pillars: lead it, learn it, use it, teach it, and look after it. He hopes it will spark a national conversation about the technology and drive productivity in SMEs, where it’s needed most.

AI Confusion Leads To Paralysis In Small Businesses

Laurence says daily meetings with small and medium business owners have convinced him New Zealand’s current ‘light touch’ approach to AI governance isn’t working. He believes it’s not reluctance holding leaders back, but confusion. “It’s the same conversation, almost word for word: ‘We know we need to be doing more, we feel we are falling behind, but we don’t know where to start,’” he recounts.

Research from Employment Hero’s AI Paradox report backs up Laurence’s assertion that a gap is emerging between New Zealand and rival markets; only 15 per cent of owners say AI is core to their operation, compared to 24 per cent in the UK, while only 34 per cent believe it drives innovation, compared to 45 per cent in Australia. A separate SME Pulse survey found 18 per cent of Kiwi microbusinesses have not adopted AI at all, and 24 per cent have no plans for further investment.

Laurence says even when businesses are paying for AI subscriptions, they often complain they aren’t seeing a return on investment. This is a red flag. “What you read behind that is, ‘We’re approaching this as just another tech rollout. We see this as a software, and the way that we’ve always adopted software is not working in this situation,’” he says. But there is an obvious reason why it’s not. “It’s because this is not software. This is an intelligence, and none of us have been trained on how to use it, including senior leadership.”

He says it’s no wonder leaders are confused when AI has been thrust at them alongside a mountain of existing responsibilities.

“Everyone has to be super empathetic towards business owners,” he says. “There’s economic pressure, political instability, geopolitical, etc. And to be asked to like try and get your head around AI as a technology, and everything that it means for the change of your business and people and culture and industry, that’s a lot. It’s a huge ask, almost too much.”

Five Pillars That Should Govern AI In New Zealand

Rather than being forced to navigate change alone, Laurence believes small and medium business owners should have the benefit of a framework governing who uses AI and how.

The first of five pillars in his policy is lead it, which suggests top-down oversight and controls to guide AI use. “What we’re recommending is an AI Office that sits within the Prime Minister’s office, very similar to what the Australians have done, which means that AI is not happening in factions,” he explains.

The second pillar, learn it, involves free AI literacy and skills training for every New Zealand adult who wants it. The third, use it, goes further and offers specialised training programs to small businesses, to ensure they can deploy the technology properly. “I believe this is the biggest productivity lever that our nation has to pull on in the next few years,” he says.

Pillar four, teach it, suggests that teachers be trained to use AI responsibly in the classroom, so they can guide students to use it in a way that doesn’t stunt their thinking. Pillar five, look after it, recommends protecting indigenous data and knowledge from extraction by foreign AI labs, and shielding habitats from data centres, if they come to New Zealand.

The initiatives would cost $300 million over three years.

“I’ve tried to do the thinking for our political parties, give them something to leverage off, give them something to start with that they can adopt and take and make their own,” he says.

Small Businesses Should Use It Or Lose Momentum

Of the five pillars, ‘use it’ is the one most relevant to SMEs. As an AI trainer, Laurence is quick to acknowledge a potential conflict of interest, but adds his plan would require all training entities to collaborate under a national framework, to then educate SME leaders. “Raise their skill, raise their literacy, and then they can make good strategic decisions about what it means for their business,” he says.

While some leaders will prefer external advice, he notes it is possible to learn without outside assistance, since training materials are available from AI labs as well as YouTube and LinkedIn Learning. “For those who are motivated and have the time and the inclination and also the ability to link the training to their day to day, the resources are all out there,” he says.

He recommends learning how to prompt well and use a platform’s thinking model, while also employing AI as a co-thinker rather than just a typist. People should also learn how AI can work with files and documents, and personalise settings so it thinks and writes like them. “If you can do those five things within a month, you’ll be in a really strong place to understand how AI can affect you and your business and your people, and help guide them,” he says.

Laurence sees potential productivity gains every time he enters a small business, regardless of industry. They all have what he calls coordination work: admin, moving data, communicating internally or externally. These are the first targets for AI infusion.

“Is the process reasonably templated? Does it follow the same steps and produce the same type of outcome every time? Is it repetitive? Are you doing it often? And is it reasonably mundane? Is it the stuff that doesn’t light you up when you get out of bed?” he asks. “Every business has dozens, if not hundreds, of those types of workflows, and those are the places to focus first. People often think ‘I’m an engineer. Can AI do my engineering work for me?’ And that’s actually not the productive place to start.”

AI Should Redesign Work, Not Speed Up Old Processes

While software is restricted to performing defined functions, businesses can apply AI to any problem that needs solving. “AI is an intelligence, and intelligence has application in an infinite number of places,” he says.

He gives an example of a traditional use case: a PR agency using AI to collate data for monthly reports, cutting a 20-hour task into two-and-a-half hours. Outside the box, a real estate agent client is using ChatGPT in role playing, after finding pairs of sales agents were hard to coordinate and felt self-conscious. “Interacting with voice to practice those scenarios has enabled you to see that engagement. Training for the sales agents has gone through the roof,” he says.

The key to using AI successfully, he says, is to take a systematic rather than task-based approach. “It’s when you’re rebuilding the workflows rather than just doing the old things a bit faster.”

Laurence believes the workforce also needs to be redesigned in the age of AI. He says the benefits are currently skewed towards senior workers, because juniors lack the experience to know what good AI output looks like. “If we deploy AI within those traditional systems, it is going to be disruptive,” he concedes.

The solution would be to redesign entry-level pathways. “There’s a few organisations that I see doing this. They’re employing graduates, they’re giving them more rewarding work early,” he says, noting two crucial things. “They’re giving them an AI assistant, which is trained on all of the data within the company for that role, but they’re also pairing them up with senior staff who give them real-world feedback about the work that they’re doing.”

Laurence says of all the AI-related challenges society faces, employment is the one he feels most positive about. “It will be a human decision about how AI influences jobs,” he believes. “Used badly, with short termism, there will be companies that just slash jobs because of AI. But used well, it can actually feed jobs, and I think that the companies that do that will have a competitive advantage. They’ll be the place that people want to work.”

Ben Thompson, the co-founder and CEO of Employment Hero, says New Zealand should embrace the benefits of new technologies.

“The tools exist. The businesses ready to use them exist. What New Zealand needs to do now is get serious about accelerating AI adoption, not adding to the red tape that’s already holding small businesses back,” he says.

“Technology isn’t elitist – it shouldn’t be reserved for big businesses. SMEs make up 99% of all businesses; they contribute 50% of global GDP. It’s fundamentally wrong that they should fall behind on AI advancements just because they’re small.”

Learn more about Mark Laurence’s AI policy and sign the support wall here.