At the INFINZ Conference this month, the Initiative’s Dr Oliver Hartwich presented some uncomfortable facts. New Zealand lags behind its OECD peers in productivity, capital intensity, and economic complexity. He warned about our habit of consoling ourselves with positive self-narratives that are not supported by data: "we don't know how lucky we are," "number 8 wire mentality," and "punching above our weight." 

The audience could not help but notice when Microsoft's Isuru Fernando joined later and, in a separate session, told them that New Zealand "punches above its weight."  
The audience responded with laughter.  

They had heard Oliver's warning just hours earlier. The contrast captured a broader national habit: New Zealanders prefer to believe they are ahead, even when the evidence suggests otherwise. 

At an informal dinner of technology executives, one chief executive offered another kind of reassurance. "New Zealand," he said, "is possibly in one of the best positions for AI. We missed the industrial and internet revolutions, so we're still grounded in agriculture, and the world will always need food." 
 
The remark drew polite nods.  

But it revealed something deeper: we often frame poor performance as an advantage. 

While one of our more competitive export sectors, agriculture, is already automated and employs fewer people than ever, it is not a highly productive sector by global standards. It will not lift us to the frontier. 

New Zealand has early adopters experimenting with AI tools. Usage rates are high among those who try them. But adoption is not the same as adaptation.  

Adoption means using new tools. Adaptation means reorganising workflows, retraining staff, upgrading data systems, and making complementary investments that let AI improve how work gets done. It means integrating AI into core operations, not just running pilots. 

Any momentum we build in early adoption of AI will run up against cultural caution. Even if some tech-forward early adopters are pushing the frontier, wider uptake of AI and turning that into productivity gains will prove harder.  

Treasury, MBIE, and the former Productivity Commission all agree: our framework conditions are weak. Low capital intensity, uneven management capability, thin digital infrastructure, limited competition in domestic markets, poor technology diffusion, and weak research-industry collaboration mean early experiments seldom mature into system-level gains. 

We are quick to start, but slow to adapt. 

If we treat our distance from disruption as a strategy, we will stay distant from growth. The world's next productivity wave is forming. Our place in it depends on whether we take the necessary steps, encompassing capital, capability, competition, and confidence. Otherwise, the only thing we'll keep punching is the same old line about punching above our weight.