Overview
The New Zealand Government considers digital trade to be significant for its economy. Digital trade helps local businesses overcome the challenges of scale and distance to enter global markets previously only accessible to larger businesses, accelerating their growth. This activity generates new revenue, helps diversify New Zealand’s exporting base, and makes things cheaper and more convenient for consumers.
The New Zealand Government’s vision is digital inclusion for all through increased Internet access. The portfolio is supported by the Ministry of Business, Innovation and Employment, the Department of Internal Affairs, and the Department of the Prime Minister and Cabinet. New Zealanders are heavy Internet users. According to DataReportal, in early 2024 5.03 million New Zealanders used the Internet achieving a 95.7% penetration rate. Approximately 75% of working New Zealanders use the Internet daily and 99% use it once a week (or more often) at home. Internet access via fiber is approximately 70%.
New Zealanders believe the Internet facilitates easy communication with friends and family, provides access to information, and enables online shopping. Industries with the largest proportion of online retail in the six months prior to April 2023 were travel and accommodation (60%), recreation (48%), furniture and homeware (23%), clothing and footwear (18%), and books and stationery (16%). According to eCommerceDB, the New Zealand e-commerce market is expected to surpass $10 million by 2027.
International E-commerce platforms including Amazon, eBay, Temu, and Alibaba are all well-known in New Zealand. New Zealand Post’s YouShop service offers delivery addresses in the United States to facilitate online trade between vendors and New Zealand consumers. Within New Zealand, most brick-and-mortar retailers offer an online presence.
Market Challenges
a. Regulatory Environment
i. Data Privacy
The New Zealand Privacy Act of 2020 governs the collection, use, storage, and disclosure of personal information by government agencies and private businesses. It replaced the previous Privacy Act of 1993 and introduced several significant changes to strengthen privacy protections for individuals. All organizations must comply with the Privacy Act of 2020.
ii. AI regulation
New Zealand’s Artificial Intelligence (AI) regulations are under development. On 25 July 2024, the Minister of Science and Innovation published a Cabinet paper seeking agreement from the Cabinet’s Economic Policy Committee on a strategic approach to New Zealand’s use of AI. This proposed approach aims to boost public and economic confidence in the use of AI. The Minister promises a “light-touch, proportionate and risk-based approach to AI regulation.” The approach would leverage existing laws as guardrails and only introduce new regulation to “unlock innovation or address acute risks”.
iii. Cross Border Data Flows
New Zealand’s Privacy Act 2020 includes provisions that regulate cross-border data flows, or the transfer of personal data from one country to another.
iv. Cybersecurity
Cyberspace is considered essential to New Zealand’s economic growth, productivity, and security. However, New Zealand businesses are behind when it comes to elevating cybersecurity to the highest levels of governance. In 2023, many businesses with over 100 personnel were victims of cybercrime.
v. Online Harms Regulation
New Zealand’s Harmful Digital Communications Act (HSDA) aims to deter, prevent, and lessen harmful digital communications. Netsafe, contracted under the HSDA, is an online safety non-profit organization providing education, anti-bullying, and support.
vi. Standards Development
New Zealand’s Digital Service Design Standard was published in mid-2018. This standard provides guidelines for anyone who designs or provides government services. It supports New Zealand’s role as one of the Digital 9 (D9) leading digital nations.
vii. Subnational Market Regulation
New Zealand’s local government consists of 11 regional councils and 67 territorial authorities (of which six are unitary authorities, 13 are city councils, and 53 are district councils). These are collectively referred to as “local authorities”. Local government agencies must comply with New Zealand legislation. Local authorities can (and do) have their own bylaws. A bylaw is a rule or regulation made by a Local Authority on a diverse range of subjects e.g. alcohol control.
viii. Market Entry
Successful market entry is a combination of providing clear communication to bridge the geographic distance and completing due diligence on any import restrictions that may apply. Although New Zealanders are very open and enjoy an excellent business reputation for honesty, performing due diligence is important and numerous resources are available for assistance. Non-resident U.S. companies selling online to New Zealand consumers must, when applicable, comply with local regulations including consumer and tax procedures. A U.S. company providing online services to New Zealand residents will need to register for GST when their total supply of goods and services exceeds NZ$60,000 in one year. This policy is managed by New Zealand’s Inland Revenue Department.
ix. Public Sector Procurement
The Government’s 2030 vision is “Government procurement supports people, communities, and businesses to thrive and grow as they aspire to”. Core features of this Procurement for the Future work program are to significantly improve the transparency of public spending, modernize and digitize procurement, and make it easier for New Zealand businesses to work with the government. The New Zealand Government prioritizes streamlining procurement processes for ICT products and services to help reduce costs and time. The Ministry of Business, Innovation and Employment (MBIE) is responsible for procurement functional leadership and provides broader advice and guidance about all-of-government procurement.
b. Digital Trade Barriers
i. Data Localization
New Zealand’s Data Privacy Act 2020 forces organizations to protect personal information sent outside of New Zealand. Before sending personal information to an overseas recipient, an agency must make a reasonable effort to apply data protection safeguards. However, not all transfers of data abroad are considered an overseas disclosure under New Zealand laws. For example, sending data to a cloud hosting provider or another offshore data processor is exempted from these restrictions.
Partly because of the regulatory changes and technological developments (e.g., continued migration to the cloud, growth in the internet economy, favorable climate conditions, and access to sustainable energy), New Zealand is experiencing a changing environment in its data center landscape.
According to New Zealand Trade & Enterprise, the data center market size is projected to grow over 300% from 2020 to 2030. In recent years, companies such as Microsoft and AWS have announced plans to establish data centers in New Zealand, adding to the 80+ that currently exist. These trends are expected to make New Zealand’s data landscape more integrated, secure, and sustainable. In late 2023, the previous New Zealand Government introduced the Digital Services Tax Bill (DST Bill). The Bill proposes to apply a 3% tax on digital service revenues earned from New Zealand customers by large digital services companies. The new Government elected in October 2023 is still deciding whether or how to progress the DST. An implementation date is forecast as January 1, 2025.
ii. Technology Barriers
New Zealand has a high-speed fiber network that’s nearly nationwide and is a leader in high-speed broadband. As of June 2024, the median fixed broadband speed in New Zealand was 254.33 Mbps downloads and 150.71 Mbps uploads.
iii. Barriers to Internet Services
Some groups of New Zealanders experience less than average home access to fiber - those living in the North Island outside the two main cities; those with lower household incomes; and/or those with a long-term disability or impairment making it difficult to do everyday tasks.
iv. Third Country Bias/Influence
New Zealand has no known third-country influencers affecting digital trade.
For national security reasons, no New Zealand telecommunications operator is using 5G equipment provided by China’s Huawei Technologies. Huawei Technologies has previously invested in the country’s 3G and 4G networks and continues to maintain a New Zealand presence.
In 2020, New Zealand (virtually) developed a Digital Economy Partnership Agreement as a new initiative with Chile and Singapore. The Agreement will complement the WTO negotiations on e-commerce and build on the digital economy work underway within APEC, the OECD, and other international forums.
Digital Trade Opportunities
a. Cross-Sector Enabling Technologies
i. Communications and Networking Technologies
New Zealand has an advanced digital infrastructure when it comes to network coverage offering 5G deployment, and internet speeds ranking in the top 20 countries globally (for fixed broadband speed and top 40 for mobile performance, according to the 2023 Inclusive Internet Index and Speedtest Global Index). The three major network providers (2Degrees, Spark, and Vodafone) collectively provide mobile coverage to most of the country.
ii. Advanced Computing
New Zealand’s advanced computing sector is small. Auckland University has invested in the New Zealand eScience Infrastructure (NeSI), a powerful fit-for-purpose High Performance Computing platform available to postgraduate students.
In August 2024, New Zealand’s science community was boosted by an announcement of the purchase of a new NZ$20 million (approximately US$12.12 million) supercomputer. This next-generation system marks the fourth high-performance computer acquired by the National Institute of Water and Atmospheric Research (NIWA) since its initial HPC investment in 1999. The new computer is the largest research computer in New Zealand.
iii. Artificial Intelligence
As elsewhere globally, there is considerable enthusiasm and interest in Artificial Intelligence (AI) in New Zealand, but also concern about how AI will shape future jobs and manage privacy. The Government Chief Digital Officer (GCDO) leads the safe and trustworthy adoption and use of AI in public service. A GCDO survey of government agencies found:
• Agencies plan to grow their AI use, knowledge, and skills
• Agencies want AI’s benefits - such as efficiency, analysis, and service delivery
• Agencies have concerns about AI’s risks — such as ethics, possible biases, security, privacy, skills, and costs.
iv. Other
New Zealand has great internet connectivity with three international submarine cables. The Southern Cross Cable Network (SCCN) was the first international submarine connection in New Zealand, followed by Tasman Global Access (TGA), and then the Hawaiki Cable. New Zealand also has a domestic submarine cable - the Aqualink cable system. Meanwhile, Google is partnering with the Australian company Vocus to deliver the Honomoana cable, which will connect the United States with Australia, New Zealand, and French Polynesia. It will be up and running in 2026. The cable connections have helped U.S. exporters of rich digital content, as well as suppliers of supporting products and services.
In early 2022, Space-X launched satellites allowing faster broadband internet to New Zealand’s rural and remote communities without the need for a fiber connection. In 2023, Space-X reached an agreement with cell phone operator One New Zealand (formerly Vodafone NZ) to use Starlink satellites to provide cell coverage to 100% of New Zealand in late 2024. The technology will be initially for text and multimedia messaging services but will later extend to voice and data services. In 2023, global satellite provider Lynk and New Zealand telecommunications company 2degrees announced a technology trial enabling customers to connect from areas outside of terrestrial mobile coverage.
Improved speeds for New Zealand’s rural/remote communities offer increased opportunities for a variety of services including entertainment. Online video streaming subscriptions are popular in New Zealand with many consumers turning to on-demand TV and away from traditional TV. The three top sources are Netflix, Disney+, and Amazon Prime. Within digital technologies, future focus areas for New Zealand include game development, Data-Driven Innovation, and AI, particularly for agriculture, education, creative industries, construction, the environment (cleantech), and health.
b. Specific Industry Sub-sectors:
i. Financial Technologies
Fintech has surpassed health tech for the first time as New Zealand’s highest-grossing tech subsector. One in every six dollars captured by New Zealand’s 200 largest tech firms is earned by a fintech company.
New Zealand’s financial landscape is changing most notably with a rise in the number of digital banks. Some local fintech firms are also expanding their product offerings. Banking regulatory reform is expected following industry consultation presently underway on digital cash in New Zealand.
ii. Cybersecurity
New Zealand launched a Cyber Security Strategy in 2019. The Strategy aims to proactively address cybercrime and work with international partners to boost resiliency and responsiveness.
Investment in cyber security response and advice organizations have grown in recent years. However, there is still a need to build capability and awareness across the economy and society.
CERT NZ is creating a Cyber Resilience Measurement Framework.
Several U.S. businesses are active in the cyber security sector in New Zealand.
iii. Internet of Things (IoT) and Smart Cities,
New Zealand is well positioned for IoT and the economic opportunities it offers. However, uptake has been low. Some of the IoT areas that New Zealand stands to gain economic benefit from include city infrastructure management, dairy farming, transport and logistics, horticulture, smart metering, asset management, and car parking in cities. Besides a need for more awareness and knowledge, New Zealand has further challenges to address including connectivity, power, and standards; initial and ongoing costs; privacy and security; and environmental sustainability.
iv. Software and Digital Services, and Telecommunications.
The New Zealand Government’s Digital Technology Industry Transformation Plan (DITP) has identified the largest growth opportunities as being in Software-as-a-Service Businesses and the Software Publishing (Interactive Media) and Gaming Development business sectors. The New Zealand Ministry of Business, Innovation and Employment (MBIE) has a Digital Boost Alliance program, which offers training and support to small businesses to help improve their digital skills. A few U.S. businesses are already involved in the program, including AWS, HP, Salesforce, Microsoft, Meta, and Google.
New Zealand has set a goal of increasing the number of women, Māori, Pacific peoples, the neurodiverse, and people with disabilities entering the tech sector in New Zealand.
New Zealand has the fourth highest level of wireless broadband uptake per capita in the OECD. New Zealand continues to expand network reach into the most remote areas and provide increasing capacity through, for example, an ongoing 5G rollout program in major urban areas. Resilience is now a major area of focus for the telecommunications sector given that the country is prone to natural hazards and disasters. Sustainability in the telecommunications sector is increasingly important. Digital equity continues to be a focus. New legislation is expected to improve telecommunication outcomes in New Zealand, including how telecommunication infrastructure is deployed.
v. AI
AI Forum New Zealand has set a goal for New Zealand to become a world-leading hub for responsible AI innovation, globally recognized for harnessing the power of AI for a prosperous, inclusive, and equitable future. New Zealand seeks to move from 49th to top 30 status in the Government AI Readiness Index and move from 36th to top 25 status in the Global AI Index. To help this, the New Zealand Government is currently working on an AI Principles and Roadmap. There are six key sectors of high importance to New Zealand that offer potential for U.S. companies. These include agriculture, architecture engineering and construction, creative industries, education, the environment, and healthcare.
There is a general need in New Zealand to increase capability, scale innovation, enhance adoption, manage risks, and build talent. Agriculture needs to include investment in digital coverage, support for rural professionals, and ecosystem investment. For architecture engineering and construction, New Zealand aspires to be at the forefront of developing, adopting, and implementing innovative solutions to streamline the delivery of critical infrastructure projects. For the creative sector, investment is needed in updating IP regulations and in AI centers of excellence, plus a long-term strategy is required in the education sector to nurture a creative workforce. In an environment where there is a growing need to drive demand toward AI-produced solutions, emphasizing speed, flexibility, and sensing capacity, with a greater focus on consumer markets (B2C) over business-to-business (B2B) is important. A few U.S. businesses are already involved in AI in New Zealand, including Microsoft, Google, and IBM.
Quantum Technologies
New Zealand currently has a relatively small quantum technologies sector but does have world class expertise. Among the leading players is the Dodd-Walls Centre which is working in quantum optics, photonics and precision atomic physics. The Centre engages in educational outreach and commercialization activities. Quantum technologies is one of five priority areas identified by a work program which was recently signed by representatives from New Zealand’s Ministry of Business, Innovation & Employment (MBIE) and the UK’s Department for Science, Innovation and Technology.
MBIE is also funding an international partnership project, The Quantum Technologies Aotearoa (QTA) project, which aims to connect New Zealand’s niche expertise in quantum technology research with international partners. For New Zealand, it brings together scientists from Paihau-Robinson Research Institute, the Universities of Auckland, Canterbury, Massey, Otago, and Victoria plus the Measurement Standards Laboratory (MSL). One area of focus for New Zealand is the development of technologies made from rare-earth nitrides (RENs). It is also aiming to advance its technology in areas such as quantum sensing and quantum computing.
c. Digital Economy-Related Trade Events
i. Aotearoa AI Summit
September 11, 2024 & 2025 (date TBC)
Location: Auckland, New Zealand
Contact: https://aiforum.org.nz/event/2024-aotearoa-ai-summit/
ii. New Zealand Cyber Security Summit 2025
March 24-25, 2025
Location: Wellington, New Zealand
Contact: https://event.brightstar.co.nz/2025NationalCyberSummit
iii. FinTechNZ Hui Taumata 2025
March 11, 2025
Location: Auckland, New Zealand
Contact: https://www.fintechhui.nz/
iv. NZ Techweek
May 19-25, 2025
Location: Various
Contact: NZTech / auckland@techweek.co.nz
v. Digital Health Week NZ 2025
Date & location: to be confirmed
Contact: Health Informatics New Zealand