NZ's AI strategy: ‘light touch' regulation and business opportunities
This will provide reassurance to businesses looking to embrace the benefits of AI, while also reminding businesses of their governance responsibilities and the need to ensure compliance with existing legal frameworks.
The AI strategy follows recent guidance for the public sector, discussed in our previous article.
Alongside the AI strategy, the Government has also issued a note entitled 'Responsible AI Guidance for Businesses'.
In this article, we explore the key takeaways for New Zealand businesses and next steps.
Key takeaways
The AI strategy has been developed following a Cabinet decision in July 2024 committing to a strategic approach. The paper recognised a clear strategic direction would 'clear the path for AI to deliver better outcomes for people in New Zealand'.
The new strategy seeks to achieve this in various ways:
Regulatory clarity and light touch legislation
The strategy notes uncertainty about how existing laws apply to AI may result in 'a cautious approach to AI implementation until regulatory clarity improves'. As a result, it confirms New Zealand is taking a light touch and 'principles-based' approach to AI policy.
It helpfully identifies New Zealand has existing regulatory frameworks (e.g., privacy, consumer protection, human rights) which are largely principles-based and technology-neutral, and which can be updated if needed to enable AI innovation.
This is a pragmatic and positive approach we expect will provide reassurance to businesses exploring the adoption of AI, and will avoid some of the challenges created by detailed standalone legislation such as the EU's AI Act (as discussed in our prior commentary here).
Adoption focus
The strategy outlines New Zealand's deliberate focus on AI adoption rather than development. That recognises the economic challenge and significant investment required for creating foundational AI. This approach is intended to 'more rapidly realise productivity benefits across the economy without waiting for local AI development to mature'.
Upskilling the workforce
It identifies that New Zealand faces a shortage of AI expertise across several sectors. The paper notes New Zealand universities are helping to bridge the gap by building a 'future-ready' workforce through specialised programmes, and notes the Government's investment in tuition, STEM, and youth support to boost enrolment and career pathways.
In addition, the new 'Responsible AI Guidance' offers a valuable framework to help businesses adopt AI responsibly and effectively. The guidance encourages organisations to clearly define their purpose for using AI, prepare thorough stakeholder engagement and safe testing, and align AI objectives with internal policies.
It also recommends building strong governance structures and ensuring compliance with existing regulations. The guidance emphasises the importance of high-quality, unbiased data and cautions against using AI in areas where human judgment is essential.
What does this mean for your business?
The strategy will provide reassurance to businesses seeking to adopt AI systems, and the Responsible AI Guidance offers a helpful consolidated roadmap. In practice, however, the application of the recommendations can be complex and businesses should start thinking early about the implications of the Government's announcement and how they can respond to the new guidance.
We summarise below what we see as the key takeaways and next steps:
Clarify your AI purpose: Define what you want AI to achieve in your organisation and ensure the intended use is lawful and aligned with your business goals.
Prepare for adoption: This should include identifying current processes that are inefficient and could benefit from AI, engaging with stakeholders for input, and testing solutions in controlled environments like AI sandboxes.
Build internal capability: Set up dedicated teams to identify the business's AI objectives and values, develop internal principles to guide the responsible and ethical use of AI, and develop consistent principles and terminology across the business.
Establish governance frameworks: Form a governance team to oversee risk, compliance, and regulatory alignment, and maintain transparent communication with stakeholders to build trust.
Ensure data quality and ethical use: Use clean, unbiased data to train AI systems, and avoid deploying AI in areas where human judgment is critical to protect individuals' rights and wellbeing.
In addition, given the Government's light-touch regulatory approach and preference for relying on existing legal frameworks, it will be critical for businesses to ensure they are familiar with how current laws will apply to the new technology. That should include in particular ensuring that:
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