Report: The Trans-Tasman Tech Divide – Is New Zealand the Nimble Specialist to Australia’s Established Powerhouse?

The technology ecosystems of New Zealand and Australia, while sharing deep cultural and economic ties, are embarking on distinct and compelling trajectories in 2025. This analysis, drawing on insights from the New Zealand CIO Summit, PwC’s Annual CEO Survey for New Zealand, and a broader range of Australian sources, identifies a fascinating divergence in strategy, sentiment, and specialization. Australia, with its larger scale and more established infrastructure, is leveraging a reformist policy agenda to reinforce its position as a dominant regional powerhouse. In contrast, New Zealand is carving out a new identity as a nimble specialist, utilizing its agility to adopt proven technologies and champion unique sectoral strengths.

The foundational digital transformation catalyzed by the COVID-19 pandemic laid a shared groundwork for both nations. However, their approaches to subsequent challenges, from AI regulation to skills shortages and venture capital, reveal a fundamental difference in strategic philosophy. New Zealand’s government has embraced a late-adopter strategy for AI, emphasizing a principles-based, light-touch approach and public sector leadership to build trust. This contrasts with Australia’s more reform-focused model, which seeks to amend existing regulations rather than create new, prescriptive laws.

Commercially, this divergence is reflected in CEO sentiment and investment patterns. New Zealand’s business leaders exhibit a paradoxical cautious optimism, recognizing AI’s potential for short-term efficiency gains but maintaining a significant “trust gap” that hinders long-term, strategic commitments. Meanwhile, Australian enterprises are moving aggressively from AI experimentation to strategic implementation, backed by a projected AU$147 billion in IT spending for 2025. This readiness is supported by an optimistic workforce that is embracing the technology’s potential.

In terms of innovation, each country has a clear area of specialization. New Zealand is a global leader in agritech, boasting a dense, highly connected ecosystem that has been recognized internationally for doing “more with less” and acting as a global testbed for new climate-resilient farming solutions. Australia, by comparison, is an established fintech powerhouse, ranking sixth globally and capitalizing on foundational investments in infrastructure like its real-time payments platform.

Ultimately, the future of technology across the Tasman is not a zero-sum game but a dynamic partnership. The shared challenges of persistent skills gaps and a subdued venture capital environment suggest that their respective strengths are strategically complementary. By leveraging Australia’s scale and mature regulatory environment and New Zealand’s agility and deep sectoral expertise, the trans-Tasman region can project a more compelling proposition to global investors.

The Post-Pandemic Catalyst and Divergent Policy Frameworks

The global and regional digital landscapes of 2025 are indelibly shaped by the transformative effects of the COVID-19 pandemic. The crisis acted as a digital crucible, forcing a rapid, widespread adoption of remote work, cloud services, and digital channels. This acceleration of a decade’s worth of digital transformation occurred within just a few months, fundamentally reshaping consumer behavior and business operations in both New Zealand and Australia. This shared experience provided the impetus for a new wave of digital strategy, but each nation has since charted a distinct course in governance and policy.  

New Zealand’s Policy Pivot: The Adopter Nation Strategy

New Zealand’s strategic approach to the future of technology, particularly concerning artificial intelligence, is defined by a clear philosophy: to be an “adopter nation”. The release of its comprehensive national AI strategy in July 2025 marked a significant but belated step, positioning New Zealand as the final OECD member to establish such a framework. Rather than focusing on developing new technologies from scratch, the strategy prioritizes the implementation of proven AI solutions to drive efficiency and economic growth, with ambitious plans to add NZ$76 billion to the economy by 2038.  

The regulatory framework underpinning this strategy is described as “light-touch” and principles-based, aligning with OECD guidelines and the collective governance efforts of Five Eyes nations. This approach is designed to provide a stable, enabling policy environment that reduces uncertainty for businesses, particularly for small and medium-sized enterprises (SMEs), and to foster international alignment. The government has also demonstrated a commitment to “walking the talk” by introducing a comprehensive Public Service AI Framework in February 2025, a roadmap for safe AI deployment across government departments. This public sector leadership is intended to instill confidence in the private sector and establish best practices for AI governance.  

A unique and globally distinct element of this strategy is its incorporation of Treaty of Waitangi obligations. This foundational commitment ensures that Māori perspectives inform the ethical development of AI, including bias mitigation and data governance, reflecting a deep commitment to equitable technology development that respects indigenous rights. This inclusion positions New Zealand’s digital strategy as not just an economic or technological one, but as a framework built on core cultural values.  

Australia’s Regulatory Evolution: The “Amend, Don’t Create” Approach

In contrast, Australia’s policy direction is shaped by a larger, more established regulatory landscape. The Australian Productivity Commission’s interim report on “Harnessing data and digital technology” recommends a growth-focused approach to AI regulation that addresses risks without stifling innovation. This philosophy is encapsulated in the call to “refine and amend” existing rules and frameworks rather than creating new, economy-wide regulations specifically for AI. The Tech Council of Australia (TCA) supports this stance, advocating for balanced, future-focused regulation that prioritizes innovation while ensuring security and responsible technology adoption.  

Australia’s government is simultaneously undertaking generational reforms in other critical areas. The year 2025 will see ongoing reforms to the Privacy Act, new cybersecurity “guardrails,” and a moderation of hyperactive regulation as the government seeks a balance between fostering investment and addressing potential harm. This reformist approach is a practical response to the complexities of a large, mature regulatory system. While the strategy differs philosophically from New Zealand’s new, bespoke AI framework, both nations ultimately seek a similar outcome: to avoid stifling innovation with heavy-handed prescriptive rules. This reveals a fundamental difference in governance agility; New Zealand’s smaller size allows it to implement a clean, new strategy, whereas Australia’s scale necessitates a more intricate process of adapting its existing legal and regulatory architecture.  

The role of government also differs in its execution. The Australian government’s Digital Transformation Agency (DTA) employs an Investment Oversight Framework (IOF) to ensure digital and ICT investments are strategic and aligned with government objectives. While this provides a cohesive, whole-of-government approach, it is more focused on oversight and governance than on the hands-on public sector leadership that New Zealand is using to build confidence for private sector adoption.  

The AI Imperative: From Cautious Adoption to Strategic Investment

The differing policy frameworks across the Tasman are reflected in a palpable contrast in business sentiment and investment in artificial intelligence. While both nations recognize AI as a critical transformative force, their immediate priorities and levels of commitment vary significantly.

New Zealand’s Trust Gap and Efficiency Focus

The PwC New Zealand Annual CEO Survey 2025 reveals a paradoxical cautious optimism among business leaders. A notable 47% of New Zealand CEOs believe that AI will increase their company’s profitability within the next 12 months. This short-term belief in AI’s potential for financial returns stands in stark contrast to their long-term perspective; only 13% of these same CEOs consider AI to be “extremely important” for their future business success.  

A key factor underpinning this disconnect is an identified “AI trust gap.” Less than a third (28%) of local CEOs express a high degree of trust in integrating AI into their business practices. This low level of confidence explains the gap between short-term tactical belief and long-term strategic commitment. Without a high degree of trust, businesses are reluctant to make the large-scale, transformative investments required to fully embed AI across all functions. The focus remains on short-term, demonstrable wins for operational efficiency and “reinvention” rather than a foundational shift. This commercial-level focus on quick wins mirrors the government’s “adopter nation” policy, reinforcing a national philosophy of implementing proven, low-risk solutions. This emphasis on practical application is also evident in the CIO Summit’s focus on leveraging “Agentic AI, automation, and analytics to transform their organisations”.  

Australia’s Strategic Investment and Worker Optimism

Australia’s enterprise sector, in contrast, is moving with greater speed and conviction. The nation’s IT spending is projected to reach AU$147 billion in 2025, driven by a strong focus on modernizing legacy infrastructure and reducing workforce inefficiencies. The shift from AI experimentation to strategic implementation is well underway, with 57% of Australian organizations ramping up AI-related investments.  

This high level of enterprise investment is supported by a more optimistic workforce. A new report from the Tech Council of Australia (TCA) indicates that Australian workers are embracing AI and are optimistic about its impact in the workplace. Scott Farquhar, the Tech Council Chair, has called for “Bold National Action on AI” to drive productivity. This collective readiness, from government policy to corporate investment and worker sentiment, creates a more cohesive environment for large-scale digital transformation. While both countries are focused on AI’s productivity potential, Australia appears to be approaching it with a more integrated, all-in strategy, while New Zealand’s approach is more cautious and piecemeal.  

The Talent Tussle: Bridging the Skills Divide

A pervasive and critical challenge facing both New Zealand and Australia is the persistent skills shortage. This issue serves as a foundational impediment to digital transformation, innovation, and economic growth, directly impacting each country’s ability to capitalize on its tech ambitions.

A Shared Challenge with Nuanced Consequences

The Hays 2025 Skills Report, which surveyed hiring managers and professionals across both countries, reveals a shared pain point: 85% of hiring managers in Australia and New Zealand report skills gaps that negatively affect their team or organizational performance. The most significant shortages are in hard/technical skills (57%) and critical thinking/problem-solving (50%), with a widespread shortage of professionals in cybersecurity, cloud, AI/ML, and enterprise applications. The inability to secure this talent is delaying transformation programs, particularly in government and regulated industries.  

For New Zealand, this shared challenge is compounded by a specific national issue: a persistent “brain drain”. The economy has struggled to retain its skilled professionals, who are often lured by opportunities abroad. This outflow of talent exacerbates the skills gap and creates a negative feedback loop, limiting the country’s capacity to fully capitalize on its innovative potential and hindering its ability to attract large-scale foreign investment.  

Strategies to Bridge the Gap

In response to the talent crisis, hiring managers in both countries are rethinking traditional recruitment practices. An overwhelming 86% of them are adopting skills-based hiring, focusing on a candidate’s capabilities rather than just formal qualifications, although challenges remain in identifying and assessing those skills.  

Governments on both sides of the Tasman are also actively addressing the issue through policy and funding. The New Zealand Budget 2025 has set aside funds to promote foreign investment and help startups attract and retain skilled staff. The objective is to make the country a more attractive destination for capital, migrants, and “digital nomads”. Australia has similar policy priorities, with the Tech Council of Australia highlighting skilled migration, workforce development, and education reform as key focus areas for 2025.  

A paradoxical finding from the Hays report is a potential disconnect between corporate strategy and workforce development. While companies are ramping up AI investment to boost efficiency, the survey found that professionals themselves ranked new IT/tech skills (58%) as a top priority but placed Generative AI skills at the bottom of the list (30%). This suggests a potential “value gap” where the workforce may not yet be aligned with the strategic AI investments of their employers. For New Zealand, where fewer than a third of CEOs are planning to incorporate AI into their workforce and skills strategies , this poses a particular risk to the long-term success of its digital transformation agenda.  

The Innovation Engine: A Tale of Two Sectors

Beyond the macro-trends, a more detailed comparison of New Zealand and Australia reveals a fascinating division of labor in their respective innovation engines. Each nation has cultivated a globally significant specialization, demonstrating that their strengths are not in direct competition but are instead complementary.

New Zealand’s Agritech Advantage

New Zealand has carved out a global leadership position in agritech. The nation’s ability to “do more with less” is evident in the fact that its smaller agritech network has denser and more connected linkages to the United States market, the world’s largest agritech market, than its Australian counterpart. This cohesive, interconnected ecosystem, which benefits from organizations like Agritech New Zealand, has generated visibility in key capital markets and positions the country as a world-class testbed for agricultural innovation.  

The country’s strength is exemplified by leading startups that are tackling global challenges with local ingenuity. Halter is revolutionizing dairy farming with GPS-enabled smart collars for remote cow management. BioLumic is a pioneer using UV light treatments to enhance crop yields and resilience. And Robotics Plus is addressing labor shortages with automated solutions like robotic apple packers and autonomous vehicles. Furthermore, New Zealand is actively attracting international innovation, with programs like the Land x Launch™ cohort bringing in global agritech startups to localize and validate their technologies.  

Australia’s Fintech Powerhouse

Australia has a well-established global reputation in fintech, a sector where it has demonstrated an ability to compete on a global scale. The nation ranks as the sixth-largest fintech hub in the world and the second in the Asia-Pacific, with over 800 active fintech companies. Sydney alone serves as a dominant hub, home to 60% of the country’s fintech startups. The country is also recognized as the world’s third-largest regtech hub.  

A key enabler of this success is Australia’s advanced digital infrastructure. The launch of the New Payments Platform (NPP) in 2018 created a real-time payments ecosystem that has already unlocked nearly US$1 billion of additional economic output. This foundational layer of financial infrastructure provides a critical competitive advantage, allowing the fintech sector to innovate and scale in a way that is not possible without real-time transaction capabilities. While New Zealand boasts advanced mobile and fixed broadband speeds , it still lacks a formal real-time payment scheme, a gap that places it in a “catch-up” position and potentially limits the scale of its own fintech ambitions. The success of Australia’s fintech sector, built on foundational infrastructure, offers a clear lesson for its trans-Tasman neighbor.  

The relationship between these two specializations is not merely competitive. As noted by the United States Study Centre, a strong trans-Tasman region is in the best interest of both countries. Global investors, particularly those in San Francisco, London, or Singapore, want to see a cohesive, high-performing region, and the success of one country in its niche strengthens the entire regional proposition for inbound venture investment.  

Investment, Infrastructure, and the Path Forward

The final chapter of the trans-Tasman tech story in 2025 is told through the lens of investment and the underlying digital infrastructure. A complex climate of global uncertainty and elevated interest rates has created a subdued venture capital environment, yet each country’s response to these challenges reveals a path forward.

The Venture Capital Climate: Subdued but Strategic

The venture capital market in both Australia and New Zealand remained subdued in the first half of 2025, with a decline in deal flow in Australia from previous years. Broader market uncertainty and a more risk-averse investor appetite have contributed to this decline, leading to a renewed focus on slowing cash-burn and achieving a clear path to profitability. This shift from a “growth-at-all-costs” mentality to a more sustainable, value-driven model indicates a maturing ecosystem on both sides of the Tasman.  

The environment is not without its opportunities. In Australia, capital is becoming more concentrated, flowing more rapidly and at higher multiples to tech startups that are developing innovative AI solutions. The report by the Tech Council of Australia notes that this concentration is a sign of a more strategic approach to investment. In New Zealand, while the VC market is also subdued, private equity-backed transactions are expected to ramp up in 2025, supported by the new government’s pro-growth policy platform and a more welcoming foreign investment regime.  

The Digital Backbone: Connectivity and Gaps

The digital infrastructure of both nations is generally robust and advanced. New Zealand’s internet penetration stands at 96.2% of the population, with median fixed internet download speeds of 180.04 Mbps. Its international connectivity has been diversified and improved through new subsea cables, with Google’s Pacific Connect Initiative set to add a faster connection between the two countries by 2026. However, as noted previously, the absence of a formal real-time payments scheme in New Zealand remains a significant gap in its core financial infrastructure. While its neighbors have a developed, real-time ecosystem that has created significant economic value, New Zealand is still playing a game of catch-up.  

Conclusion

The analysis of the trans-Tasman tech landscape in 2025 reveals a powerful narrative of parallel yet distinct development. Australia is positioned as an established powerhouse, with the regulatory maturity and market scale to lead in sectors like fintech. Its strategic investment in enterprise technology and a reformist policy agenda are creating a robust environment for innovation. New Zealand is emerging as a nimble specialist, leveraging its agility to adopt proven technologies, champion deep-tech sectors like agritech, and embed a unique, principles-based approach to technology governance.

The greatest opportunity for the future lies not in competition but in a collaborative, complementary partnership. The shared challenge of a persistent skills shortage and the current subdued venture capital climate are regional problems that cannot be solved by a single country alone. The call from the United States Study Centre for “mutually-beneficial initiatives” is a blueprint for the future of the trans-Tasman tech relationship.  

By working together, both nations can attract a wider pool of international investment and talent. Australia can learn from New Zealand’s hands-on approach to public sector AI adoption and the unique integration of cultural values into its tech framework. At the same time, New Zealand can benefit from Australia’s experience in regulatory reform and accelerate its development of critical infrastructure, such as a real-time payments platform, to support its scaling startups.

The future of technology in the region is not a competition to be won by a single nation but a collaboration to be capitalized upon by a dynamic and complementary partnership. By focusing on their respective strengths and addressing their shared challenges together, New Zealand and Australia are poised to secure a dominant position as a cohesive tech hub on the world stage.