by Felix Scholz, AI Strategist at academyEX
New Zealanders appear to be very ready for the AI age. In March this year Anthropic reported that New Zealand ranked eighth globally for Claude.ai usage relative to population.
We are using it heavily for coding, education and research. The IMF also ranks New Zealand in the top ten globally for AI preparedness, supported by strong human capital and regulatory quality (Anthropic, 2026; IMF, 2026).
That sounds like a country positioned to benefit from one of the biggest technology shifts in decades. But there is another set of numbers. Unfortunately.
The World Intellectual Property Organization ranks New Zealand 22nd for innovation inputs but only 34th for innovation outputs. We fall further to 41st for knowledge and technology outputs. WIPO’s conclusion is unusually direct: New Zealand produces fewer innovation outputs than would be expected from its level of innovation investment (WIPO, 2025).
Then there is productivity. In 2023 New Zealand ranked 31st out of 38 OECD countries for GDP per hour worked. The Treasury describes our productivity performance as stubbornly resistant to attempts to improve it (New Zealand Treasury, 2026).
In the 2026 IMD World Competitiveness Ranking New Zealand sits 37th. Australia is 17th. Ireland is 7th. Denmark is 6th (IMD, 2026).
There is a pattern here.New Zealand has ideas. We lack the pipeline that consistently turns those ideas into economic output.
From knowledge to output
Ray Dalio’s work on the rise and decline of nations provides a useful way to think about this. His model looks at 18 determinants of national strength. Among the eight most important are education, competitiveness, innovation and technology, economic output and world trade.
These are not independent capabilities. Dalio’s historical argument is that education helps drive innovation and technology which contributes to competitiveness, output and eventually trade (Dalio, 2024).
New Zealand is relatively strong at the beginning of this chain. WIPO ranks us sixth globally for institutions. We are 23rd for human capital and research. We rank 15th for scientific and technical articles relative to the size of our economy.
But somewhere between creating knowledge and turning it into economic value the system loses momentum.
We are 50th for patents by origin. We are 50th for production and export complexity. We are 61st for high-tech exports. Most strikingly we rank 90th for WIPO’s measure of knowledge impact. (WIPO, 2025)
Knowledge is entering the system.
Ideas are being generated. Too little is making the full journey into intellectual property, scalable businesses, productivity and exports. That is the conversion gap.
Others have built the pipeline
Denmark is not a perfect comparison. No country is. But it is useful because it is another small advanced economy that has to compete internationally.
Denmark invests around 3% of GDP in R&D. New Zealand invests around 1.55%. The OECD average is about 2.7%. Denmark also ranks ninth globally for university-industry R&D collaboration and produces about 7.7 patents per billion dollars of PPP-adjusted GDP. New Zealand produces 1.1 (OECD, 2026; WIPO, 2025).
The difference is not simply spending more money.
Denmark has built structures that keep capital behind ideas for longer.
One unusual feature is its industrial / commercial foundations (aka foundation-owned companies). These are not simply charitable foundations. They are non-profit entities that own controlling stakes in commercial companies. They can help protect companies against takeovers, retain productive assets and reinvest profits with a longer time horizon.
In 2022 Denmark’s 1,291 foundation-owned companies accounted for around a quarter of total Danish value added. They spent almost DKK 38 billion on R&D, equal to 1.3% of Denmark’s entire GDP (OECD, 2026b).
That is long-term investment horizon and ownership at significant scale.
And we can see what conversion looks like in Denmark’s pharmaceutical sector.
Years of science and research feed sustained R&D. R&D creates intellectual property and new treatments. Those treatments go through testing and regulatory approval. Companies invest in production and global commercialisation. Successful products then scale into international markets.
IDEA → RESEARCH → EXPERIMENT → IP → PRODUCT → SCALE → GLOBAL MARKET
The result is extraordinary. The pharmaceutical industry’s share of Danish GDP has risen to around 9% and the OECD estimates it has generated approximately 40% of Denmark’s GDP growth since 2019 (OECD, 2026b).
For perspective New Zealand’s entire food and fibre sector directly contributed about 8.8% of GDP in the year to March 2024 (Ministry for Primary Industries, 2025).
These are not directly comparable industries. But the scale is striking.
Denmark also shows us the danger of getting this too concentrated.
Much of its recent growth is dependent on a small number of very large firms. The OECD describes this as a two-speed economy. A major company failure, relocation or sector-specific shock could materially affect national GDP, investment and tax revenue. Some pharmaceutical production also takes place overseas so strong headline GDP growth does not translate proportionally into domestic employment or wages (OECD, 2026b).
So the lesson for New Zealand is not: We need our own Novo Nordisk. The lesson is: We need a pipeline capable of producing more internationally competitive companies, products and services. More shots on goal rather than dependence on one winner.
Now AI changes the economics
This is where the New Zealand story becomes urgent.
The IMF says New Zealand has strong AI preparedness but specifically warns that low R&D intensity, shallow capital markets and difficulties scaling businesses could limit the gains.
Its conclusion is almost the thesis of this article: structural reform is needed to help New Zealand convert its strong AI preparedness into economic gains (IMF, 2026).
There is another paradox. While New Zealand is eighth globally for Claude usage per capita the OECD says the share of New Zealand businesses using AI remains below the OECD average.
Investment in digital R&D, software, data and design is also low (OECD, 2026). This suggests that enthusiastic individual adoption is not automatically becoming organisational transformation.
That distinction matters. We can use AI to write an email faster. Summarise a report. Prepare a presentation. Analyse a spreadsheet. Automate an existing process.
All of this has value. But if AI mainly makes existing work faster we have not necessarily changed the competitiveness of the economy.
We risk automating stagnation. McKinsey’s 2025 global AI survey points to the same challenge. Nearly two-thirds of organisations had still not started scaling AI across the enterprise. Only 39% reported an enterprise-level EBIT impact.
The organisations seeing the strongest value were more likely to use AI not just for efficiency but also for growth and innovation (McKinsey & Company, 2025).
New Zealand’s AI opportunity is therefore bigger than productivity.
Think like Picasso
Picasso produced more than 20,000 works across painting, drawing, print, sculpture, ceramics and other media. We remember a small number of masterpieces but behind those masterpieces was extraordinary creative volume (The Metropolitan Museum of Art, 2004).
There is research behind the metaphor. Creativity researchers describe the “equal-odds rule”: increasing the quantity of ideas increases the opportunity for high-quality ideas to emerge.
One study of 246 participants found a strong relationship between the number of ideas generated and independently assessed creativity (Jung et al., 2015).
Innovation works in a similar way. If a business develops one new proposition a year it needs that idea to be very good.
What if it could explore 50? What if it could turn 20 into concepts, prototype ten, test five with customers in different markets and scale the two where evidence starts to emerge?
AI dramatically reduces the cost of doing this. Research is faster. Ideation is cheaper. Prototypes can be built in hours rather than weeks. New market propositions can be translated and adapted quickly. Assumptions can be challenged before serious capital is committed.
This does not remove the need for human judgement. It makes it possible to take more intelligent shots on goal. The real opportunity is not just to improve individual ideas. It is to increase the throughput of the whole innovation pipeline.
From ideas to a pipeline
For New Zealand exporters the question should therefore not only be: How can AI make us more efficient? It should also be: How can AI increase the number of things we can discover, create and test?
That requires a different innovation muscle. Not another annual strategy workshop. Not waiting for the perfect idea. A structured funnel where ideas continually enter, experiments are cheap, evidence determines what moves forward and weak ideas are allowed to die quickly. More ideas. More experiments.
More prototypes. More customer tests. More failures.
More learning. More runs on the board.
Ultimately more products, intellectual property and services that the rest of the world wants to buy.
New Zealand already has many of the ingredients. We have educated people, strong institutions, research capability and unusually high amount of enthusiastic AI users.
The missing piece is not the idea. It is the pipeline that turns ideas into outcomes.
IDEA → RESEARCH → EXPERIMENT → IP → PRODUCT → SCALE → GLOBAL MARKET
AI gives us an opportunity to build that pipeline faster and to push far more ideas through it.
That is where the next phase of New Zealand innovation needs to focus. Not only on having better ideas. On converting more of them.
References:
– Anthropic. (2026). Sydney will become Anthropic’s fourth office in Asia-Pacific.
– Dalio, R. (2024). The Great Powers Index: 2024. Economic Principles.
– IMD World Competitiveness Center. (2026). IMD World Competitiveness Booklet 2026.
– International Monetary Fund. (2026). New Zealand: Staff Concluding Statement of the 2026 Article IV Mission.
– Jung, R. E. et al. (2015). Quantity yields quality when it comes to creativity: A brain and behavioural test of the equal-odds rule. Frontiers in Psychology, 6.
– McKinsey & Company. (2025). The state of AI in 2025: Agents, innovation, and transformation.
– New Zealand Treasury. (2026). Strengths in uncertain times: A Treasury perspective.
– OECD. (2026). Foundations for Growth and Competitiveness 2026: New Zealand.
– OECD. (2026). OECD Economic Surveys: Denmark 2026.
– The Metropolitan Museum of Art. (2004). Pablo Picasso (1881–1973).
– World Intellectual Property Organization. (2025).
– Global Innovation Index 2025.