Innovation needs a plus-one and her name is Digital Equity
The New Zealand government has made its priorities clear: we are betting big on artificial intelligence. However, without equal investment in digital access and skills, the government’s AI ambitions risk creating a two-tier digital nation.
In August 2025, a $4 million Catalyst Grant was awarded to develop a mobile, AI-powered platform to detect early cognitive decline in older adults¹. It is just the latest in a string of AI investments, spanning agriculture, health and defence.
“Our AI Strategy is about encouraging the uptake of AI to improve productivity and realise its potential to deliver faster, smarter, and more personalised services, including in healthcare,” says Hon Dr Shane Reti¹.
The promise of AI is real. The new “healthy aging” platform will combine research from New Zealand and Singapore to deliver early detection and actionable insights for families and clinicians. As Angela Edwards, founder of Elli Cares, told eHealthNews, “We are bringing world-class AI research directly into the lives of older adults and their families.”
But here’s the uncomfortable truth: AI is moving faster than access.
While the government funds multi-million-dollar innovation programmes, the digital equity initiatives that make this technology usable for everyday New Zealanders are left to scrape by. Community programmes providing devices, skills training and connectivity, vital for low-income families, rural communities and older adults, typically operate on annual budgets of $200,000 to $500,000²,³. By comparison, a single AI research project receives $4 million over three years¹.
The imbalance risks creating a two-speed digital nation. Those with fast broadband, modern devices and the skills and confidence to use them will be able to access life-changing tools like AI-driven health monitoring. Those without will only see the technology only in headlines.
The return on investment for closing this gap is substantial. A 2022 study commissioned by Spark estimated that the annual benefit of digital inclusion per household ranges from $3,559 to $5,652, and per individual from $1,318 to $3,410¹⁰. With around 130,320 digitally excluded households in New Zealand, the total economic benefit of achieving digital equity is valued at approximately $464 million to $737 million per year¹⁰. These are not abstract gains: they come from improved access to jobs, education, healthcare and government services that reduce costs and increase productivity across the economy.
As of 2025, roughly 20 percent of New Zealanders face barriers to full digital participation, from cost to skills gaps to lack of motivation². Among older adults in aged-residential care, fewer than 10 percent of facilities provide devices for residents, even though over half have internet connections³.
International studies show that digital exclusion compounds health inequities, leaving those without access reliant on slower, costlier, in-person systems⁴.
The Treasury has already acknowledged that the net impact of AI on employment and the labour market remains uncertain. In its 2024 paper, it notes that while AI will displace some jobs and create others, “higher-skilled roles in advanced economies like New Zealand are more likely to be most exposed”⁵. From a digital equity perspective, this uncertainty intersects with existing disparities in access and capability. Workers who lack digital skills face significant barriers to both reskilling and participating in new AI-enabled opportunities. Without deliberate action to close these gaps, AI’s diffusion risks reinforcing a dual labour market: one where well-connected and digitally fluent workers adapt and benefit, while digitally excluded workers are left behind. This further entrenches social and economic inequities.
Research published in 2024 by the University of Otago highlights another concern. The report noted a serious lack of consultation and consideration of Māori perspectives, particularly in relation to how predictive algorithms affect Māori and Pasifika communities⁶. This gap aligns with broader concerns about digital inclusion and the risk that emerging technologies may reinforce existing inequities if Indigenous voices are not meaningfully involved in their design and governance. While the report does not explicitly use the term “digital equity,” the issues it raises are central to a digital equity lens: ensuring that all communities, especially those historically underserved or excluded, have both a say in how digital tools are deployed and the ability to benefit from their use without disproportionate harm.
And yet, funding for digital equity, the work of making sure people can use the technology we develop, remains a fraction of AI’s budget.
Even the government acknowledges the gap. The Digital Inclusion Blueprint, first developed under the Labour Government in 2019, was pulled together by a reference group convened by the Department of Internal Affairs and fronted by then Minister of Internal Affairs, Hon Tracey Martin.
In her foreword she noted: *“Digital inclusion is a building block for innovation. Even basic digital skills and understanding form a strong starting point for lifelong learning and resilience as the technologies around us change. In a world where everyone can participate online, anyone can become a digital creator, innovator and instigator of change”*⁷.
That this older blueprint is still doing the heavy lifting today underscores how limited progress has been since.
Initiatives that address access, affordability, skills and trust remain fragmented and lightly funded. Efforts like Katoa Connect, Digital Seniors, TechMate, library-based learning hubs and device-refurbishing charities often rely on philanthropic or short-term grants.
By contrast, AI investments are now structured as multi-year, multi-million-dollar commitments designed to accelerate research and commercialisation. The new Advanced Technology Institute, announced in July 2025, represents a $231 million commitment over four years⁸. It is important to note, $150.4 million of that funding has been reallocated from other research funds and Callaghan Innovation⁸.
The 2025 Budget also earmarked more than $200 million for tuition and training subsidies and $60 million for STEM and priority areas⁹. We are building a superhighway for innovation, while leaving entire communities stuck on gravel roads.
AI training on its own is useless without broader digital skills. For people to use AI safely and confidently, it must be embedded within comprehensive digital inclusion programmes. Teaching someone to use ChatGPT or Microsoft Copilot only works if they also understand the fundamentals: how to navigate a browser, spot phishing attempts and verify the accuracy of online information.
AI may well define the next decade of public services and private innovation. But if we continue to pour millions into algorithms while leaving thousands of New Zealanders offline, the “AI revolution” will only deepen existing divides.
If the government truly wants AI to transform health, education, and productivity, then funding digital equity must match the scale of AI investment
References
¹ RNZ. “Government unveils its first-ever national artificial intelligence strategy.” 20 August 2025.
² Child Poverty Action Group (CPAG). Material Hardship and Digital Access in New Zealand. 2023.
³ Digital Equity Coalition Aotearoa (DECA). Affordable Connectivity Report. 2024.
⁴ OECD. Digital Inclusion and Health Outcomes. 2022.
⁵ New Zealand Treasury. Artificial Intelligence and the Labour Market: Discussion Paper. 2024.
⁶ University of Otago. AI and Indigenous Communities Report. 2024.
⁷ Department of Internal Affairs. Digital Inclusion Blueprint. 2019.
⁸ New Zealand Herald. “Majority of government’s $231m spend on Advanced Technology Institute funded through planned research funding cuts.” 30 July 2025.
⁹ New Zealand Treasury. Budget 2025: Estimates of Appropriations and Economic and Fiscal Update. 2025.
¹⁰ Spark New Zealand. The Economic Benefits of Digital Inclusion and Connectivity. 2022.
¹¹ Katoa Connect. Community connectivity initiatives.
¹² Digital Seniors. “Helping older people thrive in a digital world.”
¹³ TechMate NZ. Digital skills mentoring programme.
¹⁴ Public Libraries of New Zealand. Digital learning hubs and community access.
¹⁵ Recycle a Device (RAD). Device refurbishment for digital inclusion.
