Amazon Web Services’ (AWS) Asia Pacific Cloud Region is set to open in New Zealand in 2024. The company is a subsidiary of Amazon and provides cloud computing platforms. Its featured services range from analytics to cloud financial management to storage.

The Asia Pacific Cloud Region will consist of three Availability Zones (i.e. groups of logical data centres) and will allow New Zealand businesses and public sector clients to store data onshore and leverage single digit millisecond latency (data speed) to serve their customers. The Auckland Local Zone (a type of infrastructure deployment that places compute, storage, database, and other select AWS services close to large population and industry centres) represents an additional investment and will enable access to the cost savings, scalability, and high availability that AWS provides.

The entry of AWS in New Zealand could be game changing for New Zealand businesses and enable significant productivity gains. The investments also serve as a timely reminder of the importance of getting our digital strategy right to facilitate our growth as a nation.

The AWS Pacific Cloud Region alone is worth $7.5 billion over the next 15 years and is expected to contribute $10.8 billion to New Zealand’s gross domestic product and create at least 1,000 jobs. The impact of these gains will be felt widely.

In the near term, there are obvious benefits for the construction sector. Once delivered, digital engineering solutions are set to benefit, including through a greater ability to compute and store digital twin data. With companies like Weta Digital, Air New Zealand and Xero already ‘all in’, the size of AWS’ impact in New Zealand is only likely to grow.

Tiffany Bloomquist, AWS’ New Zealand Country Manager, describes the company’s work as being centred on enabling New Zealanders to impact the rest of the world through innovation and growth. To meet that aim, more than a million New Zealand workers will need new or further technology-related training over the next year alone – some 35% of our workforce.

Bloomquist has signalled they are looking to build skills onshore through AWS education programmes and seek to develop a diverse skills pipeline. She acknowledged that we have the skills here in New Zealand – just not enough. Domestic skills development will be complemented by skilled workers from overseas – buoyed by relaxed borders and the impact of 600 border exceptions announced late last year by the Government to bring in highly skilled and much-needed tech workers while our borders were closed.

In the United Kingdom, IT improvements have been responsible for just under half of productivity growth in recent decades. Here, technology is our third-largest export sector, and it is growing fast. Given our long-standing productivity challenges, these investments serve as a timely reminder of the game-changing nature of technological improvement for our nation.

In 2019, the Productivity Commission highlighted that New Zealand’s ability to maximise productivity gains from the introduction of new technologies will depend on the pace and scale of diffusion overseas, but also on our ability to overcome a track record of poor adoption and diffusion of technology here at home.

To do that, we need a supportive legislative environment and national digital strategy centred on collaboration between government, industry players, and key stakeholders. Technology is only a tool and a ‘more is better’ approach is rather blunt and lacks the strategic foresight to ensure that New Zealand’s digital infrastructure and enabling environment are fit for the future.

With growth as a key pillar, the consultation on the Government’s 2021 discussion document  Towards a Digital Strategy for Aotearoa drew much attention, including Infrastructure New Zealand’s own submission. We then hosted Hon David Clark, Minister for the Digital Economy and Communications at a leaders’ lunch in Wellington. Key takeaways from these processes included a need to develop a flexible and adaptable strategy that engages meaningfully with the inherent uncertainties of planning for technological change. The strategy should be a living document, with a developed monitoring and implementation framework and an acknowledgement of the value of technology for our sector – including in digital engineering solutions and the value of data sovereignty with the introduction of AWS’ initiatives.

A national digital strategy will serve as a powerful lever for shaping a more intelligent and technology-enabled infrastructure system, and AWS’ investments are a testament to our regulatory environment. But to maximise the growth opportunity and to design a digital nation that is fit for the future, we will need to coordinate across the private and public sectors to develop a world-class infrastructure system and the skills, capital and legislation to enable it.