Put another way, organisations are buying the AI sports car, but most employees still don’t have a driver’s licence.

“Organisations that treat AI literacy as a strategic priority, not a box-ticking exercise, will unlock meaningful productivity gains and long-term competitive advantage.”

AIQ measures the readiness of individuals, teams and organisations to adapt to, collaborate with, trust and generate business results from genAI and other forms of the technology. The Forrester report AIQ 2.0: Employees (Still) Aren’t Ready to Succeed with Workforce AI, finds that only 16 percent of employees achieved a high AIQ in 2025, up marginally from the 12 percent seen in 2024. That’s despite widespread deployment of generative AI tools such as Microsoft 365 Copilot, Google Workspace and enterprise copilots now embedded into daily workflows.

The disconnect matters. JP Gownder, Forrester VP, principal analyst, says the lack of AIQ is becoming a clear bottleneck to productivity and ROI. Employees with low AIQ are slower to adopt AI tools or use them incorrectly, increasing errors, rework and frustration. In many cases, the time and effort required to use AI outweighs the value generated, preventing organisations from reaching the productivity ‘crossover point’ where AI meaningfully improves work outcomes.

Forrester’s AIQ framework looks at four dimensions of employee readiness: Understanding AI, skills and training, confidence and motivation, and ethics, risk and privacy awareness.

While 68 percent of organisations report using generative AI in production applications, only a small minority of employees show a strong ability to work effectively with the tools, with AI skills ‘stagnating’ despite the widespread deployment.

“This slow progress indicates that enterprise AI rollouts are outpacing investments in employee capability, creating a readiness gap that limits productivity gains and increases operational risk,” the research firm says.

Training gaps a key constraint

Training is a major weak spot. Just over half of organisations provide AI training to non-technical staff and fewer than a quarter offer prompt engineering training, which Forrester dubs a ‘foundational skill’ for effectively using tools like Microsoft 365 Copilot and Google Workspace.

The report dubs a ‘mere’ four-point gain in the percentage of individual contributes who said they received formal training as a ‘shocking lack of progress’. “It’s clear that employers haven’t stepped up to enable their employees through learning initiatives.”

It notes that GenAI tools are probabilistic, rather than the deterministic computing we’re used to. Where with deterministic tools the same input produces the same output each time, following fixed rules and logic, with GenAI’s probalistic outcomes ‘we don’t know exactly what they’re going to say and do’, Forrester says. That changes how employees must work with technology, requiring them to understand that AI outputs are suggestions, rather than definitive answers and making the need to know when to question the output of AI ‘crucial’.

There’s also the human factor. Many employees still worry AI will replace their jobs, even though Forrester’s forecasts show limited job displacement to date. Poor communication and vague messaging about AI’s role are fuelling anxiety, reducing trust and quietly sabotaging adoption efforts.

Gaps in employee confidence and motivation are also highlighted. Only 37 percent of employees report feeling confident in adapting to AI-driven work and fewer than half are motivated to build AI-related skills.

Ethical readiness is another area of concern with just 44 percent of employees feeling confident using AI responsibly and ethically. Forrester warns these gaps increase organisational risk, particularly as AI is increasingly used in customer-facing, decision-making and regulated environments.

“Employers aren’t giving their people the skills, understanding or ethical grounding they need to succeed with AI,” Gownder says. “Our research shows most organisations are rolling out AI tools without investing in employees’ ability to use them effectively.”

Here’s how to close the AIQ gap

The good news is the research is equally clear on what works. High-performing organisations treat AI literacy as a capability to be built over time, not a one-off training exercise.

“To close the gap, businesses must move beyond surface-level training and build continuous, hands on learning that demystifies AI, addresses employee concerns and develops real capability,” Gownder says. “This isn’t about replacing workers – it’s about enabling them to work smarter with AI.”

Formal learning plays a surprisingly small role in raising AIQ, with linear training quickly forgotten, Forrester says. Organisations making progress are investing in continuous learning models that combine formal instruction with practical, hands-on experience. This allows employees to apply AI skills directly within day-to-day work and build capability over time. “Better is a weekly email with tips, videos and best practices form inside your organisation and ideally inside your division.”

Social learning – with weekly office hours with a subject matter expert – are also key. Approaches such as AI champions programmes, shared experimentation and peer support networks have been shown to be more effective than traditional training alone. These models help reinforce learning and support sustained adoption across teams. Middle managers need to signal with their attendance the behaviour they want to see from direct reports. Online discussion forums offering real-time help and testimonial videos of successes and failures from within your organisation have more legitimacy, Forrester says, than bland, online training.

Third, organisations need to ensure training reaches non-technical employees, who make up the majority of the workforce using generative AI tools. Practical training in areas such as prompt development and use-case application is critical to improving baseline AI capability.

Forrester also highlights the need to address employee concerns and build confidence. Clear communication about how AI will be used, what it will and will not automate, and where human judgement remains essential can reduce anxiety and support adoption.

Finally, the report stresses that ethical, risk and privacy considerations must be integrated into workforce AI education. Employees need guidance on responsible use, particularly as AI systems are embedded into sensitive and regulated workflows.

Forrester’s conclusion is clear: Technology deployment, as is so often the case, is not enough on its own. Without corresponding investment in employee readiness, organisations will struggle to realise the full benefits of workforce AI.

“The organisations that treat AI literacy as a strategic priority, not a box-ticking exercise, will be the ones that unlock meaningful productivity gains and long-term competitive advantage,” Gownder says.

The post Low AIQ slows enterprise AI returns appeared first on iStart keeping business informed on technology.

New research shows more than half of ASX-listed boards have no directors with STEM expertise – a gap that has barely shifted in 15 years. The research, published in the Journal of Accounting Literature, shows Australian boards are more comfortable reading balance sheets than code, despite years of digital transformation and the rapid arrive of generative AI.

“Firms with greater STEM board expertise are associated with higher levels of innovation investment and firm value.”

The study, STEM Expertise in Australian Boardrooms: Trends and Impact on Firm Outcomes,  examined the backgrounds of directors at the top ASX-listed companies in 2007 and 2022. Over that 15 year period, the share of board seats held by directors with STEM (science, technology, engineering and mathematics) expertise rose from 8.4 percent to just 12.9 percent. More than half of those boards had no STEM-qualified directors at all by 2022.

Meanwhile directors with background in accounting, banking and law filled around 42 percent of board sets, with former CEOs and other c-suite executives accounting for a further 35 percent. Even in sectors with a high level of technical and innovative activities, such as IT, the materials sector and healthcare, STEM directors were outnumbered by directors with financial and executive expertise, with 27 percent of IT and materials boards comprised of STEM directors, and 24 percent of healthcare.

It’s a trend also seen in the Australian Institute of Company Director’s 2025 Board Diversity Index, which showed Australian boards were continuing to appoint a ‘significant proportion’ of people with accounting and financial background – with just 7.7 percent having a tech background.

In short, the boardroom remains dominated by financial and governance specialists – a structure that has proven stable, consistent and not especially technical, or innovative.

Innovation and value benefits

According to the research, co-authored by Natalie Elms and Aeshesha Weerasinghe from Queensland University of Technology and John Nowland from Illinois State University the lack of STEM expertise does have an impact on business both in terms of investment and value and in limiting cyber risk exposure.

“Firms with greater STEM board expertise are associated with higher levels of innovation investment and firm value,” the research article says. “These effects are strongest in firms without STEM CEOs and in industries with lower STEM representation.”

When STEM representation exceeded 26 percent, companies were found to have invested significantly more in innovation than those where STEM expertise was below 25 percent.

The trio argue that appointing directors with STEM background may offer a competitive advantage, and recommends policies and initiatives to expand the supply of STEM directors.

The findings arrive as boards face rising accountability for technology-driven decisions, from AI investments to cyber resilience and data governance. Directors are expected to test management assumptions, evaluate technology risk and sign-off on digital strategy, even if many have never worked directly with the systems being discussed or with modern software systems.

“In Australia, the need for boards to leverage digital technologies and oversee technological risks has become a pressing issue. A national survey of corporate directors shows that 21 percent of organisations have no digital transformation strategy, while 41 percent report that fewer than one-quarter of their board members possess technology skills, and 13 percent have no technology skills.”

At the same time, cybersecurity, cyberattacks, data governance and staff technology capabilities have been identified as among the most critical risks organisations are facing, with directors in the firing line of regulators for failing to prepare and respond to cyberattacks appropriately.

“Directors with expertise in STEM are particularly well positioned to influence technology-driven innovation and, consequently, firm value.”

The study links this skills gap directly to measurable outcomes – ‘a positive and significant relationship’ between the number of STEM directors and corporate innovation investment. “This suggests that, although STEM directors comprise only a small percentage of the total director pool, their influence on innovation is significant.”

While not arguing for replacing accountants with engineers – financial, legal and governance skills remain fundamental for all businesses – the researchers note that without sufficient technical expertise, boards may struggle to interrogate major technology investments, assess risk trade-offs or challenge management assumptions, particularly in fast-moving areas like AI. (The report looked at 2022 director details, pre-dating the AI surge of the last few years.)

“Their cognitive capacities and technical expertise enable STEM directors to identify, assess, and respond to technological opportunities and risks, thereby enhancing their advisory and monitoring roles in relation to innovation and technology strategies.

“This is supported by our results, which show a positive and significant association between STEM director representation and both corporate innovation investment and firm value. Notably, these effects are strongest in firms without STEM CEOs and in industries with lower overall STEM representation, suggesting that STEM directors help fill a critical gap in firms’ innovation strategy and capabilities.

Kiwi mirror

New Zealand boardrooms appear to be grappling with a similar tension. The New Zealand Institute of Directors’ Director Sentiment Survey 2025 shows technology and AI have moved firmly into the governance mainstream, with 38.5 percent of directors identifying AI and digital acceleration as a top strategic issue and more than 60 percent of boards working with management on how technology can lift productivity.

At the same time, confidence in capability is lagging ambition. Fewer than half of New Zealand directors believe their board has the right skills to manage increasing business complexity and risk. The survey also shows easing attention to formal board evaluation and skills review, even as expectations around digital oversight accelerate.

The New Zealand IoD does not prescribe professional backgrounds for directors and the survey does not single out STEM expertise. However, a 2019 survey, cited by the New Zealand Institute of Directors, found just three percent of directors surveyed had science or technology expertise and the data highlights a widening gap between what boards recognise they need to govern and how confident they are that current capability matches that task.

The STEM Expertise authors stop short of calling for quotas or wholesale board upheaval. Instead, they argue for expanding the pipeline of board-ready directors with STEM backgrounds and recognising technical expertise as a governance asset, rather than a specialist add on.

For now, the numbers tell a simple story. Technology is shaping company performance faster than board composition is adapting.

The post Why boards still struggle with tech leadership appeared first on iStart keeping business informed on technology.

AppWrap April 2026

16.04 Apple has granted Australian law enforcement access to user notification data for the first time. InformationAge reports a transparency report shows four push token identifiers were sought across two of the requests, with one push token request granted.

16.04 South32 Aluminium is suing Siemens alleging missing code in a programmable logic controller led to a steam turbine generator overheating and being ‘effectively destroyed’, ITnews reports.

15.04 Travel giant Booking.com has notified an unknown number of customers about a data breach which has seen hackers steal customer data. BBC reports some customers have contacted it saying they have already started receiving suspicious messages. Booking.com has declined to say how many people are affected or in what regions.

09.04 Canva has acquired Australian AI tool Simtheory and Australian marketing automation company Ortto for undisclosed sums. Canva says the deals will take it from a design tool to an ‘end-to-end’ work system and strengthen its AI capabilities, 9news reports.

09.04 Bendigo and Adelaide Bank will cut its tech and business operations teams after signing two major tech deals with Infosys and Genpact outsourcing some tech and business management capability. The cuts will save the business at least $65 million yoy, by the 2028 financial year AFR reports. It adds hundreds of roles are likely to be affected.

03.04 Artemis II astronauts experienced Microsoft Outlook failures shortly after launch, with Mission Control called in to remotely troubleshoot the issue. Commander Reid Wiseman reported that two instances of Outlook were running simultaneously on his Surface Pro, leaving both unresponsive, Mashable reports.

02.04 The ATO has launched an in-app security feature enabling users to confirm, in real-time, that they are speaking with the real ATO not a fraudster. Almost 7,500 ATO impersonation scams were reported in July 2025 alone, with impersonation scams peaking during tax time, the ATO says.

01.04 SpaceX has filed confidentially for an IPO according to reports, which say the company is committed to debuting in June, with Elon Musk aiming to raise US$50b-$75b. The NYTimes reports SpaceX values itself at more than $1 trillion and would be one of the most valuable companies to reach the stock market.

01.04 Oracle is cutting thousands of jobs from its 162,000-strong workforce, with 10,000 believed to have lost their job so far. Senior engineers, architects, operations leaders, program managers and technical specialists are among those affected, the BBC reports. Around 10,000 people are believed to have lost their jobs so far. It is unknown if the cuts are related to Oracle’s heavy AI spend.

01.04 The Federal government has signed a new MoU with Anthropic to build on the national AI plan launched in late 2025.

AppWrap March 2026

31.03 eSafety has flagged Facebook, Instagram, Snapchat, TikTok and YouTube for compliance issues with the Australian Social Media Minimum Age obligation and is gathering evidence to inform potential enforcement action, it says.

26.03 Meta and Google have lost a landmark US case, with a Los Angeles jury finding the two companies negligent for designing social media platforms that are harmful to young people. Reuters reports the jury found Meta liable for damages of US$4.2 million, with Google liable for $1.8m in the case of a US woman who sued Meta and YouTube over her childhood addiction to social media.

25.03 Delaying public disclosure of serious cyberattacks on critical infrastructure operators ‘to prevent disclosure from compromising national security’ is one of five changes proposed in a Department of Home Affairs consultation paper for amended Security of Critical Infrastructure (Soci) rules. Other reforms in the paper include changes to make it easier for the government to restrict multiple entities from using high-risk vendors or technology and clarity around the threshold for issuing a direction.

25.03 Canva has acquired Melbourne-based digital out of home advertising company Doohly in a $30m deal which adds outdoor advertising to its offering. The deal is the design company’s third acquisition this year and comes just a month after it bought US startup Mango.AI and the UK’s Cavalry notes StartupDaily.

24.03 Silicon Quantum Computing has secured $20m from the National Reconstruction Fund to support scaling of its quantum processing units and Watermelon machine learning system, SmartCompany reports.

19.03 The X Money payments service, Elon Musk’s attempt to build a ‘everything app’ will enter early public access in April. Musk’s ambitions for the embedding payments into X are broader than most Western tech companies, notes PaymentsIndustryIntelligence, with Musk talking about a system that could eventually encompass savings, payments, securities and other financial activity, reducing reliance on traditional banking channels. At launch X Money is expected to offer core wallet and payment functions, including the ability to move funds within the platform.

18.03 An attempt by the CEO of US videogame publisher Unknown Worlds to wriggle out of paying a US$250m performance has suffered a setback after the court documents showed Changhan Kim asked ChatGPT how to avoid paying the bonus. InformationAge reports Kim engaged the chatbot to draft a corporate takeover strategy, which involved stymieing the release of the highly anticipated Subnautica 2. Following ‘guidance’ from ChatGPT he also posted public ‘critical messages’ on the company website.

17.03 Google has reportedly paused plans for a $20b AI and data centre hub, warning the federal government that high taxes could cause the country to miss out on investment. DatacentreDynamics reports the company has told government it is concerned that if it set up such a hub in Australia, the ATO would consider it a ‘permanent establishment’ exposing it to a 30 percent corporate tax rate. Google is currently exploring where to establish the major APAC hub.

16.03 AI disruption is causing Australian software companies to make big job cuts, with private tech companies expected to follow in the footsteps of Atlassian and WiseTech with redundancy rounds, valuation cuts and a bottleneck for public listings, AFR reports.

12.03 Atlassian is cutting around 1,600 jobs – or 10 percent of its workforce. The company says the move is to ‘self-fund further investment in AI and enterprise sales’, while strengthening its financial profile, Forbes reports. The retrenchment will cost between $225m-$236m.

11.03 Professional body CA ANZ says it will investigate the failure of an external exam delivery platform after more than 1,300 students were locked out of one exam and another 60 experienced delays of up to 40 minutes on a second exam. CA ANZ blamed a failure in an external exam platform operated by a third-party provider.

11.03 US medtech giant Stryker has been hit by a major cyberattack, with an Iran-linked hacking group claiming responsibility, saying it is in retaliation for the killing of more than 170 people – mainly schoolgirls – in a strike on a school, and warning it marks the beginning of a new chapter in cyber warfare, Al Jazeera reports. The group says it has seized 50TB of Stryker data in the attack which it says has erased data from 200,000 devices.

10.03 Anthropic is opening a Sydney office and hiring a local team. The company says Australia ranks fourth globally in Claude.ai usage, relative to population, with strong demand from local business. It says it plans to deepen engagement with Australian institutions and collaborate on projects that advance the country’s national interests and priority sectors. It is also exploring opportunities to expand compute capacity in Australia ‘given our longstanding belief that democracies should lead in AI development’. The company is currently suing the US government over its claims that Anthropic is a ‘supply chain risk’. The row erupted after Anthropic refused to all US military to have unfettered use to its AI tools.

05.03 Privacy Commissioner Carly Kind is warning Australian organisations that a recent ruling allowing Bunnings to use facial recognition is not a green light for the technology. Kind, who says she has not filed an appeal of the Administrative Review Tribunal finding, which overturned her ruling against the technology, says the decision shows the law allows for the balancing of competing interests – privacy vs public safety – but entities will need to conduct a detailed risk assessment specific to their circumstances before deploying the technology. “Retailers should view the decision as a useful case study, rather than a green light for deployment of biometric technologies,” she says.

AppWrap February 2026

27.02 Commonwealth Bank has called in the police and corporate regulator over concerns $1b in home loans were obtained fraudulently, including with AI-created documents. AFR reports the bank reported itself to police and the regulator after a review of the compliance practices and customer lending documents, which stepped up following revelations about the Penthouse Syndicate, which allegedly defrauded NAB of around $150m. Increasingly sophisticated AI has made it easier to create authentic looking false documents and to steal identities.

26.02 Nvidia has posted blockbuster quarterly results of US$68.1 billion – up 73 percent year on year and well above analysts’ forecasts. Revenue from the data centre division, which sells the chips used to train and run AI models was up 75 percent yoy to $62.3 billion, the company says.

25.02 Australian logistics software company WiseTech is cutting around 2,000 jobs – nearly a third of its global workforce in a restructure focused on using genAI to increase efficiency in software engineering and support, Reuters reports.

25.02 Australian Peter Williams has been jailed for seven years for selling critical software and information related to cybersecurity to a broker with ties to the Russian government. Williams was working in the US. 9News reports the tools were cyber-exploit components which can be used to identify weaknesses in tech systems or infect them with viruses.

24.02 The federal government has scrapped a permanent AI advisory board appointed to develop AI guardrails. ABCnews reports the body, funded in the 2024 Budget, was scrapped only months after spending $188,000 and more than a year whittling down a list of experts to a shortlist of 12 nominees. The government says it will instead establish an AI safety institute early this year.

25.02 Commonwealth Bank is spending $90 million to get staff ‘AI-ready’. The bank says the program will help employees ‘build skills, find new opportunities and get ahead of the changing nature of work’. AI learning has already been delivered to 30,000+ staff.

24.02 The ASD has publicly released its Azul open-source malware analysis tool to help safely handle and analyse malware. Azul is designed for large-scale malware analysis and is designed to be highly scalable and store tens of millions of samples, ASD says, adding it can turn common analysis steps into analysis plugins which can be used as part of an automated workflow and assist in identifying variants of a malware family more efficiently.

18.02 Xero is restructuring with 250 jobs on the line – including in Australia. The company is creating around 280 roles in Canada as part of the restructure, BusinessDesk reports [paywalled].

18.02 YouTube suffered an outage from around 11.50am AEDT, with a spokesperson for Google saying an issue with the recommendations system prevented videos appearing.

18.02 The federal opposition has unveiled a new-look shadow ministry under Angus Taylor, with Victorian senator Sarah Henderson appointed shadow communications and digital safety minister. ABCnews reports Casey MP Aaron Violi has been promoted to the outer shadow ministry with a broad portfolio including science, technology, cyber security and the digital economy. Deputy Liberal Leader Jane Hume will be shadow minister for employment and industrial relations as well as productivity and deregulation.

18.02 Australian company Terram Astra has set its sights on a US$10m seed capital raise for a new sovereign ground-based infrastructure platform designed to strengthen communications resilience, defence readiness and space safety across the region. Manufacturers’ Monthly reports Terram Astra’s first hub is located near Alice Springs.

17.02 Highly sensitive Australian court files have been accessed by a foreign entity based in India, an ABCnews investigation has revealed, with Greens senator David Shoebridge saying access to the cases by foreign entities is ‘a national security risk’. The investigation showed Canada’s VIQ Solutions, which employs transcribers in Australia, has also subcontracted work to an Indian company specialising in automated voice-to-text technology, in breach of the VIQ contract. Thousands of court files were accessed by e24 staff with Indian email addresses.

16.02 Federal government entities are failing to report cyber incidents to the Australian Signals Directorate. InformationAge reports just 35 percent of the 200 government entities said they reported at least half of all cybersecurity incidents observed on their networks.

11.02 Service NSW has started testing a new system enabling residents to verify who they are in a single step when interacting with state government services online. ITnews reports initially the digital ID system will be used with a limited number of services, starting with a state toll rebate scheme.

06.02 Australian-founded AI data centre startup Firmus Technologies has secured another $100m to expand its local data centres. The funding, from ASX-listed Maas Group means the company, which is Singapore-based, has raised more than $900m in less than five months, StartupDaily reports.

06.02 CommBank says it has become the first bank to disclose how it is ideating, developing, deploying and managing AI at an organisational level, including ‘practical examples’ of AI in action across the business. Those examples include AI to protect against fraud and scams, strengthen cyber security, enhance customer experience and detect abuse in transaction descriptions.

05.02 Atlassian’s revenue for the quarter to December 31 was up 23 percent to US$1.58 billion, with cloud revenue growing 26 percent providing the company with its first $1b cloud revenue quarter. However, net loss also grew from $38.2m to $42.6m. Operating loss was down from $57.5m to $47.7m the company says. CEO Mike Cannon-Brookes dubbed the quarter ‘fantastic’, adding: “We’re building a bloody great business.”

03.02 The federal government has rejected a bipartisan proposal which would have allowed a parliamentary committee to cancel large consultancy contracts, saying its own reforms are doing the job. A centralised register for conflicts of interest breaches has also been ruled out.

03.02 Australia’s STEM capability is facing a ‘severe crisis’ as a result of flatlining Commonwealth funded research, Science and Technology Australia says. In a pre-budget submission it says Stem research must stop being viewed as a cost and instead be seen as an investment. It says 47 percent of Stem professionals are considering leaving their current roles, with 33 percent planning to leave the sector altogether.

03.02 Xero says more than two million subscribers are using its full AI features, with more than 300,000 using its newer GenAI features. In a market update today the company claimed customers are saving around 22 hours a month using bank feeds and automated actions, with more than 12 percent using AI Insights.

03.02 Kiwi AI startup Teacher’s Buddy has raised $2.3m in trans-Tasman seed funding. The offering aims to reduce teacher workloads, helping with marking and student report writing and producing customised, differentiated curriculum-aligned teaching and assessment materials  The company says the funding was led by Auckland’s Soul Capital and Australia’s Giant Leap.

02.02 Victoria has set its sights on being Australia’s AI capital with the launch of an AI Mission Statement setting out the Allan government’s plans across six key pillars of investment attraction and adoption, data centres and digital infrastructure, local innovation, products and services, talent and workforce, ethical AI use and public sector adoption. The plan includes a $8.1 million Digital Jobs – AI Career Conversion program to safeguard jobs in industries at risk from AI, upskilling workers to transition into AI roles and become specialists in the technology.

AppWrap January 2026

27.01 Airwallex boss Jack Zhang says the fintech is at least two years away from a public listing, despite regular references to an IPO in 2026. Zhang’s comments, reported in StartupDaily, follow news last week that Austrac has ordered an audit of the company over AML/CTF concerns.

26.01 The APS plans a whole-of-government learning technology ecosystem following a co-design involving teams from 37 Commonwealth agencies. ITnews reports a core goal of the new system is to enable interoperability and integration across learning and development environments.

23.01 TikTok has finalised agreements with backers including Oracle, Silver Lake and Emirati company MGX to establish a US joint venture. Each of the three backers will hold a 15 percent stake in the company. ByteDance keeps a 19.9 percent share. The BBC reports the content recommendation algorithm has been licensed to Oracle – headed by Trump ally Larry Ellison – which already oversees US user data under a previous arrangement set up over security concerns. The deal will enable TikTok to continue operating in the US, but is likely to continue to be scrutinised, with some Democrats voicing concerns about the ties between Trump and TikTok’s new investor group could limit what gets shared on the platform.

22.01 Australia’s financial intelligence unit, Austrac has ordered an external auditor be appointed to assess whether fintech – and unicorn – Airwallex is complying with anti-money laundering and counter terrorism financing. Austrac says it has ‘concerns’ about potential non-compliance including that Airwallex’s transaction monitoring program has not been ‘attuned to the full range of risks it faces’ and the company hasn’t demonstrated an acceptable understanding of who its customers are and what reporting may be required. The auditor must report findings within 180 days of appointment.

20.91 AI projects to improve construction safety, enhance space safety and detect speech delays, are among the 174 projects winning funding in the latest round of Australia’s Economic Accelerator (AEA) Ignite program. More than $72.5m in funding was allocated. The funding is for projects that build capability I nationally important sectors aligned with the National Reconstruction Fund’s priority areas, AEA says.

20.01 Gilmour Space has become Australia’s first space tech unicorn after raising $217m in a Series E funding round – its largest funding round to date. SpaceNews reports the round was led by the federal government’s National Reconstruction Fund and retirement savings fund Hostplus along with several other investors.

20.01 A bill cracking down on hate speech has passed the House of Representatives and Senate at a special sitting late on Tuesday, a month after 15 were killed at Bondi Beach. It includes provision to ban groups deemed to spread hate, the BBC reports. The hate speech reforms were originally part of an omnibus bill along with gun reforms, but the two were split last week. The gun reform bill, which includes a buyback scheme, was also passed.

16.01 Social media companies removed access to around 4.7 million accounts for those under 16 in the first half of December, eSafety says.

16.01 Alphabet’s Waymo robotaxi business has held discussions with Chinese car maker Geely, and other electric car makers, as it looks to enter the Sydney market. AFR reports. Waymo is stepping up its efforts in Australia, with the appointment of a lobbyist and a search for an office now underway. It has yet to lodge an application to begin testing in the city.

13.01 Advertising is hitting the AI chatbots with ads starting to show up in Google’s ‘AI Mode’ in what the Washington Post says is likely to be just the beginning of more trial-and-error attempts this year. Google has been pushing a new type of ad in AI Mode to advertisers, OpenAI has also been looking at introducing advertising in ChatGPT and Perplexity attempted ads but pulled back last year – but has left the doors open to try again.

08.01 The DTA has warned against outright bans of IT suppliers and services companies for unethical behaviour warning such bans could introduce significant operational risks and unintended consequences. ITnews reports parliament is considering an exclusion regime preventing those engaging in unethical conduct from bidding for government work, in the wake of the PwC scandal. The DTA, however, says blanket bans could block access to tech advances or skilled resources.

The post Appwrap 2026: Bank cuts, Canva buys and Booking breach appeared first on iStart keeping business informed on technology.

CPA Australia’s latest Small Business Survey of more than 4,100 businesses across APAC, shows both Australia and New Zealand are sitting near the bottom of the region for growth, innovation and technology adoption. It’s the second year New Zealand has ranked last for growth, something Rick Jones, CPA Australia regional head, dubs ‘a worrying trend’.

“Existing technology spend is not translating into profitability.”

In New Zealand just 38 percent of small businesses reported growth in 2025 – up on last year’s 36 percent but still well below the APAC average of 62 percent, and ranking New Zealand last out of the 11 markets surveyed. Just 26 percent said technology investment improved profitability, less than half the regional average and digital adoption remains weak. Australian results paint a similarly weak picture of low digital uptake and poor returns from tech investment.

Jones told iStart the problem is two-fold: Overall digital uptake in both markets remains well below Asia Pacific peers, and where businesses do spend, investment is heavily weighted toward basic IT such as computer equipment, rather than tools that change how the business operates. Online sales, digital payments and use of social media for customer insights, rather than visibility alone, remain underused, even as productivity pressures intensify.

With productivity firmly on the political agenda in both countries this election year, Jones says lifting small business technology should be a central priority.

“Our data consistently shows that businesses which invest effectively in technology grow faster, hire more people and are more likely to innovate. Countries like Singapore have demonstrated what targeted digital support programmes can achieve – there are proven approaches in our region that could work here,” he says.

Low adoption, low returns

The survey data shows that limited digital adoption remains a key issue across both markets, but the effect is most pronounced in New Zealand.

Only 32.4 percent of New Zealand’s small businesses generated more than 10 percent of their revenue from online sales in 2025, less than half the Asia Pacific average and the lowest results across all surveyed markets. Use of digital payment platforms is similarly low with just 35.4 percent receiving more than 10 percent of sales via services such as PayPal, Apple Pay or Google Pay, again ranking last in the region.

Technology use remains basic elsewhere too. Almost 31 percent of Kiwi small businesses don’t use social media for business purposes at all, compared with a regional average of 12 percent.

The pattern is mirrored in Australia, where 44 percent of businesses reported earning more than 10 percent of revenue online, still well below the Asia Pacific. The report notes however, that while New Zealand and Australian small businesses continue to be the least likely to generate online sales, Australia, at least, experienced an improvement year on year in 2025, while New Zealand’s decline continued. In Australia, 68 percent used social media for business, trailing the regional norm of 88 percent.

The gaps matter because the survey shows a strong relationship between digital adoption and performance. Businesses with higher use of online sales channels, digital payments and basic automation are most likely to report growth, hiring and innovation. “Technology continues to play a more critical role for high-growth small businesses than for other businesses,” the report notes.

Maintenance, not momentum

Where small businesses do invest in technology, the type of investment helps explain why returns remain weak locally.

In New Zealand, computer equipment was again the most heavily invested tech category last year – continuing a trend echoed repeatedly in the survey since 2020 – followed by website and accounting software. Australia was similar, favouring accounting software, followed by computer equipment and website.

In comparison, high-growth businesses across the region were most likely to invest in AI followed by cloud computing and CRM software.

CPA says this indicates A/NZ spending is often directed toward replacement or maintenance, rather than productivity-enhancing systems.

The profitability data reinforces that conclusion. Just 25.6 percent of Kiwi small businesses surveyed said tech investment improved their profitability in 2025, compared with a survey average of 56.3 percent. Australia recorded a similar outcome, with only 30 percent of businesses reporting profitability improvements from tech investments.

CPA links this to quality, rather than quantity of investment. Simply purchasing hardware – replacing devices, upgrading networks, maintaining on-premise systems – may keep the lights on, but it rarely changes cost structures, revenue flows or decision-making.

“What the survey shows is that existing technology spend is not translating into profitability,” Jones says. He says where business are investing it’s often without the sequencing or support needed to make the tools deliver operational change.

“The question is, how do we support these business owners in that capability piece, so they are not just investing in technology, but are investing in the right technology? That’s not just about using it right, it’s around making it work for the business so they are seeing returns,” he says.

Cashflow and time pressure points

Across both countries, the operational pressures facing small businesses underline why businesses are cautious – and why digital matters.

In New Zealand, 54 percent of businesses said increasing costs had a major negative impact in 2025, ranking highest among surveyed market. Hiring remains weak with only 7.4 percent increasing employee numbers, and just 14 percent expecting to hire in 2026. Innovation plans are similarly subdued with only 4.9 percent planning to introduce a new product, service or process in the coming year.

Australia’s results show similar stagnation, with CPA Australia business and investment lead Gavan Ord warning that prolonged underperformance among small businesses is feeding into a wider productivity slowdown. “When small businesses underperform year after year, it become a national economic problem, not just a sector issue,” he says.

Against that backdrop, the technologies most closely linked to measurable gains are not experimental. Jones points to practical improvements such as faster invoicing and payments, online ordering and booking systems and digital finance and reporting tools that reduce manual work across payroll, inventory and customer management.

He notes when businesses experience clear time savings and faster payments, confidence in technology investment tends to rise, easing hesitation around further adoption.

The older demographics of Australian and New Zealand businesses also has a role to play in tech adoption. New Zealand has the oldest small business ownership profile in the region, with 68 percent of owners aged 50 or over. Australia shows a similar generational divide, though less pronounced.

“It’s not an age thing in isolation, but what the survey showed is that business owners under 40 certainly reported growth,” Jones says. “They showed a lot more revenue through online sales and their digital and tech uptake is a lot higher. Younger business owners have a higher risk appetite and are more likely to invest in digital capability.”

In the wake of the survey results, Jones says business technology adoption needs to be made an essential priority for New Zealand (and Australia’s) growth and productivity agendas.

“We need to introduce some better sequence digital adoption support programmes,” he says, suggesting we look to Singapore for examples of programmes which have a proven track record in providing comprehensive support for small business.

“The government should consider designing business digital support programmes with more deliberate bundling and sequencing of measures, drawing on approaches used in Singapore,” CPA Australia says. “This would increase programme effectiveness, accelerate the diffusion of productivity enhancing technology and promote more effective use of existing digital capabilities. Over time this would support stronger productivity, greater business dynamism and a more competitive small business sector.”

In Australia the organisation is also calling for government to incentivise tech adoption and the development of stronger digital capability.

CPA is also calling for a coordinated package of measures to lift participation of younger people in small business. In New Zealand, that includes a ‘start-up apprenticeship’ or mentoring programme and improved access to finance and professional advice for younger owners, potentially through a ‘First Business Owners programme’ connecting participants with accredited advisers and possibly including a SME loan guarantee component.

Jones, who dubs the survey a ‘challenging read’ for New Zealand, says it’s not just about government investment, however. He’s calling for other organisations and consultants to step up and provide the mentoring relationships to help small businesses, and for the businesses themselves to more actively share with other small businesses their successes and learnings. CPA Australia itself is working on providing extensive professional development for its own members to help them on the journey – and ensure their small business customers can also move forward.

The post Why A/NZ SMBs are falling behind on tech appeared first on iStart keeping business informed on technology.

Kōrero Mai: Voice of the Digital Health Community in Aotearoa New Zealand, a report from HiNZ (Health Informatics New Zealand) based on conversations with more than 200 clinicians, administrators, technologists, industry experts, students, advocates and policy stakeholders, shows respondents acknowledge genuine gains in areas such as electronic referrals, e-prescribing, telehealth and AI, with progress happening ‘but in pockets’. But those gains, respondents warn, are being undermined by fragmentation and cyclical resets that erode confidence among the workforce.

“This is not because the workforce is resistant to change, but because they are tired of change that promises transformation and fails to deliver it.”

The report follows a 2024 Voice of the Workforce special report from HiNZ, which flagged widespread sector concern about the erosion of digital capability across the sector and comes as documents released under the Official Information Act show Health NZ knew last year that cutting data and digital roles would increase risks to patient care and hospital resilience, even as the restructure – which proposed cutting $100 million from the digital services budget and slashing data and digital team from 2000 to 1460 (many of the roles were already vacant) – proceeded.

The poor state of New Zealand’s health IT has been a focus for years, with Health New Zealand grappling with an outdated infrastructure, including an estimated 6,000 applications and 100 digital networks, inherited when district health boards were disbanded, replaced with a centralised system.

Change that fails to deliver

A central finding in the report is that trust in digital transformation itself is weakening. “This is not because the workforce is resistant to change, but because they are tired of change that promises transformation and fails to deliver it.”

Participants pointed to a familiar pattern: Pilots that never move into production or scale, contracts that end before benefits are realised and initiatives framed as discrete projects rather than long-term system capability. Digital change is being repeatedly ‘reset’ with momentum lost each time organisational structures or priorities shift, the report says.

For tech leaders, it highlights a credibility issue. When systems do not endure, confidence drops, making subsequent change more difficult to implement and increasing resistance at the frontline. Each reset, respondents said, reduces confidence that future initiatives will deliver lasting value, and they warned that when systems don’t endure, clinicians and digital teams become less willing to invest time and effort in new tools.

Skills not the constraint

Contrary to long-standing assumptions, Kōrero Mai finds the health workforce does not lack technical ability. Instead, professionals report having the skills needed to engage with modern systems, but lack confidence that those systems will functional reliably and be supported over time.

“The professionals already have the skills required to engage with technology. What is lacking is the confidence that systems will work, that investment will continue and that support will be available.”

Participants in the korero mai (open conversation) reported that training is frequently undermined by system churn, with platforms retired, restructured or under-resourced before benefits can be realised. As a result, digital confidence is being eroded not by lack of competence, but by lack of continuity.

“Participants stressed that digital transformation is not a cost-saving exercise in the short term, but requires sustained investment in people: This involves training, change management and roles dedicated to making systems work in practice,” the report says. It notes reductions in digital service roles have left fewer people available to train, support and optimise systems.

Resilience warnings

Concerns about confidence and continuity are reflected in internal Health NZ documents which the PSA gained under OIA. End user Impact of Digital Change – Consequences was written around March 2025 as Health NZ refined its proposals to slash the IT workforce and flags increased risks to patient care and hospital resilience.

It found risks ‘will almost certainly elevate as technical debt becomes unsustainable and the modernisation/transformation required to meet the future needs of the sector is delayed’.

The report also noted existing weaknesses in system resilience, including limited business continuity planning and ‘minimal’ hot-failover mechanisms, leaving core systems vulnerable.

Those vulnerabilities were highlighted in a series of high-profile IT outages earlier this year. In January a major outage impacted hospitals in the lower North Island with clinicians unable to access patient information, just days after a widespread outage affected the Southern district. Auckland and Northland hospitals were also knocked offline in January, with staff resorting to paper-based systems and whiteboards during the 12-hour outage. They were also affected by an outage in February.

Kōrero Mai also notes the ongoing issue of lack of interoperability across systems, with clinicians navigating ‘dozens’ of systems, multiple log-ins and manual workarounds to deliver routine work. Patients are required to repeat stories and critical information is ‘frequently’ lost between settings.

It calls for acceleration of interoperability and shared records as a national priority, saying incremental progress is no longer sufficient. “Clear milestones, accountability mechanisms and clinical leadership are required to ensure interoperability delivers real value to  frontline care.”

A ‘fundamental shift’ away from experimentation towards sustained, system-level capability is also required. “Digital health can no longer be framed as a series of projects, pilots or technology deployments…

“Interoperability, for example, is not simply a technical problem but a systems trust issue. A ‘single source of truth’ is about more than shared records, it represents shared understanding across organisations, professions and communities.’

Showing what alignment can deliver

Among the success stories, and an example of what is possible when technology aligns with real clinical needs, is the ‘rapid normalisation’ of AI in clinical and administrative settings, the report says. AI scribes, transcription tools and assistants have moved from pilots to business as usual in many environments. Participants reported tangible productivity gains and reduced administrative burden from the tools. For some it is enabling better eye contact with patients, more thoughtful consultations and reduced cognitive load at the end of long shifts.

Interestingly, workforce attitudes towards AI have also shifted, with fear of replacement increasingly replaced by recognition that AI is a tool which if governed well, can strengthen, rather than dimmish, roles.

That issue of governance, however, comes with a warning, with the report cautioning AI’s  future success ‘depends on governance that centres people, culturally responsive design, transparency, accountability and strong human oversight’.

Incremental system unification has also seen genuine progress and received a thumbs up from participants, particularly in regions where consistent platforms are used across departments. The national rollout of electronic referrals and wider adoption of electronic prescribing were also cited as practical wins. “These initiatives demonstrated that when proven solutions are scaled thoughtfully, they can deliver immediate benefits to both clinicians and patients.”

There’s also been a ‘meaningful’ shift in how rural needs are recognised, the report says, with technologies such as satellite connectivity enabling mobile and remote care models that were previously impossible and telehealth now widely accepted as a legitimate and valuable mode of care delivery.

The report concludes that the key challenge for 2026 is not the volume of technology being deployed, but the credibility of digital transformation itself. “The opportunity for 2026 is not simply to implement more technology, but to rebuild trust in digital transformation itself.”

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The report is based on ‘insights’ from more than 4,000 eCommerce founders which Australian company Ecommerce Equation has worked with, and draws a clear line between founders who are seeing commercial impact from AI and those who feel increasingly overwhelmed by it.

“Where that understanding is missing, AI simply creates more activity, complexity and noise.”

The report highlights that AI performs best when companies already understand their business constraints. Those seeing real gains are the ones who know exactly which problem they’re trying to solve.

Or as says Jay Wright, Ecommerce Equation founder, says:  “The founders getting real results aren’t the ones doing the most with AI. They’re the ones who knew their business well enough to know exactly where to point it.”

Founders who skip this step tend to deploy AI broadly, without a clear objective or identifying a bottleneck, resulting in more output but little impact on revenue, margin or time saved, a pattern described as  ‘activity without moving the dial’.

In contrast, those who are seeing results are described as starting with a precise diagnosis: A conversion issue on one product, uncertainty in reordering decisions, a slowdown in creative testing or excessive manual operational work. In these case, AI is applied narrowly to the bottleneck and measured against a defined outcome, such as conversion rate, marketing efficiency, time saved or cash conversion speed. In essence, AI doesn’t fix unclear fundamentals; it amplifies existing systems. Where founders already know what ‘good’ looks like in their business, AI accelerates progress. Where that understanding is missing, it simply creates more activity, complexity and noise.

“The short version is this. AI is delivering real value for a small number of founders who have done the diagnostic work first. For everyone else, it’s generating activity without moving the needle.”

Where AI delivers real value: Revenue and conversion

The strongest, most immediate wins documented in the report occur on the revenue side of eCommerce operations. These include conversion rate optimisation, creative production, advertising performance and customer experience.

Lead-side work of getting products in front of the right people and converting are where most brands find their first meaningful wins, the report says, with successful brands using AI to tighten the connection between product and customer with clearer landing pages, tailored ads and a stronger read on what is resonating and the speed to act on it. “The feedback is fast, the impact is visible and the tools are mature enough to act on.”

For those who are getting it right, the report claims the wins are visible and fast, with conversion rates jumping 24 percent in a week from a single tool built around one specific customer problem.

That 24 percent figure relates to Australian apparel brand The Lullaby Club. It identified that a best-selling product fit differently from the rest of the range, rendering the standard size guide ineffective. A custom AI fit-finder was built in Claude for that single product. When it was tested with the 40,000-strong customer community, it achieved a 97 percent sizing accuracy. Within a week, conversion increased by 24 percent and returns fell. With confidence in that project, Lullaby turned its focus to other initiatives including a velocity trends tracker to show how products were selling and trends, using the same data foundation.

“We’re seeing brands go from sub-three percent to 7-11 percent conversion every day by feeding AI the right context about the customer,” the report says of some of the quick wins achieved.

The report also points to growing, if less headline-grabbing, wins on the operational side. Inventory forecasting, purchase ordering and customer service workflows are emerging as areas where AI is beginning to reduce manual effort and uncertainty.

Companies using AI to draft purchase orders, track sell-through rates and flag shifts in momentum are tightening cash conversion cycles and reducing guesswork.

Australian independent apparel brand Dr Moose is one example. The company identified that growth was being constrained its website. Rather than outsourcing work to an agency, she used Claude tools to redesign site UX, introduce bundles and adjust commercial settings herself. Changes previously scoped as a $15,000 web development project were implemented internally, lifting daily revenue from around $600 to $3,000. To get the most from the tools she used ChatGPT to work out what to ask Claude, avoiding burning tokens on trial and error.

Where AI falls flat

The report is equally direct about common failure modes. The most frequent is confusing activity with impact. Those who deploy AI before identifying a real bottleneck often rebuild systems that already work, or chase issues they don’t have.

But the report also notes there are real risks companies need to understand before they go too far down the rabbit hole. “AI will produce data it doesn’t have, confidently and without

flagging it. It too easily gives everyone asking the same question the same answer. And it will sand off the rough edges that make your brand distinct if you let it.”

Those getting the most out of it are the ones who stay in the loop, sense check the output and never let it make the call they should be making themselves, the report notes.

The report leaves little ambiguity about what separates results from noise: AI delivers value where it is applied with intent, against clearly defined constraints with humans remaining closely involved in the outcomes.

Where it is treated as a general productivity layer or a substitute for decision‑making, it tends to add complexity rather than remove it. The implication for eCommerce founders is practical rather than philosophical: AI works best not as a strategy, but as an execution tool, applied deliberately, measured against specific outcomes, and expanded only once it proves its worth.

The post When eCommerce AI works – and when it doesn’t appeared first on iStart keeping business informed on technology.

Australian ASX-listed real estate assets manager Dexus, which was the project developer says it adopted an ‘end-to-end’ digital strategy for the project, including creating a full digital twin pre-construction to enable real-time decision-making, stakeholder engagement and seamless transition into facilities management, with the model now being used to manage the buildings operations.

“The scale of the model and the accuracy behind it are unlike anything we have worked with in New Zealand.”

The twin eliminated design clashes before construction began and held contingency to just five percent – half the industry norm of up to 10 percent.

The digital twin is now operating as a live facilities management system for the building, which opened last week, and Dexus says the technology has helped cut the building’s operational carbon by 80 percent.

Te Rua’s results demonstrate the impact of embedding a fully coordinated digital environment before ground is broken. Dexus says if digital twin technology is introduced from the design stage of large scale projects to identify and address flaws across the infrastructure pipeline to the levels achieved on Te Rua, New Zealand could potentially avoid millions of dollars in construction cost overruns.

The archive, which is one of the most technically demanding buildings constructed in New Zealand, required millimetre-level accuracy to meet strict environmental and seismic performance standards. Designed to remain operational after a one in 1,800-year earthquake, it must maintain temperature and humidity within one degree tolerance for at least 48 hours in a power failure to protect government records and taonga held under UNESCO Memory of the World obligations.

The digital twin created a 3D virtual environment that allowed architects, engineers and contractors to detect and resolve design conflicts before they appeared on site – a common source of costly delays and rework in complex builds. The archive’s model was ‘clash-free’ at tender stage, an accuracy level Dexus says was not previously seen in complex civic construction in New Zealand.

Contractors used on-site stations connected to the live design so they could install services with millimetre accuracy, and augmented reality was deployed for quality assurance during installation, allowing the design team to validate work in real time.

Once the building was operational, Te Rua’s digital twin transitioned into a live facilities management platform. It now monitors more than 20,000 assets, tracking temperature, humidity, energy use and structural movement in real time. The system has already contributed to an 80 percent reduction in operational carbon emissions – equivalent to around 1,330 tones – by optimising environmental systems and enabling proactive fault detection.

Risk-mitigation engines

Phill Stanley, Dexus portfolio manager, says the results have direct implications for hospitals, data centres, water infrastructure and high-density civic buildings that require strict environmental stability and uninterrupted operations.

He believes with the integration of AI, the methodology could be adapted for use in New Zealand’s planned multibillion dollar healthcare infrastructure programme to produce clinically safer environments for patients.

With major projects gearing up in New Zealand’s hospital sector, including a new Dunedin Hospital, the redevelopment of Nelson Hospital, the expansion of Wellington’s Emergency Department and major upgrades to Auckland’s hospital network, Stanley believes digital twins could be a winning formula – effectively a hospital risk-mitigation engine.

“These facilities rely on uninterrupted power, complex mechanical systems and precise climate control and even minor faults can create clinical risk,” he says. “Digital twins could help control costs, reduce construction delays and ensure clinical spaces meet strict operational and environmental requirements from the day they open.”

He says while New Zealand has previously been slower to adopt digital design, the gap now represents a chance to reset industry practice and prevent the design clashes that traditionally surface only once construction is underway.

“You cannot retrofit this level of coordination. You have to make the decision right at the start or you lose the opportunity. Once you commit early, everything else becomes more predictable.”

While no two infrastructure projects are identical, Stanley says achieving the financial results seen on a project of Te Rua’s complexity demonstrates substantial, repeatable savings potential across the broader infrastructure pipeline.

“This… shows what is possible when everything is coordinated from day one. The scale of the model and the accuracy behind it are unlike anything we have worked with in New Zealand. For us, it gave a level of design certainty you just do not get on projects of this complexity.”

Australian adoption

The benefits aren’t confined to Wellington. Australian projects—facing their own pressures from rising costs, labour shortages and a packed infrastructure pipeline—are turning to digital twins for similar reasons. According to Deloitte and Autodesk’s State of Digital Adoption in the Construction Industry 2025 report, digital tools are becoming a central too in how Australian firms manage complexity, reduce delays and improve visibility across major builds. The report highlights that digital twins are now among the key technologies transforming delivery workflows across six Asia Pacific markets, including Australia.

On construction sites, digital twin integration has moved from pilot to practice. Builders are pairing models with photogrammetry, laser scanning and IoT data to maintain continuous, real-time alignment between the physical site and its digital counterpart. Teams then use the live models to rehearse material deliveries, test staging sequences and identify planning errors early, reducing rework risk and improving the likelihood of on-programme completion.

During construction, the models act as coordination hubs. Australian projects using live digital twins report earlier detection of discrepancies, cleaner as-built validation and faster decision cycles thanks to remote walkthroughs that allow certifiers, trades and clients to review issues together. The approach helps cut reactive repair costs by flagging anomalies – such as rising transformer temperatures or spikes in water demand – before they turn into expensive failures.

Beyond immediate project control, digital twins are underpinning longer-term asset management.

In Australia’s bridge network, the University of Melbourne’s Centre for Spatial Data Infrastructures and Land Administration (CSDILA) is developing a digital twin platform for structural health monitoring. The system integrates real-time IoT data, geometric models and physics-based simulations to track structural behaviour across critical sites, including heritage rail bridges owned by the Australian Rail Track Corporation. These models support predictive maintenance and provide detailed insights into safety and performance, offering a scalable approach for infrastructure networks nationwide.

Meanwhile, digital twin project management is gaining popularity across Australia’s expanding infrastructure portfolio. Major initiatives, from Snowy Hydro 2.0 to Western Sydney International (Nancy-Bird Walton) Airport, are turning to digital twins for real-time monitoring, lifecycle analysis and predictive forecasting. As project owners balance the pressures of complexity, cost and stakeholder expectations, digital twins offer the transparency and control needed to mitigate delays and keep delivery aligned with programme targets.

For both countries, the implications are substantial. In New Zealand, where a $275 billion infrastructure pipeline is underway, the potential savings from avoiding design clashes and optimising performance could be measured in the hundreds of millions. Te Rua may be the most prominent example to date, but its methods – early coordination, real-time validation and data-driven asset management – are directly applicable to hospitals, civic facilities, water assets and data centres.

While the technology won’t prevent every challenge, it does offer something the construction industry rarely enjoys: Predictability. By exposing issues long before they hit the site – and flagging operational risks before they trigger failures – digital twins give builders and asset owners the chance to act early instead of react late.

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The long-awaited strategy and accompanying Cyber Security Action Plan 2026-2030, released earlier this month, signal that cyber resilience must now be treated as a core governance, risk-management and strategic decision-making responsibility. It also flags that regulatory change is likely on its way.

“The Strategy clearly signals that regulatory reform is being considered.”

Alongside the Strategy and the Action Plan, the Department of the Prime Minister and Cabinet also released a discussion document seeking industry feedback on a new approach to the cybersecurity of critical infrastructure.

In it together

The Strategy adopts a whole of society model, outlining shared responsibility on government, industry and individuals. Businesses sit at the centre, with the Strategy’s four national objectives – Understand, Prevent and Prepare, Respond, and Partner, defining practical expectations.

Understand is around improving cyber awareness and literacy across organisations and New Zealanders, providing improved reporting of cybersecurity and sharing of information between government and industry to better understand the threat environment. NCSC will establish a single cyber security reporting service, with processes established for other types of online harm and cyber-enabled crime and redirected to other agencies. Critical infrastructure providers garner special mention, with the strategy noting there will be tailored guidance, including assessments, strategies for risk management and guidance to implement technical controls to protect IT and OT networks, for them (more on that later).

Prevent and Prepare is about strengthening cyber risk management, resilience and preparedness across government and industry. That includes strengthening the existing mandate for the Government Chief Digital Officer to entrench a culture of security from procurement to systems operations, with the Government Chief Information Security Officer establishing and enforcing minimum cybersecurity standards and working with digital supply chain vendors to apply more consistent security controls across agencies. Industry and public consultation on core elements of the regulatory framework is also proposed, including additional non-regulatory actions the government can take to better partner and support critical infrastructure owners and operators to manage cyber risk.

The Respond section says resilience and preparedness must be strengthened across government and industry, ensuring effective, coordinated responses to cyber incidents. Victims of cybersecurity incidents will be ‘supported to remediate and recover’. Legislative frameworks will be modernised to account for the complexity and global nature of cyber threats, with work to address jurisdictional barriers to Kiwi enforcement agencies can access cyber evidence to investigate cybercrime.

Partner highlights the need for ‘strategic and targeted cooperation’, both locally and internationally, with industry and international partners.

The Action Plan, meanwhile, provides the actions required over the next two years to put the Strategy into action, detailing lead agencies for each action.

Notably, the Critical Infrastructure discussion document highlights that if accepted, critical infrastructure entities would be required to develop, implement and maintain a risk management programme aligned with an internationally recognised cybersecurity framework – either endorsed by the NCSC or recognised internationally, such as the US National Institute of Standards and Technology Cybersecurity Framework.

The discussion document also outlines requirements to allow government to collect specific information, such as (initially) a description of their operations including critical components, information on the owners and controllers of the entity, and mapping of key dependencies and interdependencies.

The establishment of a voluntary information exchanges connecting organisations across the critical infrastructure system with each other and the government to coordinate cyber security efforts, a requirement for sharing of certain information with other critical infrastructure organisations – for example information on projected restoration times – and a requirement for cyber incidents to be reported are also proposed.

Regulatory change

The Strategy clearly signals that regulatory reform is being considered across several areas including strengthened requirements for the cybersecurity of critical infrastructure, which encompasses everything from the electricity grid to telco networks, health and transport services and financial systems.

The Strategy document notes that around 120 countries have some form of critical infrastructure regulation. “As a first step, the government will consult industry and the public on the core elements of a regulatory framework, including additional non-regulatory actions the government can take to better partner and support critical infrastructure owners and operators to manage cyber risk.”

The critical infrastructure discussion document highlights that cyber risks are ‘not well understood or collectively managed to a consistent level’ across the system, and that effective protection requires understanding ‘critical components, ownership and control structures, and mapping of dependencies’.

The document suggests the reach of proposed obligations could extend beyond the core operator to include third-party service providers with operational control of critical components.

Another potential area for regulatory change is the potential introduction of a civil pecuniary penalty regime to the Privacy Act aimed at incentivising protection of personal information. The Ministry of Justice will provide advice on options to incentivise protection as part of the two-year action plan.

Thomas Anderson, MinterEllison solicitor says if implemented it would mark ‘a notable shift in New Zealand’s privacy landscape’ which currently has no civil penalties for breaches of the Privacy Act.

“At present, the Act relies on a complaints-based enforcement model administered by the Privacy Commissioner, which can result in recommendations or, in serious cases, referral to the Human Rights Review Tribunal. However, there is no power to impose civil fines for contraventions of the Act (such as a failure to comply with the data security requirements in information privacy principle 5), unlike comparable regimes in Australia, the European Union and the United Kingdom,” he says.

Also on the table is the creation of a potential new offence for handling – including disseminating – illegally obtained personal information. That’s an area the Ministry of Justice has been charged with providing potential advice on the new offence.

The proposal would extend liability beyond the breached organisation to anyone knowingly handling unlawfully obtained personal information. While the intention is to deter malicious actors from circulating stolen data, Anderson notes the wording also captures organisations or third-party recipients who are aware that the information they are accessing or using was acquired through unauthorised means.

“Together, these two actions seem to signal a clear intent: The Government plans to use both stronger Privacy Act enforcement tools and new criminal offences to create meaningful financial and legal consequences for the mishandling or exploitation of personal information after a cyber incident.”

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This year’s awards received a record 300 entries, with a line-up that ranges from deep-tech ventures rewiring entire industries to nimble start-ups punching above their weight, from sustainability trailblazers to software innovators, creative technologists, manufacturers and standout individuals.

Nearly 70 companies are vying for glory across 14 categories. So who are they and what exactly do they do? Read on for the full lineup…

PwC Hi-Tech Company of the Year finalists:

Aroa Biosurgery develops advanced regenerative healing technologies designed to support complex wound and soft-tissue repair. The Auckland-headquartered and ASX-listed company, formerly called Mesynthes, was started in 2008 by a former vet, around a low-value byproduct from the meat industry, and is experiencing strong growth.

Auror provides an intelligence platform to help retailers and police reduce crime through real-time insights and connected data. The company has scaled rapidly, becoming a leading player in crime prevention technology for retail. The company has expanded into Australia, North America, the UK and Europe.

Dawn Aerospace is building a space transportation network using non-toxic refuellable satellite propulsion and rapidly reusable spaceplanes. Dawn’s propulsion systems are already operating on 42 satellites and the company’s next step is Loop, an on-orbit refuelling network. The company has 130 staff across New Zealand, the US, the Netherlands and France.

Gallagher Group is a long-established global security and animal management tech company known for innovative, high-reliability systems. Operating in 140 countries, the 85-year-old business reinvests 15 percent of all revenue in research, design and product innovation.

Halter delivers remote-control, GPS-enabled smart collars for cattle, enabling farmers to virtually fence, guide and monitor livestock – and paddock health. It has just completed a US$200m raise, which sees the company valued at US$2 billion – and you can read about that here.

Tait Communications specialises in critical open standard communications systems for industries such as emergency services, utilities and transportation. In business for more than 50 years, Tait provides rugged, high-reliability mobile radio solutions and is increasingly linking that with a range of broadband and video technologies and services. It’s also the sponsor for the Hi-Tech Award’s Flying Kiwi award, recognising an individual who has played a leading role in the success of the sector, with founder Sir Angus Tait the first recipient back in 2003.

ASX Hi-Tech Emerging Company of the Year finalists:

BioOra develops cell-based and regenerative medicine technologies, automating the manufacture of CAR T cells for personalised immunotherapy, and ‘building the future of cancer treatment’. The company has an internationally recognised GMP license to manufacture CAR T cell therapies and is preparing to bring its products to market.

Calocurb produces a natural appetite-management supplement derived from New Zealand hops, targeting healthy lifestyle and wellness markets. The company has New Zealand and US operations and has reported 300 percent growth last year.

Hectre builds orchard-intelligence software and computer vision tools that help fruit growers improve yield, quality and labour efficiency. The company and recently completed a $12m Series A raise and their Spectre AI platform is gaining strong global traction.

Starboard Maritime Intelligence provides an AI-powered maritime intelligence platform that detects, analyses and monitors vessel activity for environmental protection and security. Their technology, which uses satellite, sensor and contextual data to provide real-time visibility of activity at sea, is used by governments and critical infrastructure operators to combat illegal fishing and safeguard oceans.

Starshipit offers an automated shipping and fulfilment platform for ecommerce businesses, integrating with major couriers and storefronts. Its tools help retailers streamline operations, reduce delivery friction and scale their online logistics.

2040 Ventures Hi-Tech Startup Company of the Year finalists:

Goodair Nosebuds is an Auckland startup which has developed a breath-powered nasal device designed to clear congestion naturally. It has raised more than $1.6 million and its first launch in 2025 sold out in less than a day.

Kara Technologies builds digital signing avatars to improve accessibility for deaf communities, using motion capture and AI to deliver sign language content at scale. Their Kat AI engine, currently in public preview, rapidly converts English text into high-quality sign language animations, aiming to make critical information more inclusive across media, education and public sectors.

Sea-flux provides mobile-friendly cloud-based integrated fleet management software for commercial vessels. The maritime compliance software provides real-time vessel monitoring, crew management, preventative maintenance and data driven decision making. The company secured nearly $3 million in seed funding and has more than 1,300 vessels and nearly 9,000 users.

Datacom Hi-Tech Inspiring Individual finalists:

Ankita Dhakar is the founder and CEO of Hamilton’s Capture the Bug a cybersecurity focused company helping organisations strengthen their digital resilience with penetration testing-as a-service.

Dan Walker is senior partner development manager, global partner solutions at Microsoft.

Irina Miller is co-founder and CEO of Daisy Lab a biotech startup developing dairy-identical proteins through precision fermentation.

Tim Young is founder and CEO of Smart Access, a company which has collected data based on 40 accessibility features in the built environment. The information is then provided to councils to see what changes they need to make, providing a form of asset management for decision making and spend.

Trent Fulcher is CEO of Starboard Maritime Intelligence – finalist in the Company of the Year category.

Poutama Trust/GreenMount Capital Hi-Tech Kamupene Māori o te Tau – Māori Company of the Year finalists:

Alps2Ocean Food is creating sustainable, high-protein beef snacks, notably the Mīti beef bar, made from young dairy beef. The company won a 2025 Early-Stage Innovation Award at Fieldays for Mīti.

Bio Innovations

Hectre – a second outing in these awards, with the company also a finalist in the Emerging Company of the Year finalists above.

PAM is an AI-driven personal assistant app to help families stay on top of tasks, calendars and everyday life.

Duncan Cotterill Most Innovative Hi-Tech Software Solution

CloudHound is an advanced infrastructure discovery platform providing deep insights and best-in-class recommendations to accurately plan and maximise AWS cloud success.

PAM – another showing for the AI-driven family personal assistant, which is also a finalist in the Māori Company of the Year category.

Partly is building ‘the first foundational AI model for the auto parts industry’ with AI native applications ranging from Parts Procurement which analyses business rules, availability, pricing and more to automatically build the most efficient parts basket, to order management and estimation.

RossOps helps manufacturers unlock the knowledge living in the heads of their most experienced people and make it available to others on the team so each shift can perform their best. It’s solutions include AI-powered shift handovers and engineering trouble shooting and knowledge management and CI project tracking.

UneeQ Digital Humans develops AI-driven ‘digital humans’ for sectors including tourism, financial services, healthcare, education, and aviation. It’s newly launched Immersive Training Platform provides ‘next generation learning’ enabling organisations to create lifelike, emotionally intelligent training simulations at scale across learning domains including sales, customer service and leadership. The company has strong momentum in the Middle East with customers include Qatar Airways, the Saudi Tourism Authority and Ajman Bank and is now looking at North American expansion.

VXT connects law firms calls to their legal software, logging time, transcribing conversations and filing notes, removing admin work.

Kiwibank Most Innovative Hi-Tech Solution for a More Sustainable Future

AoFrio provides intelligent hardware and a SaaS platform for beverage and food customers. It’s cloud-based platform connects millions of refrigeration assets, providing realtime data and actionable insights on cooler location, operation, sales and sustainability. The company, which counts Coca-Cola, Pepsi and Heineken among its customers, logged revenue of $83.2 million for the financial year ending 31 December 2025.

Captivate Technology is a Massey Ventures spin-out, and has developed a recyclable sponge-like adsorbent material to selectively capture carbon dioxide from industrial emissions. The patented material can be deployed across sectors including cement, steel, natural gas, biomass combustion and biogas. It recently completed a $3 million seed round.

Helical is a SaaS based genetics operating system for genomic data management, registry operations and genetic evaluation. The company, founded in 2021, now operates in more than 40 countries powering breeding systems across beef, dairy, sheep and others.

NZAutoTraps provides automatic, self-resetting possum and rat traps, manufactured in Whakatane. More than 20,000 traps are in use and the company is looking into further automation and data collection – as well as a project to exclude the tenacious kea.

Partly – another showing for the auto parts industry player, which is a finalist in the Most Innovative Hi-Tech Software Solution category, above.

TCS is a Waikato-based micro-processor engineering company whose Milkcollect system was created in 2014 and is now installed in more than 550 milk tankers collecting 84 million litres of milk a day. Its tanker fluid management includes pumping algorithms to maximise collection speed, RFID vial tags to electronically track the load, composite and quality samples to ensure full traceability and cellular data collection to factory scheduling systems.

Braemac Most Innovative Hi-Tech Manufacture finalists:

Alimetry has developed a non-invasive gastric diagnostic tool for diagnosing and managing gastrointestinal disorders. Their products combine wearable sensors with cloud-based analytics to deliver non-invasive insights into gut function. The company recently secured FDA clearance for an AI-powered update to the wearable device.

Architectural Glass Products is a Cambridge double-glazing manufacturing business. The insulated glass units are p;roduced with minimal human contact using precise automated equipment.

Aroa Biosecurity – the company is also a finalist in the Hi-Tech Company of the Year category, above.

Astute Access provides smartphone-centric keyless locking technology for utilities and critical infrastructure complete with a cloud-based audit trail and over the air access enabling remote administrators to instantly grant and revoke user access.

Cleanery develops eco-friendly, low-waste cleaning, dish wash and hand soap products using patented formulations that enable naturally occurring plant and mineral materials to easily mix with water. The concentrated mixes are sold in sachets with customers adding the water, reducing plastic waste and transport emissions.

Fisher & Paykel Technologies designs and manufactures advanced direct drive motors, motor control systems and electronics. Their technology powers home appliances from global brands and are used in a variety of industries to help businesses customise solutions for their customers. They’ve also stepped into health and fitness with drive systems, sensors, digital twin technology, flow builder software and a user interface to help companies design customised solutions for end users.

Consult Recruitment Best Contribution to the NZ Tech Sector finalists:

GridAKL is an Auckland innovation precinct, designed to support tech startups and scale-ups through shared workspaces, community programmes and ecosystem-building initiatives. It’s role focuses on accelerating collaboration, capability and growth within the wider NZ tech sector.

Ministry of Awesome is a Christchurch-headquartered, nationwide entrepreneurship hub providing founders with programmes, mentoring and pathways to investment. They play a central role in nurturing early-stage ventures and strengthening Aotearoa’s startup pipeline.

Mission Ready delivers training and upskilling programmes that help people transition into tech careers more quickly. Their industry aligned courses support workforce development and contribute to filling critical skills gaps in the NZ tech ecosystem.

Oxygen Advisors provides specialist guidance to startups, acting as an ‘outsourced CFO and hands-on finance team’. It has raised $650m in capital and secured $240m in grant funding, backing more than 330 founders over 10 years.

NZTE Most Innovative Hi-Tech Agritech Solution finalists:

BDX is a Whangarei-based company, originally providing engineering services specialising in industrial, mechanical and structural projects. It has since expanded into fabrication and maintenance services and civil contracting and mechanical services.

Bovonic develops agritech designed to support animal health monitoring and disease detection. Its QuadSense automatic mastitis detector has been installed on more than 160 farms across New Zealand and Ireland, saving farmers on average 3.7 hours a week, increasing milk quality and leading to reduced antibiotic use.

Hectre makes its third showing in these awards with the orchard intelligence provider also a finalist for Emerging Company of the Year and Māori Company of the Year.

TCS adds to another category to its lineup, alongside Most Innovative Hi-Tech Solution for a More Sustainable Future, above.

Trackit provides fleet tracking and management, including agricultural fleet management that handles seasonal scaling, off-road operations, mixed vehicle types and the unique complexity of farm logistics. It’s used in more than 150 kiwi farming operations, including with LIC’s 390 vehicle agricultural fleet and claims an average 40 percent increase in off-road RUC refund recovery.

Xero Hi-Tech Young Achiever finalists:

Jean-Luc Ellis is co-founder and CEO at WasteX which is developing AI-powered software to revolutionise waste, material, logistics and embodied carbon tracking to reduce waste, optimise costs and drive decarbonisation.

Lucy Turner is the CTO and co-founder of communication automation company VXT, a finalist in the Most Innovative Hi-Tech Software Solution category.

Nathan Konigkramer is an AIX engineer at Spectrum Consulting.

Sam Broadhead is co-founder of Sence which tries to make sense of unseen conversations to improve engagement strategy.

Fujitsu Most Innovative Deep Tech Solution finalists:

Masco Technologies provides sensory AI integration for hardware companies, offering solutions from data collection and engineering to model development and deployment. Alongside using AI to enable solutions to detect air quality issues and identify contaminants, the company has a focus on animal health and smarter, data-driven livestock care.

Starboard Maritime Intelligence – another appearance for the AI-powered maritime intelligence platform which is also an Emerging Company of the Year finalist, above.

ZealaFoam is creating plant-based technologies to enable businesses and consumers to make smarter, greener choices. Its ZealaFoam is 100 percent bio-based and designed to meet the need for sustainable alternatives to traditional materials.

NZX Most Innovative Hi-Tech Creative Technology Solution finalists:

Access Quest by Smart Access is mapping the world in an effort to make it more accessible. Users book a free access ‘cart’ then walk their usual routes and the cart tracks accessibility features and obstacles using the mobile phone. Data is then uploaded and information is provided to councils to encourage more inclusive access for all. Smart Access founder and CEO Tim Young is also a finalist in the Hi-Tech Inspiring Individual category.

Kara Technologies – the digital signing avatar company is a finalist in the Startup Company of the Year, as above.

Kitten Space Agency by Rocket Werkz is a mission to create a spaceflight game that inspires the next generation of space explorers – and yes, there are kittens. Currently in ‘pre-alpha’, players can sign up and test and share ideas on it. And did we mention that there are kittens?

Staples VR creates AR/VR training through SaaS solutions and bespoke software development across aviation, defence, health and safety, medical, first responders and entertainment. The immersive tech company closed a $5.25m funding round last year.

UneeQ Digital Humans – the AI-driven ‘digital humans’ company is also a Most Innovative Hi-Tech Software Solution finalist.

Christchurch Airport Hi-Tech Solution for the Public Good finalists:

Access Quest by Smart Access – a second outing for the project aiming to make the world more accessible using people power. It’s also a finalist in the Most Innovative Hi-Tech Creative Technology Solution category, above.

Canterbury Seismic provides advanced earthquake monitoring solutions including Sentinel Seismic Monitoring, using on-site sensors and cloud-based analytics to provide reliable insight into how a building is performing during and after an earthquake.

Evolocity is an EV programme aiming to inspire school age students into sustainable engineering. The year 7 to 13 students design, build and compete with their electric vehicles, with workshops provided to guide them in welding, CAD design and Arduino programming.

0800 Trust (Hark) is dubbed the world’s first acoustic wildlife monitor with true edge AI. Hark runs google’s Perch v2 bioacoustic model, directly on device, on solar power, to detect and classify more than 100 species in real time painting a picture of New Zealand’s forest – and the impact of predators.

oVRcome is a platform combining VR exposure therapy, using home technology, and generative AI to improve mental wellbeing. Its goal is to make treatment for anxiety disorders easy and accessible to everyone.

Wildlife.ai is a charitable organisation dedicated to accelerating wildlife conservation through AI, developing user-friendly, non-invasive and open-source technologies. Its projects so far include an AI-powered open-source smart camera trap with embedded machine learning for real time species identification and modular sensors capable of monitoring diverse taxa, and Spyfish Aotearoa, a citizen science and machine learning approach to identify fish in baited underwater videos.

Winners of the awards will be announced at a gala dinner in Auckland in May.

The post From deep tech to disruptors: Meet the Hi-Tech finalists appeared first on iStart keeping business informed on technology.

That’s the issue Monash University faced and is now looking to solve.

“That will lower the hurdle for industry to use these models.”

Yunlong Tang, assistant director of the Monash Centre for Additive Manufacturing and senior lecturer in mechanical and aerospace engineering and materials science and engineering, told iStart that despite a surge in robotics adoption, most Australian and New Zealand factories continue to separate humans and robots with physical cages. That’s something he says isn’t the best option as workflows demand greater speed, flexibility and human involvement.

Tang is the co-author of a new international review on human robot collaboration, exploring how manufacturers can make human-robot collaboration safer, more adaptive and efficient by improving the way robots predict human behaviour in shared industrial environments. It also identifies major system level changes, including the absence of standardised behavioural datasets and the need for models that can interpret human movement, intent and cognitive state.

As manufacturing moves toward Industry 5.0, production systems are becoming more human-centred, combining human creativity, judgement and dexterity with robotic precision, strength and speed. But that’s creating new safety and coordination challenges – if robots can’t accurately anticipate what a worker will do next, the risk of collisions, delays and inefficient collaboration increases.

For Monash, which is building a digital twin system enabling human and robot collaboration, the issue is more than theoretical. The university faced real safety concerns around ensuring people and robots operate together without risk.

It was that concern that prompted the review, published in the International Journal of Production Research. It outlines three key approaches – mechanism-based models built around physical motion and interaction rules, data-driven models that learn from sensors and AI and hybrid combinations – for predicting human behaviour during human-robot collaboration. It concludes that integrated models, combining physical world understanding with AI-driven data insights, will be necessary for the safety, efficiency and generalisation required in modern manufacturing systems.

Tang says the real barrier to Industry 5.0 is that robots still can’t reliably anticipate what humans will do next, and industry won’t change how it deploys robots until that prediction gap – not issues around power or speed – is closed.

Traditional solutions use rule-based boundaries to keep robots and humans separated. “We separate the robot and human in different spaces, and of course the human is much safer and feels more confident working with the robot,” Tang says.

But that approach limits the efficiency because in a lot of tasks having robot and human in the same space makes things easier and more efficient.

Removing those boundaries requires robots to handle unpredictable human behaviour, and Tang says industry demands absolute reliability before attempting this shift. The report says Industry 5.0 environments introduce new safety risks if robots cannot accurately anticipate the next human action.

“The conclusion we got from this research is we didn’t see any existing method or model that can solve all the problems. Every approach has its own shortcomings.”

The review suggests future progress will depend on combining physical models, sensor data and AI in ways that allow robots to respond more intelligently to human movement, intent and changing working conditions.

Key challenges, however, include the absence of standardised multimodal datasets, the limited scope of physical world models, the variability of human behaviour and the need to more effectively consider human trust, workload and cognitive state during collaboration.”

Closing the gap between research and deployment

Tang and his team at Monash have now embarked on a multi-year project to address the issue with the ultimate aim of releasing open-source base models and frameworks for industry to use.

“Our plan is that in the first one or two years, we get enough data. Then we’ll be training the model and validating the models and seeing whether it can help humans and robots have the better collaboration,” he says.

In Monash’s Living Lab, robot 3D printers and humans are working together. “We have a lot of sensors to detect the human actions and we want to build a data set to understand, for example that a human is now picking up items from the 3D printers, and then link to the next potential behaviour that the operator will do.”

The lab captures natural human motion, decision sequences and task patterns, giving researchers the multimodal data required to train predictive models.

Open-source base models and frameworks would be made available for industry to adopt – taking the algorithms and framework, but adding their own industry specific data.

“I hope in future, if this approach has been proved valid and we can build an open database, the more data we have, the more accurate, and much smarter robots can work with humans. That will lower the hurdle for industry to use these models.”

He says collecting data will be one headache for industries, because they will need to spend one or two years – “sometimes even longer” – to get enough data to train the models.

“I hope that in the future, like our large language model nowadays, we can train some foundation model and based on the foundation model, fine tune for the different industries. Maybe that will be the next step.”

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The $3.5 billion data centre – set to be the first hyperscale facility in the South Island – has secured multiple resource consents for the 78,000m² facility in Makarewa, north of Invercargill, but while some are cheering, others have expressed concern that the project could quietly transform the region into an energy exporter to offshore companies, with little payoff at home.

“The key issue is  not just whether the project brings investment, but how the benefits of that investment are structured and distributed.”

Landing of the Tasman Ring Network – a 6,000km trans-Tasman subsea cable linking Invercargill with Sydney and Melbourne – at Oreti Beach has also been fully approved, providing the first international subsea cable connection to the South Island and a crucial link for Datagrid and global cloud and AI operators requiring stable, low-latency international data routes.

Datagrid, which is headed up by founder and CEO Rémi Galasso who was also the founder of the Hawaiki Cable (Callplus founder Malcolm Dick is Datagrid’s other co-founder), has received full resource consent from by Southland District Council, Environment Southland and Invercargill City Council, nearly six years after the project was first announced in 2020. It includes six large data halls and a dedicated grid exit point substation on 49 hectares of land.

Galasso has said the centre will deliver a ‘transformative impact’ for Southland and the country, turning Invercargill into a vital digital destination.

New Zealand already has 56 operational data centres with another 20 more planned or under construction, according to a report last year from NZ Tech (now Tech New Zealand).

Empowering Aotearoa New Zealand’s Digital Future – Our National Data Centre Infrastructure says the sector directly employs ‘over 1,000 people’ while supporting 6,800 additional roles. “The workforce is forecast to double by 2030 with up to 15,000 construction jobs expected as new centres are built.”

The report paints a glowing picture of data centres for New Zealand, saying the sector underpins $93 billion in economic activity, with  $16.5 billion in ICT GDP and $76.5 billion in knowledge-intensive services.

Kiwi data centres are among the most energy efficient globally, with an average PUE of 1.3 – below the global average of 1.54.

“For every unit of energy used to power computing, almost none is wasted on overhead like cooling and backup systems.”

Powering up

But while local leaders and business advocates have promoted the development as a major economic win, there are concerns over what the data centre means for energy supply, local infrastructure and the long-term economic value to the region.

The facility’s need for uninterrupted baseload electricity, in particular, has become a focal point. The facility will draw up to 280MW – around six percent of New Zealand’s annual consumption – making it New Zealand’s second-largest electricity users behind Tiwai Point aluminium smelter. But unlike industrial users such as Tiwai, data centres can’t power down during periods of tight supply.

Dr Ulrich Speidel, Auckland University of senior lecturer in computer science, notes that between Datagrid and Tiwai ‘there mightn’t be so much power available to send north anymore’. However, he notes that likewise, threats to close the smelter might also have less bite from now on.

Speidel warns too, that while the facility itself will be powered by hydro, if the data centre displaces power that would have headed north, power may then need to be generated elsewhere using fossil fuels.

Datagrid, for its part, emphasises that the data centre will use renewable energy and take advantage of Southland’s cool climate to support energy-efficient operations. Internationally, renewable-powered data centres are increasingly in demand by large cloud and AI customers seeking to reduce the emissions footprint of their operations. The company has positioned the Makarewa site as a strategic gateway to Asia Pacific markets

The data centre will rely heavily on electricity drawn from the lower South Island grid, where Manapōuri already powers Tiwai. It signed a 15-year 140MW/year long-term power purchase option agreement with electricity generator Mercury earlier this month.

Draft fast track approval has also recently been given to Contact Energy’s Slopedown wind farm, which is expected to power the equivalent of 150,000 households. It is in close proximity to the Datagrid facility – just 50km away.

The ‘green’ credentials are a big selling point for Datagrid’s future international clients and have been heavily touted.

But energy experts have noted that hyperscale data centres require not only enormous amounts of electricity, but also substantial cooling capacity. Even in Southland’s cool climate, large-scale AI systems generate heat loads requiring continuous thermal management, contributing to pressure on both power and water systems. Datagrid will use groundwater and on-site stormwater for cooling.

Experts also note data centres can dispose of large amounts of wastewater, which may be heated above ambient temperatures, but say there is little clear information on that front when it comes to Datagrid’s plans. The original fast track application includes mention of possibly ‘coolant laden’ wastewater.

Despite this, Datagrid’s proponents argue that Southland is one of the most favourable places in the country for a development of this type, citing its cool temperatures, low seismic risk, proximity to renewable electricity generation and now direct international connectivity via the Tasman Ring Network. These conditions are seen as vital for hosting AI‑focused facilities, which require low‑latency connections and reliable, stable energy supplies.

University of Auckland electrical engineering expert Professor (Ahorangi) Nirmal Nair, has previously noted that New Zealand’s relatively clean and cheap renewable electricity could be a business opportunity, making New Zealand a ‘go-to’ place to invest in AI servers. In 2024, amid concerns about ChatGPT’s impact on power grids and electricity markets, he said if scaled correctly, New Zealand could increase electricity generation to meet the demand of data centres.

“My sentiment remains still the same,” he says in the wake of Datagrid’s approvals.

“We are in 2026 and now countries and regions are really going after building core-capability of AI and data centes, and New Zealand is still an attractive place to build AI loads supported by our current and growing electricity generation in the immediate coming years.”

Albert Bifet, director of the AI Institute at the Unversity of Waikato, is also positive, saying the approval is an important step for the country’s digital infrastructure. “AI systems require very large computing power, and facilities like this provide the data centres and connectivity needed to train and run modern AI models.”

Similar initiatives are being seen elsewhere, he says, citing Europe’s investment in networks of AI factories connected to high-performance computing centres to support research and industry innovation. “If New Zealand wants to stay competitive in AI, we will need more infrastructure like this.

““The opportunity will be to ensure this capacity benefits the local ecosystem, including universities, startups, and businesses, so that AI innovation can grow within New Zealand.”

Jobs and sovereignty

Another concern raised has been the uneven distribution of benefits. Angus Dowell, a PhD candidate in economic geography at the University of Auckland, says data centre projects like Datagrid often function as nodes in large international cloud networks, whose main value and revenue flow offshore, not to the surrounding region where they are physically located.

“My research on the expansion of big-tech cloud infrastructure suggests facilities like these are often integrated into transnational computing systems whose main markets, customers and commercial returns lie elsewhere,” Dowell says.

“The key issue is therefore not just whether the project brings investment, but how the benefits of that investment are structured and distributed. Infrastructure like this can be physically located in a region while being economically and operationally integrated into wider global cloud and AI systems. Under those conditions, local communities may provide the land, energy and enabling infrastructure, while much of the strategic control and commercial value remains concentrated elsewhere.

“These kinds of tensions increasingly sit at the centre of international debates over data sovereignty and digital infrastructure.”

There’s also the warning that while data centres are frequently promoted by operators – particularly hyperscalers – as job creators, the long-term workforce tends to be small.

While construction tends to create some jobs – Datagrid is claiming 1200 skilled and technical jobs will be created in the construction phase – there are very few new jobs afterwards because most of the operation is automated and remote controlled from places with a pool of IT staff.

Warns Speidel: “Local communities need to think a bit about whether the extra connectivity that comes with the cable is enough payback for them or whether other ways of monetising the data centre’s presence are needed too, such as special rates.”

Construction of the Datagrid facility is expected to start in June, and it is due to be fully operational by 2028.

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The round was led by Peter Thiel’s Founders Fund, which has been a long-time investor in the company, backing it in its Series A round in 2017. Existing investors Blackbird, Icehouse Ventures, DCVC, Bond, Bessemer, Ubiquity, NewView and Promus also participated.

“Halter is beginning its largest ever hiring effort, seeking more than 200 people across product, engineering and customer operations.”

The US$220 million raise is one of the largest-ever in agtech globally and smashes Halter’s own record for the largest VC raise by a Kiwi-founded company. It follows earlier reporting that the round was heavily oversubscribed with some of the biggest names in VC keen to get involved.

Halter’s GPS-enabled collars use audio cues and vibrations to contain and herd both dairy and beef cattle within virtual boundaries, enabling farmers and ranchers to move herds from a smartphone, redrawing fence lines from their smartphone. Animal health can also be monitored through the smartphone, along with pasture management, with live data on animal locations, health and feed availability providing a digital twin of farms and ranches, and providing users with access to complex data points in simple and easy to interpret ways. Versions are available for both dairy and beef cattle, with Halter saying beef farming needs its own technology, not a dairy product repurposed for beef cattle as everything about beef systems varies massively. The company has positioned the systems as full herd management, from a smartphone, at US$5 to US$8 per animal per month.

Since launching in the US in 2024, Halter says American ranchers using Halter have built 60,000 miles of virtual fencing. Globally it claims 645,000 kilometres of fencelines have been drawn since 2024.

Founder and CEO, Craig Piggot, who was recently named Innovator of the Year at the 2026 Kiwibank New Zealander of the Year Awards, says Halter was started because of the belief technology could fundamentally change what it means to run a farm, and enable farmers to use innovation to build long-term futures on their land.

“Our farmers need tools that work and the fact they’re using Halter tells us our technology has earned their trust. This raise lets us bring it to far more of them, and faster.”

Scaling up

As part of the Series E expansion stage, Halter says it is beginning a recruitment drive, seeking more than 200 people – its largest-ever hiring effort. Positions will cover product, engineering and customer operations with many based at its Auckland headquarters. Additional staff will also be hired in Australia and the United States in the coming weeks as well. The company employs more than 300 staff, including a team of more than 100 engineers and designers.

Founded in New Zealand and maintaining an Auckland headquarters, Halter also has Australian operations, based in Melbourne, and a US office, which it opened in Colorado in 2024 following its US$100m Series D funding round.

The company, which topped the 2024 Deloitte Fast 50 Index with 1,539 percent revenue growth and secured $165 million in 2025 to accelerate its global expansion, has rapidly scaled across New Zealand, Australia and the United States, with more than 2,000 farmers and ranchers as customers, and a million of the solar-powered smart collars sold.

The Series E funding round will support several initiatives for the company, which says it will enable it to accelerate its commercial expansion across the United States and fund the roll-out of a range of new products in the coming months.

“Investment will continue across product development, including animal health monitoring and pasture management, shaped by how customers are using the system in the field,” Halter says. “The focus remains on supporting farmers building their operations with Halter.”

The company says it will also enter the United Kingdom and Ireland later this year, along with key South American markets.

Piggot says farmers in the UK and Ireland have long expressed interest in Halter.

“The UK and Ireland are very similar to New Zealand in terms of landscape and climate – we know we can have impact there,” he says.

Halter’s growth sits within a wider movement toward virtual fencing and precision livestock management. Research and Markets has put the precision agriculture market at US$9.5 billion in 2025, with projections to reach US$17.3 billion by 2031.

Across New Zealand and Australia, Halter’s uptake aligns with increasing adoption of agricultural automation.

Founders partner Amin Mirzadegan says while agriculture is a “multi-trillion dollar industry that feeds the world”, it remains one of the least digitised sectors on earth.

“Halter is changing that by bringing software, sensors and AI directly into livetock operations in a way that farmers actually adopt.”

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Offering up $475,000 a year over three years it’s being framed as a productivity booster for manufacturers, with plans for ‘at least 180 manufacturers’ to benefit – to the tune of an average annual $2,638.89 each (to give some perspective, Stats NZ says there’s only around 830 manufacturers with >50 staff).

“The program is premised on a shoestring-but-smart approach: Smaller tech, lower cost, fewer barriers.”

The University of Auckland-led program, which aims to get SME manufacturers adopting ‘practical’ digital tools to improve productivity, build workforce capability and support long-term business resilience, was first piloted in 2022 in partnership with Auckland Council.

Appropriately enough, it builds on the Digital Manufacturing on a Shoestring framework developed by a team from the University of Cambridge’s Institute for Manufacturing.

With its less than $1.5 million in funding for the entire three years, it may feel less like a bold national push and more like a polite gesture made from the loose change of the significant economic benefits the sector delivers – particularly when compared with Australian initiatives, which include a AU$28.7 million Industry Growth Program aimed at strengthening local manufacturing and supporting SMEs.

However, the program is premised on a shoestring-but-smart approach: Smaller tech, lower cost, fewer barriers, faster wins. It uses low-cost, off-the-shelf technologies and open-source software to help manufacturers integrate digital tools into existing operations without major capital investment or complex infrastructure changes. Participants in the program, which is co-funded by participating manufacturers, receive a customised assessment of their operations, guidance on selecting appropriate digital solutions and hands-on installation assistance. Training is also included to ensure factory staff can operate the new technologies effectively.

Small business and manufacturing minister Chris Penk says the program addresses a long-running barrier for manufactures who need the tools international competitors are harnessing, including automation, AI, robotics and cloud computing, to sharpen their competitive edge, but are often held back by cost or concerns about disrupting operations, especially where in-house technical expertise is limited.

A Digital Manufacturing Light Insights paper says while New Zealand has a host of inventive and energetic manufacturing companies creating top-notch products and exporting globally, they produce just over half the output of similar firms in other advanced economies of comparable size.

“Overall, productivity in New Zealand’s manufacturing sector is significantly lower than in many peer countries. In 2022, the industry’s productivity (measured as value added per hour worked) was US$102.40, compared with US$136.29 in Denmark and US$167.04 in Ireland.

“Digital transformation can help turn this around.”

Many businesses continue to operate 20-year-old – and older – machines that are mechanically functioning and, mostly, still producing high quality output but which lack the capability and business benefits offered by modern data collection, connectivity and automation.

A survey of Employers and Manufacturers Association members carried out as part of the development phase of the pilot confirmed key barriers to implementing new digital solutions were cost (identified by 61 percent of respondents), lack of time and resources (54 percent) and challenges associated with existing or legacy systems (52 percent). Those are all areas the program says it addresses with low cost, low risk, solutions that are easy to implement.

“The Digital Manufacturing Light initiative has been designed to help companies ‘dip their toe in the water’, build confidence and enhance both technology and workforce capabilities, while also addressing key barriers to adoption.

Beyond Auckland

MBIE says the new funding, which kicks in from April, will allow the program to support at least 180 manufacturers across Auckland, parts of the Waikato, Northland and the Bay of Plenty, where around 55 percent of New Zealand’s manufacturers are located.

The pilot saw the University of Auckland’s Faculty of Engineering and Design’s Laboratory for Industry 4.0 Smart Manufacturing Systems working with Auckland Council to test and adapt the Shoestring program for the Kiwi market, launching a 12-month Digital Manufacturing Light pilot in July 2025. Twelve Auckland companies took part in the pilot.

Information on the program’s pilot work says to maintain affordability Digital Manufacturing Light provides a pre-developed library of digital solutions sourced from the Shoestring program and developed locally in New Zealand. The solution kits include a detailed list of ‘affordable’ electronic components, all of which can be purchased online from major retailers, along with necessary open-source software to connect the components and create easy-to-understand dashboards. The program also offers a distributed and repeatable method for developing specific solutions, Auckland Unlimited says, and peer-to-peer assistance is promoted.

A survey of EMA members showed top digital manufacturing priorities were real-time digital tracking of internal jobs, capacity and utilisation monitoring and process monitoring (temperature and power). Digital starter solutions for those areas are already available via the Shoestring program, with each of the starter kits costing less than $2000.

Practical improvements expected from the program include more consistent machine monitoring, better visibility of bottlenecks, improved quality control and reduced reliance on manual processes. The Auckland Unlimited documentation on the pilot, is however, somewhat light on the actual benefits seen.

The document is based on two Digital Manufacturing Light pilot projects carried out with Auckland companies Spiraweld Stainless and ABB New Zealand. In Spiraweld’s case legacy machines were retrofitted to provide automation in the pipe welding process, using computer vision to measure a welding gap, a stepper motor to rotate the welding rig knob, a Raspberry Pi microcomputer as a controller and a touch screen. The hardware costs were below $1000, while development costs were around $5000. For Spiraweld, the primary benefit was the ability to weld pipes automatically, freeing the operator to perform other tasks and improving productivity.

University of Auckland Faculty of Engineering and Design Laboratory for Industry 4.0 Smart Manufacturing Systems (LISMS) professor Xan Xu says the pilot demonstrated how the university’s engineering expertise could translate international best practice into practical solutions for Kiwi SMEs.

“Most manufacturing firms are small, operating with limited capital and older machinery. Our Auckland pilot showed that accessible, low-cost digital tools can quickly improve productivity, operational visibility and product quality,” Xu says.

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The State of FinOps 2026 report, from the FinOps Foundation, shows practitioners are now applying FinOps practices across multiple technology categories, with 90 percent managing or planning to manage SaaS, 64 percent handling software licensing, 57 percent managing private cloud and 48 percent overseeing data centre costs. SaaS, licensing and AI are now normalised parts of the FinOps remit.

“FinOps has become a technology value practice moving at the speed of cloud.”

It’s a broadening the FinOps Foundation says is now the norm as organisations chase consistent, value-oriented governance across their entire IT estate. (So great is the change, that the Foundation has updated its mission from ‘Advancing the people who manage the value of the cloud’ to advancing the people who manage the value of technology.)

At the centre is AI – both managing it and using it. The sixth annual report identifies FinOps for AI as the top forward-looking priority and AI cost management as the number one skillset teams must now build. Almost all respondents – 98 percent – now manage AI spend, up from 63 percent in 2025 and 31 percent two years ago, with AI investment spreading across public cloud, SaaS platforms, data centres and private cloud deployments as organisations scale generative AI and machine learning workloads.

“The agenda is dual: Manage AI spend and apply AI to improve FinOps team productivity and the value of AI initiatives,” the Foundation notes. Smaller organisations are balancing AI alongside foundational FinOps work. For larger organisations, however, AI is increasingly treated as a dedicated domain. Either way, teams are preparing for AI-related value management.

The shift reflects the practical complexity of AI economics. AI consumption can vary wildly depending on usage while metrics such as cost-per-token, cost-per-inference and cost-per-training-epoch can complicate forecasting, allocation and showback or chargeback models.

With spend rising and accountability increasing, many organisations report being told to self-fund AI investments through optimisation savings, tying traditional FinOps work directly to strategic technology enablement. However, 53.4 percent also acknowledge they have difficulty understanding the full scope of AI spending, and 40.1 percent say identifying the value derived from spending on AI is a challenge.

Those broader pressures were also highlighted in Flexera’s 2026 IT Priorities Report which showed the operational and financial strain AI is placing on IT budgets globally. The report, which included a survey of 834 IT decision makers in companies with 100+ employees across the Australia, the US, UK and Germany, shows 80 percent of IT leaders say spend on AI applications has increased and 36 percent believe they’re overspending on AI. It noted the ‘critical challenge’ IT leaders now face of preventing cloud overspending in an AI-driven world and the growing importance of FinOps practices.

At the same time, Flexera’s report shows 73 percent of IT leaders reported SaaS and cloud infrastructure costs were up, and 67 percent said cloud costs weigh heavily on their budgets – a trend strengthening the case for disciplined, cross-scope FinOps practices.

Flexera also highlights widespread visibility and governance challenges, noting that IT visibility gaps pose organisational risk, and 58 percent have encountered issue due to unsanctioned SaaS usage.

Rising influence

The State of FinOps report, which is drawn from a survey of nearly 1,200 shows FinOps’ organisational footprint has also expanded. Seventy-eight percent of FinOps teams now report to the CTO or CIO, up 18 percentage points since 2023, signalling FinOps’ transition from a finance-aligned function to a technology-embedded discipline.

Those engaging with executives were much more likely to influence technology selection, with those with C-suite engagement, rather than just ‘director level’ showing 2-4x more influence over technology selection.

FinOps leaders are increasingly participating in strategic provider negotiations, multi-year investment decisions and M&A technology due diligence, with some influencing decisions about labour versus AI technology investment.

There’s also a shift left happening, with financial requirements are being embedded into financial requirements earlier in the engineering and product lifecycles, allowing teams to make informed decisions pre-deployment, rather than remediating after the bill arrives. Pre-deployment architecture costing has emerged as a top desired tool capability and FinOps teams are engaging with platform engineering and enterprise architecture teams, building pricing calculators and offering pre-deployment guidance. However, the Foundation warns, incentives haven’t caught up and there’s a need to identify how to give developers credit for ‘shift-left’ activities.

The report also shows FinOps practitioners are growing outside of the traditional stronghold of North America, including in Asia Pacific.

While no specific reference is made to Australia and New Zealand findings, the broad themes map closely to local developments, where cloud dependence, AI experimentation and governance mandates are reshaping financial oversight.

And one final takeaway from the report: It shows more respondents are now prioritising governance, forecasting, organisational alignment and managing expanding technology areas then optimisation and efficiency alone. “Mature practices increasingly focus on unit economics, AI value quantification and influencing technology selection, reflecting FinOps evolution from tactical function to strategic discipline,” it says.

“The technology area data speaks for itself: SaaS, licensing, private cloud, data centre, AI, and even labour are now normalised parts of the FinOps remit, managed with the same discipline once reserved for public cloud infrastructure,” the Foundation says. “FinOps has become a technology value practice moving at the speed of cloud.”

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“Once these foundations are established, the lessons learned – both technical and institutional – can be applied to other sectors.”

Koronios, founding CEO and managing director of the Australasian Space Innovation Institute (ASII), says the digital twin, launched last month and a flagship initiative for ASII, isn’t just another farm app or dashboard, it’s a chance to rewrite how a climate-exposed, globally competitive sector makes decisions, replacing delayed, fragmented information with AI-enabled ‘what if’ scenario modelling across climate resilience, biosecurity, water management and productivity, enabling decision-makers to test options, anticipate risks and optimise actions before implantation.

And the benefits won’t just be reaped by the agricultural sector with Koronios telling iStart the initiative will establish a national capability in digital twin infrastructure and space-enabled intelligence, which can progressively support multiple sectors of the economy.

“Agriculture provides an ideal first application because it allows us to develop the core architecture, governance frameworks and data integration methods that are necessary for large-scale digital twins. Once these foundations are established, the lessons learned – both technical and institutional – can be applied to other sectors.”

He says the same principles used to integrate satellite observations, environmental data and modelling tools for agriculture could also support digital twins for water systems, natural ecosystems, coastal environments or disaster management.

Real-time national picture

The elevator pitch is simple – but bold: Bring satellite earth observation data, sensors, climate records, soils, agronomic models and the wealth of other data already available into a single sovereign, AI-enabled system that mirrors conditions on the ground and updates continuously. The digital twin aims to end the fragmentation that has existed in agriculture and turn the abundance of data into decision-ready intelligence that can be used with confidence.

For Meat and Livestock Australia, who along with Elders and Charles Sturt University are backing the initiative, the prize is speed and certainty. Michael Lee, Meat and Livestock Australia’s group manager for science and innovation, told iStart the twin could ultimately reduce risk and potentially cut years from research cycles.

By putting hypotheses through a virtual R&D engine first, teams can refine and narrow failure modes, deploying only what looks likely to work. Producers, in turn, could see more accurate grazing plans, better timed interventions and lower operating risk, with the potential to also unlock provisions for stronger evidence for sustainability and traceability requirements – something brand owners could be rewarded for in a margin-tight industry, where proof that travels cleanly through the value chain is money.

“We are expecting that the digital twin will support evidence-based scenario testing by combining satellite imagery, climate data and agri models in one system. Industry can use this to then compare stocking plans, pasture strategies or herd timing against various climate outlooks and assess expected changes in productivity, groundcover and emissions intensity.”

This supports the kind of repeatable and transparent assessments needed by producers, researchers and other supply chain partners, which could even include banks and other policy advisors who are looking for analytical intel on how agriculture is performing and where it is heading, he says.

Lee has a long list of use cases that most excite him. Top of the list is forecasting pasture growth and testing grazing strategies under different seasons. Climate and drought scenario planning supporting early and confident decisions; landscape pest, weeds and biosecurity modelling for coordinated responses; testing water and infrastructure options for improved productivity and animal welfare and emissions and natural capital modelling using satellite data and agronomic models also feature.

Koronios has a similar list, with the addition of carbon and sustainability monitoring. “As global markets increasingly demand proof of sustainable farming practices, the digital twin could help measure land condition, vegetation cover and carbon outcomes across farms, giving Australian producers a credible way to demonstrate environmental stewardship,” he says.

“What excites me most is that these applications are not futuristic concepts. The underlying technologies already exist. The digital twin simply brings them together into a single intelligence platform that helps farmers make better decisions every day.”

Phased, with challenges…

The program will be delivered in a phased development approach, with Koronios stressing that practical benefits will be realised progressively, rather than only at the end of the program.

First up is the formal establishment of the program’s governance structure, including a steering committee and key delivery partnerships. Koronios says initial workstreams will focus on designing and building the core digital twin platform while working with industry and research partners to validate the first practical use cases.

“During this phase the emphasis will be on developing and testing the foundational capabilities: Integrating key data layers, building analytical tools, and demonstrating how the system can support real-world agricultural decision-making,” he says.

Importantly, early pilot deployments will allow farmers, agronomists, industry partners and government agencies to begin using and benefiting from the platform as it evolves, rather than waiting for a fully completed system. Koronois says these early deployments will provide immediate value while also helping refine the models through real-world feedback.

As the platform matures, the program will expand from pilot deployments to nationally scalable operational services, incorporating additional datasets, analytical models and regional applications. With each phase, new capabilities and insights will become available to users, expanding the value.

“Ultimately, the National Digital Twin for Australian Agriculture is conceived as a long-term national capability – a digital infrastructure designed to support Australia’s agricultural sector for decades to come. Much like national mapping systems or weather forecasting networks, it will act as a shared digital backbone for agricultural intelligence, supporting productivity, climate resilience, biosecurity and evidence-based policy.”

There are, of course, technical challenges, the biggest of which will be bringing together all the agricultural, environmental and satellite data sets into a single, consistent system that can operate across an entire continent.

Koronios notes currently data, models and insights remain fragmented across jurisdictions, research programs, Research and Development Corporations and proprietary platforms. “This fragmentation has resulted in duplication, inconsistent standards, slow translation of research into practice and rising costs for levy payers and taxpayers alike.”

Each of the datasets, which come from a wide range of sources including satellites, weather systems, soil databases, farm sensors and government programs – has different formats, resolutions and update cycles. Harmonising those datasets so they can be combined into a coherent, real-time model will be no mean feat.

One of the most important layers is the satellite earth observation data, which provides frequent updates on vegetation health, crop growth, pasture condition and land use across the entire country, every few days and in a few cases as frequently as daily. “This gives us a consistent, continent-wide view that simply isn’t possible from ground observations alone,” Koronios says.

Soil and moisture data will be another critical layer, helping farmers and advisors understand water availability and plant stress. When combined with weather and climate data it becomes possible to anticipate drought conditions, irrigation needs and crop development patterns.

Farm-level and environmental data, such as sensor measurements, land management information and water systems will also be integrated, providing the local detail needed to translate satellite observations into meaningful insights for individual farms.

Biosecurity and environmental monitoring datasets will also be included, helping detect changes in vegetation patterns that could signal pests, disease outbreaks or land degradation.

“The real value comes from combining these layers, because when they are analysed together they reveal patterns and trends that would not be visible in any single dataset,” Koronios says. “This is a current gap in the ecosystem.”

Scale is another challenge, Koronois is preparing for, with Australia’s agricultural regions spanning millions of square kilometres. “The system must process very large volumes of data continuously, while still delivering useful insights at the level of individual farms or paddocks.”

He says modern cloud computing, AI and advanced observations will address those issues to integrate and interpret data streams. “Rather than trying to centralise everything in one system, the digital twin works as an intelligent platform that connects existing systems and continuously updates the model as new data arrives.”

The final challenge is ensuring information is practical and usable for farmers and advisors, not just technically sophisticated, he says. That means designing tools and dashboards that translate complex data into clear insights that support real-world decisions.

“We are embarking on a journey where the priority is not the volume of data, but the acceleration of technology adoption. We want to ensure that the data we ingest translates into high-value insights and practical tools that the industry can trust and use with ease. The Digital Twin will work by integrating multiple layers of data that together describe what is happening across Australia’s agricultural landscape.”

Over time other information sources will be integrated, particularly as Australia’s sovereign earth observation capabilities advance and tech such as IoT networks with intelligent sensors are increasingly deployed across agriculture and related sectors.

“Ultimately, the Digital Twin is not a destination with a fixed finish line. It is a living R&D engine designed for continuous progress and evolution. There is no ideal amount of data, as the system is designed to learn and improve as we move forward.”

There’s a broader national dividend here, too. A sovereign digital capability for agriculture is a food‑security asset as much as it is a productivity play. It reduces reliance on offshore analytics to interpret Australia’s land and climate signals, while creating a platform for local companies and researchers to build exportable services on top. In Koronios’s framing, the twin strengthens food systems and regional economies today while laying tracks for tomorrow’s cross‑sector twins – water systems, disaster resilience, coastal environments – a reusing the architecture and governance patterns forged in agriculture.

Koronios says in practical terms the twin is designed as an open, modular platform that different users will interact with in ways that suit their needs. For agronomists and advisors, the most common interface will likely be intuitive dashboards and decision-support tools that translate complex datasets, such as satellite observations, soil moisture and weather data, into clear insights about crop health, risk conditions and management options. For agtech companies and software developers, the platform will provide APIs that allow them to integrate digital twin data directly into their own applications and farm management systems. “This means companies can build specialised tools, such as irrigation optimisation models, yield forecasting systems or sustainability monitoring platforms, using the digital twin as the underlying intelligence layer.”

Researchers and advanced users will also be able to access modelling environments and analytical tools to develop new algorithms, predictive models and agronomic insights.

“The platform is not intended to be a closed system controlled by a single organisation. Instead, it is conceived as a national innovation platform that allows multiple organisations – agtech companies, research groups, industry bodies and government agencies – to build services and applications on top of the core infrastructure.

“In that sense, the digital twin acts as a shared intelligence layer for agriculture, enabling an ecosystem of tools and innovations to emerge around it, while ensuring that the underlying data and analytical capabilities remain consistent, trusted and nationally coordinated,” Koronios says.

“If we get this right, the Ddigital twin will become something that future generations of farmers simply take for granted – much like weather forecasting or satellite navigation today – because it supports better decisions across the entire agricultural sector.”

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Currently in beta, the new suite of AI agents and features will progressively roll out across MYOB’s product portfolio including MYOB Business Lite, Pro and AccountRight, and aim to tackle one of the most persistent challenges facing SMEs: Time.

“Small improvements quickly add up to big results.”

Paul Robson, MYOB chief executive, says MYOB is targeting business pain points ‘ready for reinvention and transforming how customers and partners operate, unlocking a step-change in productivity through efficiency and insight’.

The new SME-focused AI features land against a wider backdrop of MYOB’s ongoing AI work across its wider platform ecosystem and a push to encourage local businesses towards becoming an ‘autonomous business’. Late last year Valantis Vais, MYOB general manager for product, product marketing and design told iStart that ‘practical’ was a key aspect of that push. While midsize businesses are curious about AI, they’re also wary of hype and sunk costs, wanting tools that provide practical benefits in the here and now, rather than promises of a sci-fi future.

He detailed to iStart a range of AI features going into Acumatica ERP solution, including accounts payable bill entry powered by OCR and semantic interpretation, expense management with AI-driven receipt capture, AI advisor anomaly detection and Auto Complete.

The new rollout extends the AI features to smaller businesses, including sole traders using Lite, as well as the more complex mid-market companies using AccountRight.

According to MYOB’s latest Business Monitor, 24 percent of employing SMEs say late payments exert significant pressure on their operations. The company believes embedding AI directly into existing workflows, with the likes of smart invoice reminders, automated reconciliation and AI-driven business insights, is key to unlocking productivity boosts without disruption.

Making sense of numbers and smart reconciliation

At the heart of the latest wave of promised updates is an AI Business Insights feature which will provide interactive charts and commentary to allow businesses to identify patterns and establish areas which need attention. MYOB says it will ‘plainly’ tell the story behind the numbers, providing easy-to-digest explanations for businesses, and a quicker avenue to surface trends and identify performance drivers in preparation for advisory-focused conversations for accountants and bookkeepers.

Another major addition will be Smart Reconciliation, which uses machine learning to categorise and auto-reconcile transactions based on user behaviour and pre-set schedules. Bank feeds are matched automatically, reducing hours typically spend on repetitive admin.

For small businesses, this means real-time visibility of expenditure and cashflow – an essential advantage in volatile trading conditions. For advisors MYOB says the feature means fewer errors and cleaner files when compliance deadlines loom, reducing the time spent tidying data before submission.

The focus on practical time savings echoes themes raised in MYOB’s earlier mid-market Acumatica rollout, where early adopters reported savings of upwards of 20 hours a month thanks to automation in accounts payable. While the new release doesn’t replicate those features, it shares the same underlying goal of removing manual volume so human effort can be redirected to higher-value decisions.

Behavioural cues to tackle late payments

The Business Monitor data shows late payments remain a stubborn issue for small businesses. MYOB’s Smart Invoice Reminders aims to address that, analysing late payer behaviour to recommend actions and tone, with customisable scheduling of automatic reminders.

For owners, MYOB says the offering will reduce administrative load, while providing clearer visibility of expected cashflow to reduce uncertainty in planning conversations for advisors.

Robson says the approach reflects the company’s belief that small improvements quickly add up to big results for local SMEs.

“AI can completely change the game for small businesses and their advisors, powering up productivity and accelerating innovation beyond anything we’ve seen before,” he says.

The company says it has guardrails and evaluation measures in place to ensure the accuracy and safety of its AI outputs, but does admit AI can still get things wrong. Users can view the context and data source of suggestions to review them.

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Lachimea, chief corporate officer for the Australian manufacturer and distributor of steel products, is clear that technology is a fundamental requirement for his industry – not only to enable operational efficiencies, but to remain competitive.

“Over the next three to five years, the biggest differentiator will be deeper system integration with key customers and suppliers.”

“In the steel industry, differentiation comes from service, not the product,” he says.

“Over the next three to five years, the biggest differentiator will be deeper system integration with key customers and suppliers,” he told iStart. “Seamless data sharing will reduce friction, minimise errors and improve speed to market.”

Reduced manual keying errors and processing delays will also be key.

“Businesses that eliminate those inefficiencies will have a clear service and cost advantage,” Lachimea says.

The focus on eliminating friction has shaped a broad digital roadmap for Apex, which has adopted a progressive modular approach, upgrading its warehouse management systems (WMS), integrating with SAP Business One, introducing analytics to guide planning and deploying Zebra technologies to modernise frontline workflows.

While a deployment of Zebra ultra-rugged mobile computers, printers and barcode scanners might be a highly visible step which has garnered the company attention, Lachimea says the foundations sit much deeper.

“Our ERP and WMS platforms form the backbone of our operations, supported by analytics and planning tools that drive informed decision making across procurement, production and customer service.”

The objective is not simply to capture more data, but to ensure operational performance is visible. “This allows us to respond faster to customers and maintain tight control over stock, production scheduling and delivery performance.”

The company previously relied on a legacy paper-based system, which led to inaccurate stock counts and fulfilment delays and hampered the company’s long-standing stated goal of setting itself apart through customer service.

The modernisation has included a combination of mobile computing, barcode scanning and industrial printing, alongside the Warehouse Management System upgrade designed to connect seamlessly to Apex’s SAP Business One system.

Lachimea says the new workflow has dramatically reduced order-receiving time.

“Receiving orders could take up to an hour. With Zebra’s MC9 series mobile computers, it now takes 10 minutes, making our team six times faster.”

Orders are now received digitally, entered directly into Apex’s systems, and automatically nested with similar jobs to improve production efficiency.

The new workflow provides a single source of truth for inventory. On the shop floor, barcode scanners validate every steel coil’s colour and gauge before cutting, preventing material waste and expensive rework. Industrial printers automate the final labelling stage, ensuring every finished pack is correctly identified to prevent shipping errors.

The improvement in inventory visibility has produced a measurable service impact. “We can tell a customer immediately if we have an item in stock and commit to next-day delivery with 99 percent confidence.”

The digitisation effort has also changed how operational information flows through the business with Zebra’s solutions working with the WMS to enable real-time visibility of stock, improved accuracy and instant data sharing across the business.

“This has empowered planning and purchasing decisions by moving from historic forecast-reliant processes to data driven decisions. It also enables more frequent stock validation and faster investigation of unusual variances.”

From a customer perspective, the biggest opportunity is confidence. “We can confirm availability more readily and provide more accurate delivery timelines, enhancing overall customer experience.”

Tech as a workforce strategy

The technology is also a workforce strategy. Lachimea emphasises automation is a support for Apex’s team, rather than a replacement. Reducing administration and paperwork enables team members to focus on activities such as customer engagement, supplier collaboration and problem solving, all areas he identifies as critical to service outcomes. “We see digitalisation as enabling our expertise to be applied where it matters most, in delivering service.”

Every transformation project comes with cultural and procedural challenges, and Apex’s has been no exception. “Any system rollout requires buy-in from everyone,” Lachimea says. Not all benefits are immediately visible at the frontline and adjusting established habits takes time. However, once improvements become clear ‘adoption accelerated quickly’.

The lesson, he says, is that process discipline and training are just as important as the technology itself.

Beyond the frontline digitisation, Apex is taking a pragmatic approach to the architecture supporting its operations. “We operate within a hybrid architecture,” Lachimea explains. Legacy systems remain in place that continue to perform well, but they are being progressively upgraded and integrated into a more connected, cloud-enabled environment.

“Our focus is on modular and scalable systems that can evolve with the business rather than wholesale replacement for its own sake.”

Looking ahead

Lachimea says the next wave of automation will focus on accounts payable and accounts receivable automation, including digitising supplier invoice processing, matching delivery dockets to invoices, automating reconciliations and streamlining collections and payments.

Looking further ahead the company is exploring real-time sensors, along with expanded reporting capability and further automation opportunities.

“A major focus is equipping our customer service team with enhanced visibility tools so they can proactively support customers,” he says, adding that technology investments will continue to be guided by improving service outcomes.

“Our commitment to service and reliability has not changed, but the way we deliver it continues to evolve. By integrating modern software and hardware platforms, we reduce manual touchpoints, improve data accuracy and ensure we meet and exceed our customers’ expectations for quality and reliability.”

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Both trends reflect a deeper shift underway in enterprise IT. Despite predictions that AI would streamline or consolidate technology portfolios, the 2026 SaaS Benchmark Report from Torii shows the opposite has occurred with AI adoption accelerating software sprawl, expanding shadow IT and pushing usage far beyond what governance and procurement teams can monitor or control.

“The applications most likely to exceed their contracted spend limits are disproportionately AI-powered.”

The report found the average enterprise now runs more than 830 applications, with over 61 percent operating outside formal IT oversight, creating the perfect environment for overspend to flourish and highlighting rather than scaling neatly, stacks compound – especially in the long tail of apps that never touch procurement.

“Most benchmarks undercount apps because they only look at what procurement touched. The majority of apps show up elsewhere – browser activity, direct signups and usage than never becomes a purchase order,” the report says.

 More than half of the top shadow IT apps are pure-play AI tools, with nearly 700 new AI applications entering the enterprise environments in the past year.

“These tools didn’t replace legacy software, they layered on top of it, accelerating sprawl while quietly redefining productivity.”

And while AI didn’t create shadow IT, it has dramatically increased its speed and blast radius, Torii says. “These tools connect deeply, gain broad access instantly and often persist long after teams stop using them.”

The report’s data on overage frequency reveals that the applications most likely to exceed their contracted spend limits are disproportionately AI-powered. ChatGPT tops the list, exceeding its contracted spend limits more than 35 percent of the time. It is followed closely by productivity and project management platform ClickUp, Keeper Security and workflow automation tool n8n, all with overage 33 percent of the time.

Zoom, long embedded in enterprise environments, exceeds its contract 30 percent of the time, while data movement platform Fivetran and Claude AI also generate overages at notably high rates. Snowflake, a data platform with consumption-based billing, exceeds contracted amounts 22 percent of the time, while tools such as OpenAI, Cursor AI, Anthropic, ‘AI-powered’ unified IT and security platform Iru round out the list.

The overage intensity data shows a sharp divergence in how severely different applications exceed their contracted financial limits, underscoring how a small subset of – largely AI – tools can disproportionately damage enterprise budgets.

While most create only modest overruns – such as n8n at 0.3 percent, Snowflake at 1.7 percent, Claude AI at 2.8 percent and Iru at 3.5 percent – others are leaving significant scorch marks on the budget. Cursor AI is the biggest offender, with a median overage of 20.5 percent. ChatGPT follows at 13 percent, with Anthropic at nine percent.

The report notes much of the variance which leads to applications consistently exceeding contracted ceilings is directly attributable to consumption-based pricing.

The central theme connecting these applications becomes clear in the context of Torii’s broader findings. The report notes AI-first tools have become a ‘dominant source of individual software use’, adopted rapidly and often without formal approval as employees search for productivity advantages. Because many of these tools rely on usage-based billing tied to tokens, compute cycles, queries or automated workflows, their consumption can scale dramatically with even modest increases in activity. At the same time, AI tools frequently rely on OAuth-based permissions and instant integrations that connect directly to corporate data.

As AI tools generate more data and trigger automated processes, downstream platforms are also experiencing heightened load from rapidly expanding data flows. Meanwhile, even established tools like Zoom and ClickUp exhibit a mix of entitlement drift, auto-provisioned features and inconsistent de-provisioning practices that lead to unexpected consumption growth.

Torii’s analysis shows as organisations run ever-larger portfolios, traditional controls break down. Employees interact with an average of 40 applications each day – productivity when managed, risk and waste when it isn’t.

But there’s also a parallel problem, with widespread overbuying, as shown by license utilisation data showing where unused licenses and stale access are creating a SaaS landscape littered with inactive accounts, unused licences and lingering access – with spend and risk quietly piling up.

Salesforce sits at the top with as the most overbought app with a staggering 55 percent non-utilisation rate, meaning more than half of purchased licenses are going unused. PagerDuty follows at 45 percent with Monday.com at 40 percent and Iru at 39 percent.

Well established enterprise tools including Zendesk (35 percent), 1Password (33 percent), Zoom (32 percent), Adobe (30 percent), Atlassian (28 percent), DocuSign (27 percent), Calendly (25 percent) and Slack (24 percent) all show double-digital non-utilisation.

The findings underscore a chronic imbalance in enterprise purchasing as the desire to ensure employees have access to tools they might need leads organisations to over-license, even as actual usage patterns remain uneven and unpredictable.

Meanwhile, 2.5 percent of license seats on average are assigned to offboarded users in ‘identity decay’, with the zombie accounts providing a significant security surface area and wasted budget.

The presence of Zoom on both lists – exceeding contracted ceilings 30 percent of the time while simultaneously leaving 32 percent of its purchased licenses unused, exemplifies how chaotic enterprise software management has become.

“Software adoption no longer follows centralised or predictable paths,” Torii says. “Our data shows that governance gaps aren’t the result of missing policies, but of speed. Applications, especially AI tools, are being adopted faster than traditional procurement and identity controls were designed to handle.”

The answer, Torii says, is governance models built for continuous discovery, not annual reviews.

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Ronil Singh, Robert Half regional director, says businesses have started to see potential growth for the next 12 months ahead – meaning they also need to expand their teams.

“Businesses are coming to a realisation now that some of these projects are for the long-term benefit for their business.”

“We’ve started to see a slow lift in the business transformation domain,” he told iStart. “Businesses paused a lot of projects in the last 24 months, but they’re coming to a realisation now that some of these projects are for the long-term benefit for their business.”

As optimism grows, board approvals for large-scale digitalisation and ERP projects are slowly coming back.

Part of the resurgence is driven by practical necessity: At least one major ERP provider has an upcoming end of mainstream maintenance deadline approaching, forcing affected companies to reassess their platforms.

But Singh emphasises the bigger driver is strategic. Organisations are now prioritising faster access to better information, stronger analytics and the ability to make good decisions from trusted data. Those needs, in turn, require more modern systems and, in many cases, a unified ERP.

Others are exploring bolt-ons, including BI tools, reporting modules and integration layers, to extract more value from existing platforms without committing to full system replacements. Integration and transformation specialists, are among those seeing the first signs of renewed demand.

Unsurprisingly, AI and data is also an area gathering momentum along with demand for security engineers. The three are seeing the fastest growth.

Among permanent roles, senior software developers, AI tech leads, data, security and systems engineers, and IT support are the most in demand roles according to the 2026 Robert Half Salary Guide. For contractors, it’s systems/network engineers, IT support, business analysts, data engineers and senior software engineers who are most in demand. And when it comes to technical skills its .Net Core, Typescript, Python; Snowflake, dbt, Databricks and ERP systems including Netsuite, Oracle, Microsoft Dynamics 365 and SAP S/4Hana.

But the growth isn’t a return to the frenetic post-Covid boom. Instead, Singh says New Zealand is in a period of measured optimism, where every hiring decision must be justified, every dollar of investment must prove its value, and every piece of talent must be strategically retained.

Over the past 18 to 24 months, the market has undergone a correction. Following the pandemic, organisations found themselves in an over-heated tech environment. Transformation programmes were everywhere, SaaS adoption was exploding and demand for developers surged. When recessionary pressures began to bit, software development teams were the first to feel the impact through downsizing, as companies shifted from expansion to survival mode, Singh says.

“Large development teams that were required during the boom became less important,” he says, noting that teams were pared back as organisations conserved cash and paused big capital spend and major programmes of work. That slowdown pushed a wave of candidates into the market and created a period of uncertainty.

Hiring scrutiny

Despite the wider market challenges, many organisations never stopped hiring entirely. Instead, they became far more selective. Singh says in the past 12 months, companies have been willing to move decisively on roles they deem essential, particularly those requiring hard-to-find skill sets.

What did change, was the level of governance around those decisions, with hiring centralised and many organisations introducing CEO-level approval gates. New roles often require approval before recruitment can begin, approval during the interview process and then again before the offer goes out.

Now, however, confidence is increasing on both sides of the equation.

The Salary Guide shows 80 percent of tech leaders say the economic outlook will positively impact their approach to setting salaries this year. On the candidate side, Singh says people are starting to ask for pay rises from their current employers – and those employers, according to the Salary Guide survey, are open to having discussions around increases.

But Singh warns that the market is not shifting back toward large, double-digital pay jumps. “Businesses are not in a position to give massive pay rises,” he notes.

Instead, the return of salary negotiation willingness reflects two strategic needs: Forecasted business growth which will require expanding teams over then next 12 months; and the increasing importance of retaining strong performers, particularly as skill shortages intensify.

The tightening labour market will prompt companies to earmark top talent and consider where salary adjustments – and other benefits – may be needed to reduce flight risk.

With that in mind, Singh says performance now plays a more significant role than ever. He says employees who show discretionary effort – going beyond their formal responsibilities, putting their hands up for new projects and embracing learning opportunities – are better positioned to negotiate. In a lean, SME-dominated economy like New Zealand (and Australia), employers increasingly value those who can wear multiple hats and stretch into adjacent areas.

Retention becomes make-or-break strategy

As the labour market tightens, companies face the challenge of preventing their top people from leaving.

Singh says counter-offers are already rising – but remain largely ineffective. Once a candidate has gone through the process of deciding to leave, identifying what the next role – and employer – needs to look like, interviewing, meeting a prospective manager and imagining their next career step, the ‘horse has bolted’, he says.

Even if the counter-offer is accepted, the employee often leaves within six to 12 months anyway. The Salary Guide shows 98 percent of tech leaders say they have extended a counter-offer to a worker who received an external offer. Forty-three percent of those were rejected – or accepted only to have the employee leave within 12 months. AI, data engineering and automation were the roles where counter offers are becoming most frequent.

Instead, employers need to get ahead of potential dissatisfaction. “Think about how you can be more proactive as an employer so they don’t have to get into that position.”

Singh notes that the three key reasons people move on are cultural fit, lack of growth and development and compensation. He urges businesses to ‘think outside the box’ and consider the benefits that they can offer to retain staff, whether its flexibility, learning and development budgets, more support or mentorship.

“There are different ways to skin a cat and not all employees are looking for a significant pay rise. What they are looking at is the cost of living… and at the same time they want to feel valued.”

He gives similar advice to employees as well, urging them to have a conversation with their direct manager before looking elsewhere. “If you’re happy with the organisation, the leadership team, what the business purpose is and the only thing that’s stopping you from being totally happy is your compensation, have a conversation. Because if you don’t you will never know what your options are, and you don’t know what they might be thinking and planning in the background.

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In a new analysis of ‘physical AI’ – which spans humanoid robots, autonomous vehicles, industrial automation and drones – Barclays is forecasting the market to reach US$500 billion to $1.4 trillion by 2035 depending on adoption scenarios.

“Humanoid robots are no longer a futuristic fantasy, but a pragmatic tool for operational transformation.”

Autonomous vehicles are leading the way, with Barclays noting that development of them has been underway for nearly a decade, production closely aligns with existing automotive supply chains and there is already large volumes of real-world driving datasets that models can be trained on.

The AI Gets Physical forecasts autonomous vehicles to be an up to US$550 market by 2035. Drones and industrial systems will follow as major contributors.

The market for humanoid robots, meanwhile, is forecast to reach between US$30 billion and $200 billion by 2035, an order of magnitude bigger than the 2025 range of $2-$3 billion, with warehousing and logistics expected to account for around a third of humanoid applications by 2027 according to Counterpoint Research referenced by Barclays.

For the record, Barclays defines humanoid robots as those designed to behave and look like humans, built for human centred environments and tasks. Advanced industrial automation includes AI-enabled robots performing physical tasks in factories and logistics, including collaborative robots (cobots), AI-guided robotic arms, autonomous mobile robots and warehouse robots for picking, sorting and transport.

The report notes while humanoid robots are constrained by more limited physical AI training data, the complexity of integrating models and hardware control systems and battery limitations, global deployment momentum is already visible, with around 15,000 new ‘installations’ in 2025. China accounted for 85 percent of those, with companies like AgiBot, Unitree and UBTech leading the way. The three accounted for nearly 56 percent of global sales last year, with those sales exceeding $500 million, according to Counterpoint. AgiBot, whose robots are used across entertainment and performance, services and guidance, data production and intelligent manufacturing, pulled in revenue of more than $140 million, just two years after launching its first humanoid offering. (It also offers a RaaS – renting as a service – business model, lowering the barrier for adoption of the robots.)

Not to be outdone, Tesla announced during its Q4 earnings call that humanoid robots are one of its core growth priorities now. Its Optimus robot is projected to cost between US$20-30,000. Electric vehicle competitor Hyundai, also has a play in the market, through its subsidiary Boston Dynamics, which plans to launch a US$130,000 Atlas robot, which is being pitched as a production-ready, enterprise grade robot for factory work. Early use cases will focus on automotive line work which involves repetitive work and awkward postures.

The report notes that potential use cases for humanoid systems are beginning to crystalise as labour dynamics become more pronounced due to an aging population.

Industrial robots used by the likes of Amazon and Walmart in their supply chains are also helping highlight where systems designed to perform specific tasks may eventually reach their limits, Barclays’ says, opening the doors for humanoid offerings.

While warehousing and logistics is expected to be the top application for the robots come 2027, at 33 percent, automotive (24 percent), manufacturing (15 percent), and retail and service (12 percent) are also expected to reap the benefits.

Forrester is also bullish about the future of humanoid robots. Charlie Dai, Forrester VP and principal analyst, says the robots are no longer a futuristic fantasy, but a ‘pragmatic tool for operational transformation’.

Forrester’s Automation Survey 2025 reveals that 69 percent of automation decision-makers are adopting or planning to adopt humanoid robots, with early deployments in manufacturing, logistics, healthcare and customer service. In fact, companies are already reporting benefits with 40 percent reductions in processing errors and 20 percent decreases in labour costs when the humanoid robots standardise repetitive, high-friction workflows.

Forrester points to BMW’s use of the robots for ergonomically challenging assembly tasks and Keenon Robotics reducing restaurant labour costs by 20 percent through automated food preparation and cleaning. Other cases cited by Forrester include Singapore’s Sengkang Community Hospital which is using Dexie – a social robot – for multi-lingual dementia care. The systems are augmenting, rather than displacing, employees, Forrester stresses.

But the rapid progress also comes with a warning, with high R&D costs, deployment complexity and regulatory uncertainty expected to continue to slow broad adoption. While breakthroughs in generative AI, physical AI and AI-native cloud platforms are rapidly expanding robot capability and lowering development time – Nvidia’s Isaac GR00T-Dreams cut model development from three months to 36 hours – Forrester warns that humanoid robots still require significant investment in hardware, software and workflow redesign, while cybersecurity, liability and safety frameworks remain underdeveloped.

Dai is urging leaders to approach the technology with ‘disciplined experimentation’. Targeted pilots, rather than widescale deployments, will be the name of the game for the next two years.

“The next two years are critical: Those who take a measured, strategic approach will position themselves to unlock significant value as the technology matures, while avoiding the pitfalls of premature or overhyped deployment.”

Barclays warns that adding humanoids to the workforce could fundamentally change cost structures as OpEx costs give way to higher CapEx expenditure on robotics – a move the company says could strengthen margins and boost valuations with companies moving from variable labour costs to more stable, depreciable assets. Like Forrester, Barclays says this isn’t a story of robots replacing humans, but instead one of workforce augmentation and emerging investment opportunities.

Large scale deployments signal inflection point

Some of the world’s largest retailers offer insight into how physical AI is already influencing supply chain operations. Amazon operates more than one million robots across its fulfilment network, with systems including Sequoia, which brings inventory to employee workstations; Proteus, which moves order carts alongside workers; and Vulcan, which navigates cluttered spaces using sight and touch.

As part of Amazon’s fulfilment centre design, the robotics systems are expected to reduce cost-to serve by around 25 percent during peak periods, while also providing streamlined stowing, picking, packing and shipping workflows and lowering processing times.

Walmart is following a similar path. Barclays reports Walmart’s latest generation of more automated fulfilment centres are approximately twice as productive as legacy facilities. Current deployments focus on strenuous physical tasks such as lifting products on and off pallets, and AI-assisted tracking helps reduce damage to fragile and fresh goods. Robotics are also improving pickup and delivery speeds across stores as part of the company’s wider supply chain modernisation program.

Barclays notes that while many warehouse tasks have been automated, others remain resistant because they require human-like dexterity or the ability to handle objects, navigate tight spaces or adapt to unstructured conditions. Humanoid robots are designed for environments built around people, offering the potential to perform a wider variety of tasks without requiring facilities to be completely redesigned.

Digital twins and edge necessities

A significant enabler of physical AI is the use of simulation and digital twin platforms, which allow robots to be trained safely and efficiently before real-world deployment.

Physical AI models lean heavily on simulators to recreate the real world. While both physical and cognitive AI require huge amounts of data to train the model, physical AI requires much more complex inputs from the 3D world including images, video, text, speech and real-world sensor data.

“These platforms run ‘digital twins’ of factories, warehouses or even entire cities, essentially video games for robots.”

It notes the simulator to real world transition remains a key bottleneck in physical AI training, since no simulation can fully capture real-world unpredictability.

Edge computing is another foundational requirement. Large models are trained in data centres using cloud compute, but robots must run models locally – on device – to respond instantaneously to real-world stimuli.

“Physical AI is the toughest frontier in AI because these systems must master physics, causality and time to truly work in the real world. In practice, this evolution transforms AI from a tool for efficiency and knowledge synthesis into an active agent of physical work within the real economy.”

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