Productivity gains from technology lagging

17:00, Jul 26 2013

Computer and technology innovations play a vital part in improving the service sector, but Kiwi firms are not extracting the full potential of these technologies, a new report suggests.

The Productivity Commission is inviting public feedback on the first of a two-part initial report from its inquiry into service sector productivity.

Services such as using the internet, dining out or visiting the doctor make up the largest sector of the New Zealand economy.]

But the sector's production growth is close to levels in the primary and goods-producing sectors, which have lagged behind the average of Organisation for Economic Co-operation and Development countries since the mid-1970s.

Chief commissioner Murray Sherwin said that even though New Zealand had invested in information and communications technology at a relatively high rate, many firms had failed to turn that investment into sufficient productivity growth. "We're not getting the gains out of it," Sherwin said.

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