Govt Expands Digital Manufacturing Drive to Lift Productivity

“In an increasingly digital world, overseas competitors are reaping the rewards of greater automation, artificial intelligence, robotics and cloud computing,” Mr Penk said.

The Government is scaling up a University of Auckland-led programme aimed at accelerating digital adoption in small and medium-sized manufacturing firms, committing to a three-year funding package to extend its reach across the country’s largest manufacturing regions.

Small Business and Manufacturing Minister Chris Penk announced the expansion of the Digital Manufacturing Light (DML) programme, positioning it as a practical, low-cost pathway for firms seeking to modernise operations without heavy capital investment.

“In an increasingly digital world, overseas competitors are reaping the rewards of greater automation, artificial intelligence, robotics and cloud computing,” Mr Penk said.

“New Zealand manufacturers need these tools and technologies to sharpen their competitive edge, but some are held back by cost or concerns about disrupting their operations, especially where in-house technical expertise is limited.”

Targeting the Heart of NZ Manufacturing

The expanded programme will support at least 180 small and medium-sized manufacturers across Auckland and parts of Waikato, Northland and the Bay of Plenty — regions that collectively account for around 55 per cent of New Zealand’s manufacturers.

Manufacturing remains a critical pillar of the economy, contributing billions annually in export earnings and employing tens of thousands of workers. However, many smaller firms continue to rely on manual processes and legacy systems that limit efficiency, data visibility and scalability.

By focusing on SMEs, the programme aims to close the productivity gap between large, tech-enabled manufacturers and smaller operators that may lack capital or digital expertise.

Low-Cost Tech, High-Impact Results

Unlike large-scale automation projects that require significant infrastructure investment, Digital Manufacturing Light focuses on low-cost, off-the-shelf technologies and open-source software.

The approach allows businesses to integrate digital tools into existing systems without major plant upgrades or complex IT overhauls.

Participating firms receive:

• A tailored digital capability assessment

• Support selecting appropriate tools and systems

• Hands-on installation assistance

• Workforce training to embed new capabilities

The programme emphasises practical implementation on the factory floor, enabling manufacturers to capture real-time data on machine performance, downtime, bottlenecks and product quality.

“Digital Manufacturing Light uses low-cost, off-the-shelf technologies and open-source software to help manufacturers introduce new systems into their existing operations without the need for major capital investment or complex infrastructure,” Mr Penk said.

Building Skills, Not Just Systems

A central feature of the programme is its focus on internal capability building. Rather than outsourcing digital transformation, DML works alongside business owners and in-house technical teams to develop long-term skills.

“A key strength of Digital Manufacturing Light is that it works closely with manufacturers and their own technical staff, building the digital skills into the business that will support sustainable, long-term improvements,” Mr Penk said.

This skills-first approach aims to ensure digital upgrades are maintained, refined and expanded over time — reducing dependency on external consultants and increasing organisational resilience.

Unlocking Productivity and Growth

The Government says the broader economic stakes are substantial.

Research from Xero and the New Zealand Institute of Economic Research indicates that faster digital adoption among small and medium-sized enterprises could lift national GDP by $8.6 billion.

For manufacturers, digitisation can translate into:

• Reduced waste and downtime

• Improved quality control

• Faster production cycles

• Better supply chain visibility

• More accurate forecasting

With global supply chains becoming more data-driven and customers demanding shorter lead times and higher quality assurance, digital capability is increasingly seen as essential rather than optional.

A Strategic Investment in Competitiveness

The expansion aligns with the Government’s wider economic agenda focused on productivity growth, innovation and strengthening regional industry.

“The Government is fixing the basics and building the future for New Zealand. Backing programmes like Digital Manufacturing Light is a smart, targeted investment that helps smaller firms grow, innovate, and contribute to our economy and communities,” Mr Penk said.

By concentrating support in regions with dense manufacturing activity, officials hope to create cluster effects — where digital adoption spreads across supply chains, lifting sector-wide capability.

As global competition intensifies and automation accelerates worldwide, the expanded programme signals a clear policy direction: equipping New Zealand’s manufacturers with practical digital tools to remain competitive, resilient and growth-focused in a rapidly evolving industrial landscape.