A confidential government project in New Zealand, conducted in partnership with a major US tech firm, ultimately failed to bring about the intended system-wide change. The Ministry of Business, Innovation and Employment (MBIE) initiated the project, known as the lighthouse project, in 2020-21 in response to a request from Internal Affairs to collaborate with Microsoft on special work. The project aimed to promote openness and transparency, but it operated under a secretive memorandum of understanding (MOU) with Microsoft that was only disclosed to the public recently.
This project followed a similar initiative between the Ministry of Education and Microsoft, which also encountered difficulties. The two ministries were inspired to launch these projects after the government’s top digital officer encouraged departments to develop special undertakings with the American tech giant. MBIE was already engaged in the Digital Boost project, which aimed to enhance the digital skills of small businesses in New Zealand. Microsoft, however, expressed interest in larger projects involving data analytics to showcase the value of local data farms.
In response to Microsoft’s aspirations, MBIE proposed a lighthouse project with a broader vision. The project aimed to establish a trust-based mechanism and data-sharing environment that would facilitate government system-wide change and benefit various sectors beyond small businesses. The scope of stakeholders involved would extend beyond government agencies to sector, industry, and NGO participants. However, despite the ambitious goals outlined in the project’s terms of reference, the project did not progress as planned.
The MOU between MBIE and Microsoft, which is still in effect, focuses on Microsoft’s engagement with government agencies regarding the implementation of digital government by 2030. Although the project, referred to as Project B, did not come to fruition, MBIE continued to allocate resources to it. The ministry even hired the consultancy firm Deloitte to run workshops in collaboration with Microsoft and other departments, with the goal of developing a business case for an Enabling Engine. The ministry hoped to secure funding based on this business case.
On the other hand, Project A, which involved voluntary support from Microsoft for the Digital Boost project, continued progressing at no cost to the taxpayer. Microsoft’s involvement in Project A aimed to provide businesses with access to skills content and certifications. Meanwhile, the Ministry of Education pursued its own lighthouse project with Microsoft focusing on artificial intelligence (AI).
Ultimately, neither of the lighthouse projects yielded the anticipated results, and MBIE decided to discontinue Project B in February 2023. Alongside Microsoft, Amazon Web Services (AWS) also has a special memorandum of understanding with the New Zealand government, which was made public this year. Despite the setbacks experienced with the lighthouse projects, Microsoft’s revenues in New Zealand increased by $200 million last year, and it remains a prominent player in government contracts. Both Microsoft and AWS recently secured a significant public health data contract.
In summary, the confidential government project launched in partnership with a US tech firm did not succeed in generating system-wide change as intended. Despite the efforts put into the lighthouse projects, they faced challenges and ultimately failed to achieve the desired outcomes. While Microsoft and the New Zealand government continue their working relationship, the specific projects outlined in the MOU did not come to fruition.