Stuff Digital Edition

Tech tensions lead to lost opportunities

Laura Walters

Wellington has long prided itself on its tech sector, but the capital is now staring down the barrel of a techxodus.

If industry leaders don’t do a better job of communicating the key role tech will play in New Zealand’s economic future, the capital will continue to lose opportunities to grow and innovate.

The likes of Weta Digital and Xero put Wellington’s world-class innovation on display. Others have followed in their footsteps, setting up fast-growing companies, like PikPok and A44, which employ hundreds of people, and bring in tens of millions of dollars in a sustainable way.

But the inability to get staff into New Zealand, and the gap in numbers and the level of skills coming through the pipeline domestically, is squeezing the industry.

Sick of treading water, leaders in the tech sector are speaking publicly about the challenges they’re facing, and why they’re being forced to move parts of their business overseas.

Some, like Xero managing director Craig Hudson, and Anna Kominik – the New Zealand head of US aerospace company Wisk – have aired their frustrations on LinkedIn.

And this week, Stuff spoke to more than half a dozen industry leaders, who are feeling hamstrung by the Government’s lack of understanding around the challenges they’re facing.

New Zealand companies, like Weta Digital, Vista Group, Pikpok and A44 are setting up offices overseas. Others are hiring staff offshore.

They know that will have a direct impact on the local economy – both in terms of income tax and lifestyle spending, but also in the longer term.

Without those leaders here, junior staff and students won’t be able to upskill, and New Zealand risks losing its position as a world-leading tech innovation hub.

Tech investor and board member Serge van Dam says this will cast a long shadow.

WellingtonNZ chief executive John Allen describes the industry as ‘‘the most exciting growth opportunity for the city’’.

Allen also knows that without progressively reopening the borders and coming up with a better strategy to nurture domestic talent, the capital is facing a significant lost opportunity.

But these profitable businesses say they’re being suffocated, and looking elsewhere for talent and growth is the only choice they have left.

Perhaps the crux of the problem is that the Government doesn’t fully understand what’s happening at the coalface. Central and local government say the right things, but the rhetoric doesn’t match the reality. Talk about not only the opportunities created by the sector; about the essential nature of digitising services, improving security, and driving economic growth through weightless exports.

Meanwhile, Cabinet is working on a suite of strategies that aim to support growth in the sector, and build a plan around artificial intelligence and cybersecurity. That’s been coupled with a $44 million budget investment.

At the same time, companies can’t get workers in, due to restrictive visa criteria, a lack of a domestic talent pipeline, and the closed borders. This has led to a skills shortage. Currently, the sector is short about 4000 people. While tech creates between 4500 and 5500 jobs a year, fewer than 2000 students are leaving school to take up study in this area. At first glance, the graduate numbers don’t look too bad, but once international students numbers are stripped away, the number of people gaining a tech qualification is declining 3 per cent, year-on-year.

According to a TechNZ survey from July, most applications under the ‘‘other critical worker’’ category were rejected. Further analysis by the industry group shows visas granted under this category sat below the average for other industries: 40 per cent versus 56 per cent.

Van Dam says some of the blame needs to sit on the shoulders of industry leaders.

Rather than being frustrated, they need to do a better job of communicating why tech is so important to New Zealand’s future.

This isn’t about privileged, well-paid, well-educated people whinging because they aren’t getting special treatment. It is about understanding this could be a lost opportunity for New Zealand to become a high-income country, he says.

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2021-09-25T07:00:00.0000000Z

2021-09-25T07:00:00.0000000Z

https://fairfaxmedia.pressreader.com/article/281685437992535

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