Our top 200 tech companies generated exports worth more than $15 billion last year, up 9% from 2021, according to the Tech Investment Network’s latest TIN200 report.
Those 200 companies, which exclude the tech multinationals and telecoms companies but include homegrown tech companies that have passed into foreign ownership, also increased their employment by around 11% to 62,718 – not bad in an extremely tight labour market.
It’s great to see double-digit revenue growth across most regions, with a 26% increase in Otago/Southland and 15% in the central North Island particularly pleasing.
Fingermark, a Havelock North-based maker of touchscreens and automated drive-thru software systems for fast-food restaurants, and Tauranga e-bike maker UBCO, epitomise the innovative startups thriving in the regions. Both companies grew revenue at a rapid pace in the past year.
Source TIN 200 2022 report
Here’s the most important thing – tech roles offer New Zealanders the opportunity to have a great standard of living. The average TIN200 employee wage rose $699 in 2022 to $89,711 – $27,883 higher than the national median of $61,828.
Getting more people into tech-related careers is one of the quickest ways to increase earnings, particularly for young people facing an uphill battle to enter the property market and pay off student debt.
TIN’s head of research, Alex Dickson, estimates tech exports will hit $20.5 billion by 2027 on their current trajectory, but that “attracting, training, and maintaining skilled talent remain an obstacle”.
That’s actually the single biggest obstacle based on my discussions with people across the industry.
IT managers at large companies through to startup founders don’t fret about looming recession in the US or securing enough investment capital to grow.
They’re desperate to find skilled and experienced employees in tech-related roles that can help them accelerate their product development and give them an edge over their competitors.
Remote by necessity
At any one time, we have 3,000 to 4,000 open vacancies for tech roles in NZ, and while the pipeline of skilled migrant workers is starting to flow again, it’s still a slow and involved process.
Many company executives I talk to are employing remote workers all over the world – coders in Colombia, game developers in Canada – and competing in an increasingly global battle for tech talent and paying big dollars to secure the right people.
We’ve been slower than most countries to develop our domestic tech skills pipeline, relying for far too long on migration, then feeling the pain when our extended border closure during the pandemic cut the flow of skilled workers entirely.
Source TIN 200 2022 report
The government and the industry now have a reasonably comprehensive plan in place for skills development as part of the Digital Technologies Industry Transformation Plan. But it isn’t happening fast enough.
We’ll need to scale up skills development initiatives massively to maintain the pace of growth that will put the tech sector on the path to becoming the country’s biggest export industry, which is a worthy goal given the myriad benefits of being a leader in the knowledge economy.
In the meantime, companies are getting creative with graduate programmes and reskilling courses just to get people through the door into support roles.
Multinationals like AWS, Salesforce and Microsoft can certify people to use their technology product sets in as little as 12 weeks.
Tech refugees
But you can’t magic up experience. The real game-changing technologies, such as artificial intelligence, robotics and high-tech engineering, need people with the right tertiary qualifications and years of experimentation and innovation.
Successful software implementation hinges on having skilled architects, project managers and Agile experts who know exactly how to deliver to a high standard and a tight deadline.
Embracing foreigners as part of a remote workforce is the only immediate answer. But what of the tech layoffs in the US, as the excessive hiring of recent years catches up with the likes of Amazon, Meta, Microsoft and Google?
Collectively, more than 100,000 people have been laid off from tech companies in the past year.
“Taking a break till Thanksgiving and then onto interviewing. It’s been a hell of a ride,” wrote one former Twitter employer on Blind, the anonymous social network that has become the outlet for US tech workers’ angst about their employment prospects.
Many of them face tough prospects trying to find new jobs before Christmas, with hiring freezes in place across Silicon Valley.
The most vulnerable are the H-1B specialty occupation visa holders. Nearly 600,000 of them have the right to work in the US in tech-related roles, but that right vanishes if they lose their jobs. They’d have to head home.
Not immune
We won’t be immune if recession comes to the US next year. It will hit demand for our tech exports. But our companies run lean and are strongest in the business-to-business space, which will weather the storm better than the consumer market.
We should be doubling down on recruitment efforts and offering the highest-skilled tech refugees a lifeline here. That goes for those skilled software developers displaced by the chaos of the war in Ukraine.
We face a lot of competition in doing so and while posters on anonymous community app Blind rave about the “WLB” (wellbeing) we enjoy in New Zealand, our high cost of living is a turn-off.
“It’s expensive to live,” wrote one poster, with eBay as their current work affiliation.
“Worked from NZ for a year and moved to Australia. Tech scene isn’t great.”
Actually, our tech scene is great, as the TIN data reveals.
But it’s only as great as its workforce, and on that front, we’ve a lot of work to do to see the sector live up to its real potential.
Originally published on BusinessDesk.
Photo credit: Branko Stancevic, Unsplash
PETER GRIFFIN 