Labour tech pledge gets B+

TOM PULLAR-STRECKER
Last updated 14:07 11/07/2014
KENT BLECHYNDEN
DAVID CUNLIFFE: Plotting a high-tech future.

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Plaudits have begun trickling in for the Labour Party's plan to boost the information technology industry and support new entrepreneurs.

But Economic Development Minister Steven Joyce said Labour was trying to fix problems for which the Government had already found solutions. Other ideas were "off the planet", he said.

Labour is promising "garage grants" of up to $10,000 to support novice entrepreneurs in the sector and would create 1200 information and communications technology (ICT) apprenticeships.

Leader David Cunliffe said many of the world's technology giants such as Apple and Facebook started in "garages and student dorms", but existing government grants to support business were not reaching such ventures. The grants would cost $3.2 million over four years and the apprenticeships $12.6m over three years.

The policies would put the ICT sector at the heart of Labour's economic strategy. The goal was to shift the economy from being "commodity-driven" to a "smart hi-tech one", he said.

Trent Mankelow, who helped set up technology society Unlimited Potential and last month sold his own 30-person technology business, Optimal Experience, to consultancy PwC, said the garage-grant scheme had legs.

The sums that would be on offer were "meaningful", but smart from a taxpayer's point of view, he said.

"Traditionally, what the Government has tended to do is bet on people who are already winners."

Mankelow said he and a business partner originally set up Optimal Experience in 2003 with $10,000 borrowed from their parents.

"With all these schemes, it still remains true that the people who were always going to succeed will succeed, and those destined to fail, will fail.

"The question is whether any of these initiatives helps those things happen faster.

"I wouldn't want to see grants of $50,000 to $100,000 given out 'willy-nilly' because we are seeing a large number of failures in that tech community."

Out of 15 businesses that went through Wellington's Creative HQ technology incubator at the same time as Optimal Experience, only it and software firm Silverstripe were still around, he said.

Paul Matthews, chief executive of the Institute of Information Technology Professionals, said Labour's package had some "very good policies".

Existing business-support schemes were focused primarily on larger companies, he said.

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Telecommunications Users Association director Chris O'Connell gave the package a "B+".

The garage grants were an interesting idea to get "the next Kiwi Steve Jobs" or "Rod Drury 2.0" going, he said.

O'Connell singled out for comment other initiatives that would lead to the creation of a "chief technology officer (CTO)" reporting to the prime minister and to the Cabinet. The CTO would conduct a wide-ranging review of government ICT projects and award "prizes" for technology breakthroughs.

The prizes, to the value of $3m over 10 years, would be interesting if "done right" with private-sector involvement in selecting the criteria, he said.

"The worst thing that could happen is for this to be seen as another science grant system."

Joyce said Labour appeared to be blind to the work the Government had done since Labour lost power in 2008.

"New Zealand is already tech savvy and ... we already have a vibrant and fast-growing ICT sector," Joyce said.

Between the Government's support for technology-focused incubators, accelerator programmes and the regional business partners programme, there was no gap to be filled by the garage grants, he said.

The industry was crying out for the graduates who would be turned out by three new proposed ICT graduate schools, to which the Government last month committed $30m, rather than apprentices.

"The real demand is for graduate-level developers, it is not in the 'trades' at this point in time," Joyce said.

Matthews said there was a need for the graduate schools and the apprenticeship scheme. He also praised a promise by Labour to give greater weight to ICT skills when assessing would-be migrants.

"It has concerned us that if you are coming in under the 'points' system a degree counts a heck of a lot more than experience.

"There was one example recently where a chief information officer of a multimillion-dollar company wanted to come to New Zealand and they absolutely had the skills we needed here, but they couldn't because they didn't have a degree."

Other initiatives Labour announced today include offering ICT manufacturers accelerated depreciation to encourage investment and creating a "government-backed app store" to help New Zealand software developers sell their products.

Labour would "ensure government agencies buy more New Zealand ICT-made products as part of our procurement policy", Cunliffe said.

Joyce labelled a government-funded app store "off the planet".

"Most fledgling developers are able to find their way on to the existing apps stores which happen to be where all the consumers are," he said.

Cunliffe said Labour would have further announcements on policies to improve digital infrastructure and connectivity, saying "the main course" was yet to come.

A lot remained to be done to ensure the country got the most out of the Government's investment in ultrafast broadband, he said.

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