NZ's technological revolution

DAVE BURGESS
Last updated 05:00, May 31 2014
When it comes to Syl Semantics attracting staff, Sean Wilson said he had never had a problem.

When it comes to Syl Semantics attracting staff, Sean Wilson said he had never had a problem.

The technology sector is booming, with annual exports worth more than $7 billion, making it the third-largest export earner behind dairy and tourism.

If current growth in the industry continues then the tech sector would become our top export earner in just six short years.

This comes despite an estimated national shortfall of 10,000 skilled tech workers.

A good question to answer here is just what is the tech industry that all these workers are needed for? It's not easy to get an exact definition but, traditionally, the ICT sector has included software and telecommunications companies, and chip manufacturers for hardware.

New Zealand Technology Industry Association (NZTIA) chief executive Candace Kinser said the sector was a "wonderful, evolving, moving feast".

"Technology as a sector encompasses everything from software, hardware, and telcos, right the way through to robotics and some of the high-end, hi-tech manufacturing."

Technology is the fastest-growing sector in the country but Kinser said the skills shortage was an issue.

Combined advertised IT jobs in any week on Trade Me and Seek come to anywhere between 2000 and 3000. But, if a company was looking for multiple developers, for instance, it would post only one ad, she said.

"Some of the surveys we've done with our membership, and talking to recruitment agencies around the country, we believe it is around 10,000 in the industry right now."

With average salaries between $80,000 and $120,000 per role, the economy in general and the Government's tax take in particular is taking a hit.

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Grow Wellington chief executive Gerard Quinn said Wellington had the highest concentration of web and digital-based companies per capita in New Zealand, with Wellingtonians more than twice as likely to work in ICT.

"Currently there are more than 500 vacancies [Kinser put the number at closer to 5000] in the [region's] ICT sector with a real diversity of employers - from global companies such as Xero or Fujitsu . . . national brands and startups through to IT roles in government or healthcare."

Quinn said the ICT and high and medium hi-tech manufacturing sectors employed just under 17,000 people in Wellington.

When other technology-related sectors such as scientific research and the film/screen sectors are added, it brings the total way above the State Services Commission's recent figure of 19,110 working in the public service.

The agency estimates the number of businesses in Wellington's ICT sector at just over 3300, up from 2300 in 2001.

Grow Wellington isn't sitting on its hands in luring tech talent. A few weeks back, it promoted the capital's hi-tech story at the biggest tech event in the Asia-Pacific region - CeBIT in Sydney.

Earlier in the year, it went on a talent hunt at the South by Southwest (SXSW) trade show in Texas.

The agency is involved with Xero and Wellington IT recruiter 920 Career Agents, which is in the United Kingdom to attract talented people to Wellington.

Kinser, from NZTIA, said Wellington had "traditionally been a really cool place" for IT.

"You've got Trade Me, Fronde, Xero, and some really interesting high-growth IT companies that are based there.

"Auckland does too but it also traditionally has some of the bigger business stuff as well."

However, she said, the country's 10,000 tech-job deficit was huge and while enticing people here through immigration - painting a picture of a beautiful place to work and live - was the quickest and easiest way to fill the gaps, it was not a final solution.

"A long-term solution is to integrate technology as a core component of the [school] curriculum for kids from a young age - you have science, you have maths, you have English, and you have IT. It should be part of growing up."

The span of people required in the industry stretched from traditional engineers and developers to designers and artists, Kinser said.

"If you look at companies like Air New Zealand, Mainfreight, ASB Bank. Whilst these are an airline, a trucking company and a bank, the amount of integrated technologies these organisations use is mind-boggling.

"You wouldn't traditionally think of them as a Microsoft or an IBM in terms of needing technology specialists but they do."

Kinser had special praise for Wellington Mayor Celia Wade-Brown and her impact on the capital's tech sector.

"What is really special is that . . . the mayor has a background in IT. She used to work for IBM. You have that nice integration with a city leader actually having a vested interest and a personal interest in the growth of the sector. She understands it. She gets it and is passionate about it.

"I think that is amazing and I wish some of our other government leaders had that connection."

WELLINGTON search engine and data retrieval tech company Syl Semantics was established six years ago.

Today six government departments use its cutting-edge data search engine, and two use another Syl product which rationalises data.

Syl is well progressed in discussions with the telco, legal and construction sectors to use its products, and is exploring opportunities across the Tasman.

The growth of the company will see its roster of 12 staff expand by up to four, including for the first time a sales representative based in Auckland.

Chief executive Sean Wilson rejects the oft-heard notion that a lack of money in the tech sector is the biggest hurdle to establishing a company.

Syl has had two capital-raising rounds with a combined target of $2 million. They ended up with a total of $3.5m.

Wilson said what Wellington's tech industry really needed was more people with the ability to "productise information technology ideas dreamt up by specialists who might have brains as big as the planet in terms of how things technically work".

"We need people who can turn ideas into something that is shrink-wrapped and you can put into the client's sight - and [the product] works.

"We also need more people who know how to commercialise an idea. It's not just with a local market in mind, it's for a global market."

When it comes to Syl attracting staff, Wilson said he had never had a problem despite the skill shortage. "We have two people a week ringing to say they want to work for us."

A growing trend in Wellington, being led by Syl, is for collaboration between tech companies.

"There are heaps of little companies out there starting to get some traction now. So what we've done is put together a monthly session where people at the right stage come along and, over a beer, we chat about what everybody's challenges are this month.

"It is a side of Wellington that is emerging quite strongly and it's fantastic for the city."

Wilson also said he found the Government "incredibly supportive . . . of innovative tech in Wellington" so long as you had a good product and adhered to the Government's "well-published" ICT road map.

"They really like companies that are going for it, hiring people, and they [government] have the opportunity to gain some lovely offshore dollars."

Kinser said that, over the past decade, New Zealand had established many of the institutions required to nurture the domestic innovation ecosystem such as business incubators, angel and venture fund groups and commercialisation units within universities and government agencies.

But, she said, for all that we were still "a little bit behind the eight ball" when compared with the impact that technology had had on other economies around the world, including Israel.

"If a company is sold out of Israel, the government actually gets a factored-return on the taxpayers' money they put into the company. It has created a massive revenue stream."

While Kiwi tech hotspots tend to be in the big cities, Kinser said there was also growth in areas such as Queenstown, and Tauranga, where startup incubator Wharf42 is putting companies in direct touch with the spiritual home of tech - Silicon Valley.

Give it another six years and maybe, just maybe, Wellington, Auckland or even New Zealand as a whole may be considered the Silicon Valley of the South Pacific.

TECH INDUSTRY

NZ's fastest-growing sector

Exports doubled over six years to more than $7 billion

Third-largest export earner behind dairy and tourism

The highest per-capita earning industry in NZ

ICT contributes nearly $20 billion to our economy

Employs more than 62,000 people

Contributes 5 per cent of GDP

(Source: NZ Technology Industry Association)

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