ITP Techblog

What a difference a month makes. We hit the beach, saw much of the North Island weather two epic and immensely damaging bouts of wild weather, and saw the abrupt resignation of a star politician.

Many have written about the track record of Jacinda Ardern and there’s a common thread to the analysis - the PM rose to the occasion handling the pandemic and crises such as the Christchurch mosque shootings and the Whakaari / White Island eruption. She won the respect of leaders the world over but also had to deal with some vile abuse at home.

She ultimately wasn’t able to implement her transformative agenda on child poverty, housing, inequality and climate change, but what she did could in time come to be regarded as important foundational work. Maybe the pandemic was just too disruptive. Maybe the country wasn’t and still isn’t ready for the sweeping changes Ardern had in mind.

But the PM, nevertheless, leaves a track record to be proud of, and as ITP CEO Victoria MacLennan advised on RNZ last week, I also hope Ardern doesn’t just jump into a big new role but takes some time to really recharge and decide what she wants to do next after five years of exhausting work.

Frayed relations

Much has been made of Chris Hipkins’ decision to make one of his first meetings as PM, a korero with Auckland business leaders.

“This should not be read as an abandonment of Labour’s core constituencies, more an acknowledgement that without repairing this frayed relationship, there might be no plausible path to power,” The Spinoff’s Duncan Greive observed.

The relationship with business is certainly frayed, thanks in no small part to the scars business owners still bear from the lockdowns and impact of shutting the border for two years. Hipkins has rightly gauged the level of frustration and vowed to listen to the concerns of business, which are deepening as the economy softens.

The biggest concern, greater even than weakening consumer demand as interest rate hikes and inflating bite into purchasing power, is finding workers. This is an acute problem in everything from hospitality to horticulture. A shortage of wait staff, fruit pickers, construction workers and nurses is crimping our economy and Labour needs to do more to address the problem.

But if Hipkins, who knows the education sector well, wants to see more Kiwis employed in high-earning, high-skilled jobs, he also needs to ramp up his government’s efforts on the digital skills front. Whenever Ardern or Hipkins have been asked about boosting the domestic skills pipeline, they immediately reference various government-supported apprenticeship schemes that have been expanded.

That’s all well and good, but overlooked is the need to radically boost IT-related training. While we have a digital skills strategy in place, there isn’t enough coordination and resourcing to fast-track progress. It means that we are going to continue to be reliant on immigration to fill many of the 4,000 - 5,000 positions the industry will need to fill over the coming years.

Skills focus paying off - for other countries

All over the Asia Pacific region, other countries have made big investments in tech-related training. It’s part of the reason why we lag behind the likes of Vietnam, Singapore and Taiwan, in measures such as Coursera’s Global Skills Report.

"Countries like Singapore, Indonesia, and Japan that have invested heavily in their human capital lead the region in skills proficiency. Skill development will become increasingly important as skills, rather than jobs,
become the new career currency," the 2022 report notes. New Zealand dropped 13 places last year in the Coursera index.

Source: Coursera Global Skills Report 2022

“In recent years, Australia and New Zealand have fallen behind the rest of the Asia Pacific region when it comes to business agility, tech skills, and communications infrastructure,” the 2021 report also noted.

Other countries are doing more to train and upskill their citizens in digital-related areas through widely available free education, on-the-job training and heavily promoted micro-credential schemes. Employers are incentivised to help employees adopt tech skills. The pay-off is that these countries are becoming go-to destinations for tech-related development.

Shopkeepers, fruit pickers and nurses get the headlines here at the moment. But if Hipkins is smart, he will keep the bigger prize in mind - equipping Kiwis with the skills to earn more in highly mobile knowledge economy jobs.

After all, as economist Shamubeel Eaqub pointed out this week, we can’t just keep relying on immigration to meet our skills shortfalls.

"We kind of use it as a political tool to deal with whatever we want to at the time," he told RNZ.

"Currently it happens to be that it's labour shortages, 10 years ago it was because we wanted population growth and economic growth, and I think it's really unfair to ... use immigrants as these little political chess pieces.”

Weightless economy

That’s Hipkins’ challenge - to galvanise businesses to join the government in investing in the future workforce, one that will power a larger, weightless economy that generates more export revenue and pays $100,000+ salaries to employees.

Unfortunately, Hipkins' cabinet reshuffle this week again relegates the digital economy and communications portfolio to a relatively junior minister in Hutt South MP Ginny Andersen. 

As the New Zealand Herald's tech editor Chris Keall wrote this week, IT used to be a portfolio for power players in both parties, including Paul Swain, David Cunliffe, Amy Adams and Steven Joyce. 

"But recently, it’s been a place where you’re parked when your career is on the slide (Kris Faafoi) or you’ve been disgraced and demoted (David Clark), advised by a lame-duck Digital Council. In opposition, it’s something to occupy your time after being rolled as leader (Judith Collins)," he writes.

I made it clear repeatedly last year that I believe Labour has largely ignored the potential of the tech sector to help it realise its broader societal goals. It’s even been disappointing on digital divide issues that, in theory, are close to its heart. Other countries, like Australia, are on the front foot targeting emerging technologies, investing heavily in cybersecurity and holding Big Tech to account. Our approach, as Keall points out, appears to be that having built out "both parties’ leadership is that it’s a 'job done' portfolio. if that's the case, how wrong they are.

So while Hipkins has some work to do to get business onboard, he also needs a specific focus on the tech talent and skills that are increasingly at the heart of economic growth in every country that aspires to be competitive in the digital economy. This and the other issues facing the digital economy should definitely be on the agenda come election time.