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Will New Zealand’s technology sector continue to support job growth?

Friday, October 07, 2016

Technology is a crucial part of the New Zealand economy, contributing approximately $16.2 billion a year to gross domestic product (GDP), according to new research.

NZTech's 2016 Annual Report indicated that this dollar figure represents approximately 8 per cent of GDP. Meanwhile, ICT exhibited the largest growth in terms of GDP contributions of any other OECD country between 2001 and 2013.

As technology becomes more important to the country's economy, the New Zealand government is keen to boost innovation in an effort to support jobs and further growth.

In this year's Budget, Economic Development Minister Steven Joyce unveiled $761.4 million worth of funding through the Innovate New Zealand package. The money will go towards 25 initiatives over the next four years aimed at boosting science innovation, including tech-based opportunities.

"We have seen over 200,000 jobs created in the last three years, record numbers of highly-skilled graduates, and major growth in new and emerging hi-tech sectors like the software services sector," Mr Joyce said in May.

"New Zealand's employment rate is already the third highest in the OECD, but we have to keep developing the skills of our young people to meet the future needs of New Zealand."

So what is the current state of New Zealand's technology sector? And will jobseekers in the industry continue to see growth in opportunities?

NZ's tech sector at a glance

Earlier this month, Statistics New Zealand revealed that employment growth in the country accelerated in the second quarter of this year. The number of people with jobs increased 2.4 per cent compared with the previous three-month period and the unemployment rate dropped from 5.2 to 5.1 per cent.

The agency admitted that changes to the way it collects survey data could have affected the results. Nevertheless, it claimed there were other economic indicators that suggested New Zealand is currently enjoying a period of employment growth.

More people were employed in the second quarter of this year, according to Statistics New Zealand.

This could spell good news for technology workers, with NZTech's annual report noting that nearly 99,000 people are employed in the sector. This is about 5 per cent of the workforce, and there are an additional 20,154 tech staff working in other industries.

According to NZTech, technology has the highest paid and most qualified workers of all other sectors, on average, and every 4 per cent improvement in the industry's productivity adds an extra $2.7 billion to GDP. Moreover, each new job created in technology helps add a further five services jobs around it.

New Zealand currently has nearly 29,000 tech firms, which produce approximately $6.3 billion worth of goods and services for overseas countries. This is roughly 9 per cent of all the nation's exports, making it the third-largest export market in the country.

Championing gender diversity in tech

Clearly, New Zealand's tech sector is going from strength to strength, and businesses within the sector can expect a bright future. However, one area where NZTech believes more focus is required is gender diversity.

Women currently only comprise 23 per cent of all professionals working in IT jobs, for example, while females make up just 28 per cent of roles in the wider tech sector.

Diane Knowles, chair of NZTech's Women Board, said technology is a "dynamic and exciting" industry that is experiencing a rapid pace of growth, but companies must do more to improve diversity.

"Our talent pool is limited due to the relative size of our country and it is hugely important that we encourage full participation in the sector to continue to thrive," she explained.

"I am a strong believer that increasing diversity in the tech sector will have positive flow-on effects to the overall effectiveness of New Zealand tech companies and to our economy as a whole."

Later this month, NZTech will host the Shadow Tech Day in Auckland, which invites hundreds of schoolgirls to learn more about a technology industry career. Each participant will be paired with a woman working in the sector in order to give the youngsters hands-on experience.

A number of high-profile businesses are involved in the initiative, including Microsoft, HP, Vodafone, IBM and Air New Zealand.

"Before Shadow Tech Days only about 30 per cent of girls say they were interested in a job in tech. After the Shadow Tech Day experience, 80 per cent of schoolgirls go back to school and sign up for tech subjects," said NZTech Chief Executive Graeme Muller.

Building for the future

The New Zealand technology sector already makes significant contributions to the country's economy, providing tens of thousands of people with jobs both inside and outside the industry.

With the government looking to invest further in developing skills and opportunities, as well as a wider push for greater diversity, the sector's ongoing growth seems likely to continue.

Ultimately, as technology becomes an increasingly essential part of everyday life, New Zealand – and candidates with the right skills and experience – can expect to benefit from the industry's good fortunes.

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