Fortress New Zealand: NZ Tech Industry in a post-COVID world

In my last article, I looked at the challenges that the New Zealand Tech Industry currently faces and asked how we could reshape ourselves to take advantage of many opportunities to strengthen and grow a sector that is very important for the country as other significant revenue streams, such as tourism, collapse for the foreseeable future.

TLDR; New Zealand could be the data and computing Switzerland of the south, minus COVID. We should consider investing less in traditional infrastructure such as roads, and far more in technology infrastructure such as data centres. We should make it easier for global technology companies to move all or part of their companies to be based in New Zealand, spreading them geographically across the country.

More than 250,000 Americans have investigated whether they qualify to move to New Zealand since the coronavirus pandemic took hold this year.

Hundreds of thousands of foreigners from other countries are also inquiring about living here or applying for residency as the deadly pandemic sweeps the globe.

With international death rates steadily climbing, our Pacific island nation is quickly becoming an attractive haven to live.

Covid 19 coronavirus: Americans visit Immigration NZ website every 30 seconds, tens of thousands consider shift to virus-free NZ

New Zealand is currently one of a handful of countries on earth that is seen as safe from COVID along with places like Israel and Singapore, both also with robust technology industries. Most other countries that were considered safe even a month ago, such as Australia and Switzerland, have now had significant issues with COVID.

Arguably, New Zealand could be the safest place on earth right now given our border policy (it is shut but there are pathways through) and our geographic location which has no land borders and is not easily accessible by sea. Japan is possibly also as safe.

We also have good internet infrastructure locally, and connecting to the rest of the world, which has functional capacity & redundancy. While latency starts to grow as we head toward the northern hemisphere, for Australia and South East Asia, it is more than adequate.

We are part of the Five Eyes network, which while it may preclude some countries from ever wanting to store data here or utilise computing resources, is attractive to the other Five Eyes partners. We also have ever-strengthening privacy laws, with more investment in the legislation coming before the end of the year.

Even though we are part of the Five Eyes network, we are relatively independent of the partners, putting our foot down when we have a point of principle and having trade relations with a variety of countries.

New Zealand itself is a highly desirable place to immigrate to given our landscape, culture, socially responsible policies, and cost of living in comparison to other cities around the globe.

There are two aspects to Fortress New Zealand I see as opportunities.

The first is to pour money into good infrastructure in the form of geographically diverse data centres along with other technology platforms, and the second is to move tech companies to New Zealand as their base of operations.

Data Fortress

New Zealand already has several data centres scattered across the country of which the majority are serving local customers. Microsoft is investing in a new data centre, which may also cause other global players to consider the same.

Globally, because of New Zealand’s relative independence, and physical separation, the storing of data and provision of essential services makes us an attractive proposition for governments and companies that want a safe place to protect information assets.

On top of that, we have relatively cheap power that is, for the most part, green sourced. If Tiwai Point does close then that power is likely to become more affordable and in excess, further increasing attractiveness of our location.

The government is currently pouring billions of dollars into traditional infrastructure with parties that are campaigning in the general election promising the same. However, this conventional approach tends to focus more on roads and transport than high-value technology infrastructure with a view to the export market.

“Shovel Ready” projects have been the promise; however, the value of traditional infrastructure and the money that is distributed as a result (minimum wage workers on the end of a shovel) is low in comparison to technology “infrastructure”, which could be powered by newly trained workers, our current technology industry, and all for a far higher economic value.

You can’t export a road.

It is certainly worth investigating the value of investing in technology infrastructure as New Zealand faces ongoing pressure from the loss of tourism and the disruption of traditional food supply chains.

A great place to live, work, and play

COVID is likely too remain a problem globally for some years. I expect our border restrictions will be in place for at least another year, if not longer, depending on various models. This means that large parts of the world will continue to live in lockdown, and this will continue to affect technology companies.

Consider many of the data processing centres that were outsourced and offshored a decade ago remain closed or under capacity due to restrictions. Those workloads could quickly be rehomed to New Zealand where no such restrictions apply.

Also, we should be considering the fast-tracking of companies that want to rehome to New Zealand bringing their business and some or all their staff with them. We could buddy them with local technology workers and companies so they can learn the unique ropes of New Zealand.

Companies could choose the geographic region that they want to move into so distributing the economic gain across the country rather than concentrating it in a single metropolitan area. We’ve already seen this happening inside New Zealand.

Here’s an example before lockdown, it’s one of many.

When Straker Translations opened an office in Gisborne last year, it did so at the request of staff.

Rather than a second, more central Auckland office, employees suggested a regional office that could provide both a family friendly lifestyle and affordable housing.

Straker offers its Gisborne staff lifestyle benefits

If it can happen inside New Zealand, then it can happen internationally. It just takes will on the government’s part to cut through red tape and allow companies to move part or all of their operations to the country. Right now that red tape focusses on skilled migrant categories or wealth. By opening to allow businesses to move, rapidly, we could increase the technology industry significantly.

I realise there will be criticism for these ideas, which is a very kiwi response, and I have deliberately kept them deceptively simple. However, we have an opportunity now to market New Zealand as the Switzerland of the South (minus COVID) and as a great place to move technology companies. Those companies will boost local economies, potentially bring innovation to New Zealand itself, and increase the export market significantly.

We also rise to challenges very well, and while some of these ideas may seem impossible, we’ve carried out far greater feats as an industry so I have no doubt we could find a way to make these ideas work.

Next, I am going to talk about what the central government could do to help the industry, mainly as we are in a general election year and so far, the policy has been entirely underwhelming. This close to the election that is disappointing, but not unusual, because our political parties “don’t get” technology and they need too, fast.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s