Post COVID: Troubling times for New Zealand’s technology industry, where to from here?

At the beginning of the COVID lockdown government agencies and private companies’ shutdown technology programmes of work in a possible knee jerk reaction, which has caused a drought in the usual pipeline.

TLDR; We have an opportunity to reshape our technology industry locally and globally that cannot be underestimated. What does the new normal look like? The first in a series of articles looking at how our high-tech industry moves into the future.

There is little chance of that pipeline restarting anytime soon with looming elections and ongoing uncertainty around the economy. Even when it does restart, it is likely to take some months before work can be rescoped, re-planned, and resource reengaged to start the pipeline of work flowing again.

For a lot of New Zealand technology companies, this means they are holding their breath, hoping that the pipeline will fire again before wage subsidies and other financial support run out. Already we are seeing a softening of wages and rates, layoffs, and winding back of business investment.

As we are in an election year, we are starting to see some policy around technology being released; however, as per usual, nothing that is particularly material, yet. It is a fact that the government, except for a couple of political parties, does not understand the value of the technology industry nor how to support it.

And it needs support because with the collapse of tourism now, and into the near future, it is likely that the tech industry is now New Zealand’s number two earner in export. It provides a lightweight, low environmental impact, high-value, low cost, export mechanism that government needs to get behind now.

It also requires us, the technology industry, to make some changes and start thinking about how we can change our businesses to survive the current slump and set ourselves up for a different world once COVID eventually comes under control.

Let’s layout the challenges as I see them.

The pipeline of government and private work in New Zealand has been shutoff. This means that the spend before COVID with technology is now basically heartbeat. Even after the lockdown lifting, there is little activity coming through.

The technical deficit is growing by the day for government and companies. Because we have shutdown upgrades, replacements, and programmes of work that would have improved services to New Zealanders across all sectors regardless of government or a private company, as an entire country we risk moving backwards on the productivity scale. Given our productivity was appalling to start with, that is a severe risk.

Restarting the pipeline, using the traditional process, will take months. Months that we do not have. Technology companies will not be able to sustain themselves forever, and the sheer cost or restarting large programmes of work will become a significant barrier.

There is a risk that we “restart” rather than “reset.” In other words, we have effectively switched the industry off by shutting down work. If we try to restart that work, then we have lost a year or more and are missing an opportunity right now to reset. What we need now is a strategy, not the usual type, but a real approach that looks at our agencies and companies asking, “what if we started again from scratch?”

Because generally, we have the luxury of a few more weeks to think about starting from scratch, forming our industry differently, and allowing innovation to spring up in government and other large companies.

The consequences of falling back to our old normal in a post COVID world are well-known. We have a chance to change the way that we export our significant expertise in high technology products, and we need to take that now.

But how?

I want to cover off some ideas over the next few articles, and I am very keen to hear your experience in this area and your thoughts for the opportunities the industry can explore. 

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