Tech will be NZ’s saviour: Industry
As tourism, retail and hospitality take a hit from Covid-19, the business community says tech and film will be our hope. Andre Chumko and Kelly Dennett report.
New Zealand has a small window of opportunity to become the tech and film capital of the world as the globe looks favourably on our pandemic response but, experts say, we must act now.
With a lauded response to the health crisis, and fewer new Covid-19 cases – yesterday the Ministry of Health confirmed zero new cases and 95 per cent recoveries – New Zealand, already an attractive destination for entrepreneurs, is more desirable than ever, if we don’t fritter away the opportunity.
Industry specialists say while New Zealand’s tourism, retail and hospitality industries will struggle, the tech and film industries could lure a fresh wave of investors and entrepreneurs here.
This is particularly true of the tech sector. While not immune from the economic downturn, the message here is one of adaptability and resilience – that New Zealand has the infrastructure and the capability to maximise its position, both as a place where innovation and entrepreneurs can thrive, and where international talent can look to set up camp.
‘‘Someone super-wise said to me recently that this could be New Zealand’s chance to be a phoenix rising from the ashes, if we use the opportunity right,’’ Auckland entrepreneur Dil Khosa says. ‘‘We got through the health pandemic (and) we have a head start (on) digitising lots of our sectors for efficiency and building new tech-enabled ways to run our domestic industries.’’
During the lockdown Khosa, founder of Athena X Ventures, launched Breaking through the Pandemic, an online platform to help innovators connect and build skills. It’s had more than 80 registrations, from start-ups Khosa is confident will one day ‘‘move the dial for society’’.
‘‘There’s no running away from it . . . Investors are certainly eager to move here, it’s a matter of when they will be allowed to come and invest in our start-ups.’’
Callaghan Innovation chief executive Vic Crone says the pandemic has ‘‘absolutely’’ provided an opportunity ‘‘and we know from previous recessions that technology has played a real role to shape organisations and the economy as they move forward’’.
Its survey of 775 businesses showed nearly 60 per cent thought the pandemic provided the possibility to accelerate their work or seize new opportunities (40 per cent reported cashflow was their biggest barrier).
While the rest of the country has grappled with new working from home scenarios, adapting their businesses to ensure online connectivity, Crone says tech has ‘‘been sitting there waiting for this level of awakening to happen’’.
‘‘The challenge is cash. They need government support. They need investors to stay with them. [And] they need access to talent.’’
Ministry of Business, Innovation and Employment figures show that although Immigration NZ wasn’t able to process new visas, there remained steady interest in, and applications for, its entrepreneur, investor and global impact visas. During the eight-week lockdown it received 25 applications, with most for the investor 2 category visa – experienced business people with a minimum of $3 million in assets or funds. Google registered spikes in people searching for information about immigrating to New Zealand.
Yoseph Ayele, chief executive and cofounder of the Edmund Hillary Fellowship, a programme which aims to attract and unite entrepreneurs, investors and start-up teams in New Zealand, says it received a record near-500 applications between January and April, which included top global entrepreneurs and investors seeking to relocate.
While Covid-19 was ‘‘definitely’’ a contributor, the ongoing interest in New Zealand is not just virus-related, he says. Covid-19 had created an environment where the economy could begin transitioning into a more productive model, which was ‘‘extremely attractive’’ to global entrepreneurs and investors.
New and innovative industries – including tech – would help transition the country to its next chapter, which would also help generate new types of economic activity, he says.
Although jobs had gone in sectors such as tourism and international education, there was an opportunity to re-train people into new industries which could provide more fulfilling lives – one with greater productivity, increased sustainability and a heightened social footprint.
People working in regions, for example, could be earning citylevel income with agribusiness innovation opportunities, Ayele says. Elsewhere, blockchain technologies could be harnessed in the financial tech sector.
‘‘We need to invest in those high-risk, long-term opportunities.’’
International business consultant Phil O’Reilly says New Zealand has a 90-day window to capitalise on the reputation of being Covid-free.
The country already had a big
ABIGAIL DOUGHERTY/STUFF (above) reputation internationally and this had burnished it.
But unless New Zealand opens its borders soon, the opportunity would be squandered.
A ‘‘smart border’’ was the answer; that meant a rapid contact tracing system, and sophisticated health checks, both ahead of departure and on arrival.
Officials have been working on a national contact tracing system and an announcement is understood to be imminent.
But the Government has sounded a note of caution about reopening the borders too soon; even a much-touted transTasman ‘‘bubble’’ could be months, rather than weeks, away.
Max Olson, the 26-year-old founder and chief executive of Whanga¯ rei-based FreightFish, an ocean carrier offering high-speed freight services using ships it designs and builds in-house, says there is ‘‘no question’’ New Zealand’s future is in tech, ‘‘but we have a long way to go before we catch up with Silicon Valley’’.
Olson says both local and overseas investment – largely uncertain at the moment – would be key moving forward. But how New Zealand has dealt with the virus may give some optimism to international investors.
Money was only part of the problem: good governance, mentorship and coaching would be needed. Jobs that Kiwis wanted and were excited to do were needed.
‘‘There’s a lot of great talent coming on to the labour market. Start-ups that [need] labour may be able to take advantage of [the situation] and pick up that workforce that has fallen in these hard times.’’
Director of Taupo¯ -based NuCleer, Gavin Watson, says that although the pandemic has put the business back a few months, there was a lot of interest in start-ups being able to get base products off the ground.
‘‘I think our future is in the IP and the tech brains working things out, and not manufacturing [products] ourselves. We’ve got a good track record as a country being innovators, but it’s too difficult to compete [with manufacturing] on a large scale, particularly in the global market with the high costs of labour and our geographical distance.’’
The focus moving forward should be quickly getting designs to market. ‘‘New Zealand has a pretty good record with innovation, but also a big failure rate getting [product] to market.’’
Atrax Group managing director Kevin Maurice agrees. While Atrax is far from a startup – he’s been in business for more than 30 years – the company’s airport baggage and cargo scales are among the most in demand in the world. He says there are silver linings for New Zealand, but we needed to back ourselves: ‘‘Sometimes it’s easier to sell offshore, and then you gain credibility in New
‘There’s no running away from it . . . Investors are certainly eager to move here, it’s a matter of when they will be allowed to come and invest in our start-ups.’ DIL KHOSA TECH ENTREPRENEUR
Zealand.’’
Business New Zealand chief executive Kirk Hope is optimistic. He believes there’s been renewed interest in New Zealand as a destination for film producers, entrepreneurs, and international students.
This week the New Zealand Film Commission boss, chief executive Annabelle Sheehan, says it is in discussion with ‘‘a lot of different international studios’’ including US film and streaming services.
Weta Digital is working on Avatar sequels, with The Lord of the Rings and several Netflix projects due for release this year, and new projects awarded to the studio post lockdown give it cautious optimism.
‘‘We see this in the increasing number of meetings we’re setting with film producers looking to make their movies across a number of types of formats, including some film-makers who hadn’t previously considered Weta Digital or New Zealand as a potential solution,’’ says executive producer David Conley.
‘‘These conversations have substantially picked up in volume as producers see New Zealand and its supporting infrastructure being one of the few places around the globe able to safely open for production.’’
A boost to the film industry could supercharge others like hospitality, construction and catering, he says, and the inspiration of seeing New Zealand scenes on the big screen could also accelerate visitor numbers down the line.
Border restrictions presented difficulties, which producers were willing to overcome, but there were also challenges in sustaining, growing, and modernising the screen infrastructure with support from local and central government. ‘‘New Zealand has a window of opportunity to build off what will be an increase in content production across the globe. Our industry cannot afford to lose the expertise accrued over the last two decades as a result of economic attrition.’’
Hope says New Zealand’s opportunity for growth is now, and points to the benefit of some tech infrastructure already invested in which has helped us ride out the turbulent time – ultra-fast broadband, for example.
He says it’s critical that to maximise the opportunity, New Zealand’s digital gap is closed, that the border is safely reopened to skilled workers who could be quarantined, and Kiwis’ digital skills are ‘‘turbo boosted’’.
‘‘But I think the point I’d make is that we’re in a better position to weather a crisis than we’ve ever been. A lot of people move to New Zealand because of our lifestyle and given we have managed the public health crises, we can continue to have a pretty good lifestyle – they’re coming from areas where their lifestyle is more complicated.’’
Memia director Ben Reid, in his former capacity at the helm of the Artificial Intelligence forum, was encouraging officials to look to tech long before the pandemic. To the Productivity Commission’s inquiry into the future of work, he submitted that the traditional fear of tech replacing jobs needed to be trumped by the confidence that it would create them.
He says the current climate represents a ‘‘huge opportunity’’ to export weightless services that don’t require people to cross borders. While the tech sector wasn’t immune to a recession – cashflow could be a problem – he saw the times as a potential economic boon.
‘‘We have a healthy and growing tech sector that is able to basically open for business in an overseas market, in New Zealand. We’re now even more attractive to work in because we have a functioning economy, we’re not going to have years of disruption. We can attract talent. People like doing business with Kiwis. We have some of the smartest people in the world.’’
The challenge was harnessing the opportunity and training people for new careers.
‘‘We really need to think very carefully about what our future is going to look like, and it’s not going to be moving product from one end of the country to the other, it’s going to be about creating weightless, intellectual property services, and selling them to overseas markets.’’
‘There’s a lot of great talent coming on to the labour market. Start-ups that [need] labour may be able to take advantage of [the situation] and pick up that workforce that has fallen in these hard times.’ MAX OLSON, ABOVE