Breaking the regulatory ice

Growing New Zealand’s technology sector is a key lever to growing the wealth, wellbeing and prosperity of our country. According to the OECD, average wages in New Zealand are a third less than they are in the United States at present, and about a fifth less than Australia. New Zealand is in the bottom half of the OECD when it comes to average wages.

Unfortunately, increasing wealth in this country isn’t as simple as Wellington decreeing a higher minimum wage. No industry can afford to pay its workers more than what that industry earns on average per worker.

In order to grow our wages, we need to grow the productivity of our workers. This means for every hour worked, more is able to be achieved.

This is where the tech sector comes in.

Technology is the highest-paid sector out of all our major export industries. According to Seek.co.nz, employees in the technology sector earn on average $96,000 per year. This is similar to mining, where employees earn $92,000, and ahead of farming at $70,000 and tourism at $53,000.

It is far easier for New Zealand to increase productivity by growing sectors that are already highly productive already, rather than attempting to increase the productivity of industries that currently have lower incomes.

And the good news is the technology sector has few barriers to growth. The sector does not require land or mineral resources, and does not face environmental limits.

I am not in favour of big government-led programmes as they typically don’t deliver positive results. But I do think there are some simple things the Government can and should be doing to support our tech sector.

The tech sector revolves around good people and strong businesses. In both cases we need to nurture home-grown talent while also attracting the best and brightest from overseas. Prior to the election, I set out some ideas around how we can do this.

Firstly, we need to attract more New Zealanders to study what is known as Stem subjects: Science, Technology, Engineering and Maths. While we will always need a portion of political science and history majors, in modern times we have seen a shift away from core Stem subjects.

The Government can do two things here. Instead of broad projects like Fees Free, we should target a portion of our tertiary spending to provide scholarships for those studying Stem subjects. This should be aimed at attracting students from lower decile schools and populations who aren’t traditionally attracted to the tech sector.

Government tertiary spending can also support the establishment of more tech graduate schools. When New Zealanders complete a bachelor’s degree in a Stem subject we need them to be able to stay at home while they study advanced subjects like robotics or artificial intelligence. Leaving to do postgraduate study abroad may mean our brightest minds never come back.

Secondly, we need to convince more of the world’s top talent and growing companies to come here. We should loosen our investor class visa to provide a smoother pathway into New Zealand for those in the tech sector and create a fast-track technology skills visa to make it easier for our tech companies to recruit the talent they need.

I believe we also need a PHD scholarship scheme to attract the best tech students from around the world.

The final aspect to consider is our regulatory environment and critical infrastructure. New Zealand is well placed to be a “regulatory icebreaker” for new technologies like driverless cars and drones. We are a small, English-speaking, and relatively wealthy country. Trialling new products or technologies here will give tech companies a good understanding of whether or not their technologies will work in larger markets, without the risk that trialling elsewhere may bring. Our parliamentary system allows us to be more nimble and move faster than many other Western democracies.

Establishing a “regulatory icebreaker” unit in government that can temporarily override regulation in a select area can support companies to come to New Zealand. For example, a controlled three-month trial of a new technology could be done in Wellington alone. If the trial is successful, broader regulatory change can then be enacted. The previous National Government invested in our ultra-fast broadband network. Across all areas of the economy, National believes the Government always has a role to provide quality infrastructure to allow people and businesses to thrive. The final piece in supporting our technology sector will be to complete the rollout of ultra-fast broadband and improve rural connectivity to at least 100 mbps.

Judith Collins is the leader of the National Party.

We need to convince more of the world’s top talent and growing companies to come here. We should loosen our investor class visa to provide a smoother pathway into New Zealand for those in the tech sector and create a fast-track technology skills visa to make it easier for our tech companies to recruit the talent they need. Judith Collins