$10 billion and counting
The growing GDP contribution of NZ’s young, gifted and bankable Kiwi-Indian population
Anew report has revealed the Kiwi-Indian community’s contribution to New Zealand’s economy peaked at $10 billion in 2019. The report, titled Economic Contribution of NZ Indians in New Zealand — $10 Billion and Rising, was commissioned by a West Aucklandbased Waitakere Indian Association and authored by economist Shamubeel Eaqub of Sense Partners.
The report confirms some of the anecdotal assumptions within the Kiwi-Indian community, about the community’s growing significance in size and contribution to New Zealand’s economic, social and cultural life.
Notably, Indians are a growing part of New Zealand’s diverse population, making up 5 per cent of the population, with the most recent Census (2018) showing the number of people identifying as of Indian origin (including those from India, Fiji and other countries around the world) was 221,916 — behind only the KiwiChinese population 231,387.
While the population of the community has grown from 1.7 per cent in 2001 to the current 5 per cent in 2020, the same period witnessed an increase in contribution to the NZ economy from 0.9 per cent to current 3.3 per cent of annual GDP.
Among other significant outcomes of this first descriptive scientifically vetted report evaluating the community’s economic contribution was the fact that 72 per cent of the Kiwi Indian population (of working age) are in work compared to 65 per cent on average.
Indians in New Zealand are more likely to be highly skilled (and higher post-school qualifications) with 56 per cent holding post-school qualifications, 1.6 times the national average. This should not be a surprise given the fact that the World Economic Forum considers India as a powerhouse of the world’s most highly educated migrants for the rest of the world. According to OECD Data cited by the World Economic Forum more than 3 million highly educated migrants in the OECD originated from India (3.12m) ahead of China (2.25m) and the Philippines (1.89m). Additional to the $10b contribution to national GDP coming from the around 240,000 of Indian origin in the population, there is an additional $825 million in economic activity attributed to temporary visitors of Indian origin in the country.
There were 15,300 international students and 68,000 tourists visiting the country from India before Covid-related border closure, bringing in an estimated revenue of $645m and $180m respectively.
The population distribution by age of Indians in New Zealand demonstrated that they constituted a younger population with a high proportion in the 20-40 age group and with more of their children at a younger age (under 4 yrs) — making them an easily employable and willing to be relocated workforce.
The large family size and ageing population are often considered a hindrance to work-related mobility between different regions.
The report also highlights that by 2018 Kiwi-Indians were faring far better than any other ethnic group in terms of unemployment rate by ethnicity, only behind Pakeha and below the national average.
In terms of employability in specific sectors, there was evidence of higher rates of employment of those of Indian ethnicity in sectors such as retail (14 per cent), health (11 per cent), accommodation (11 per cent) and professional services (11 per cent), compared with the likes of construction (4 per cent) or the primary sector (3 per cent). However, the report notes that this trend was changing on both sides of the scales with a gradual decline in numbers of Indians in retail and a gradual increase in the numbers of Indians working in new areas like construction.
This trend reflects the broader socio-economic and demographic changes in the community, beginning with older-generation migrants who were more likely to be less educated and who had experienced more barriers to get into workforce, more commonly working in retail sector roles such as in dairies and grocery stores. Over the years, with the beginning of skills-based immigration and an increasing number of highly educated immigrants, accompanied with the growing size of the successive NZ-born generation who were more confident in Kiwi work culture — and with an overall reduction in social barriers to entry into the workforce — more Indians have entered higher-skilled work. However, despite some fascinating figures on many scales, the report also surprises many including those who commissioned and authored the report.
Kiwi-Indians, despite being amongst the most highly skilled and youngest migrant community, and most likely to be in paid
work were still more likely to be paid less than the average national income. The average income of Kiwi-Indian workers is $50,000 per annum compared to the national average of $55,000.
Another surprising outcome was the low entrepreneurship base of New Zealand’s Kiwi-Indian community.
This contrasts with the Indian diaspora’s globally acclaimed entrepreneurship in other Western countries including the United States, the United Kingdom and Canada. Indian immigrants have the highest average net business income of all immigrant groups in the United States.
In New Zealand, the prevalence of Indian entrepreneurship has trended lower over time, from 18 per cent in 2001 to 10 per cent with an increasing proportion in paid employment instead.
There might be multiple factors in play, including a general declining trend in entrepreneurship across the economy. In fact, the Indian share of all entrepreneurs has been trending higher, from less than 3 per cent in 2001 to 6.6 per cent in 2018.
Acknowledging the wide range of revelation from the report Sunil Kaushal, President of Waitakere Indian Association, said, “We ourselves were surprised at what the report revealed. This has huge sociopolitical ramifications.”
Shamubeel Eaqub, the author of the report, said, “Indians represent a significant economic resource and contributor. They are being underutilised. The more we can do to tap into the potential of the young and well-qualified Indians in New Zealand, the more they and New Zealand will benefit.”
Indians represent a significant economic resource and contributor. They are being underutilised. Shamubeel Eaqub, report author