Rod Drury: NZTech report a beacon to future growth for IT sector

Rod Drury welcomes the latest NZTech report confirming the growing contribution of the technology sector to the country’s economy, and has two suggestions on how we can “outperform” these figures.

‘Digital Nation New Zealand’ says the sector produced $32.2 billion total output last year and contributed $16.2 billion to the country’s GDP. It also generated $6.3 billion or 9 per cent of the country’s exports in 2015, according to the report that was released last week (see sidebar below on the report highlights).

“We are doing lots of good stuff, the normal incubators and having funding available for all parts of the lifecycle,” observes Drury.

“What we haven’t got is a technology plan, which is unique or something that is specific to New Zealand that allows us as a team to compete [globally] and play to our strengths.”

Linked to this is his belief that the country needs a chief technology officer or chief digital officer - the title could be “either way”, he says - who will pull all of this together.

This CTO could then say, “Here is a technology plan where the private sector and government work together to substantially outperform what we are doing at the moment”.

“We have been harping about this for many years, there seems to be no appetite at all [for an appointment to the role].”

“There is no co-ordination of the industry working together and there are key projects we are not taking advantage of,” says Drury.

On a technology plan for NZ, which oddly there seems no appetite for https://t.co/PI59GOxoSI

— Rod Drury (@roddrury) June 27, 2016

These include the domestic payments network (“We used to be the best in the world.”) to working with global technology firms on R and D projects.

For instance, “How do we play in this transport revolution to electric and autonomous cars? Should we be pitching to Google to use New Zealand as a test lab for autonomous cars?”

After the Volkswagen emission scandal, all big manufacturers are bringing forward billions of dollars of investments on electric and autonomous vehicle technology, he says. New Zealand should be “doing cool stuff” in this area. “How are we getting our share of that?”

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He says there are many senior executives who have served in global posts who would be candidates for this role.

“There are senior people who are winding their career up, have operated on a global level and have those networks,'' to take on a high-profile role like this.

Drury, meanwhile, spoke last week at a panel discussion on trans-Pacific innovation at the the SelectUSA Investment Summit in Washington.

He says one of the themes that came through in President Obama’s speech at the Summit, was that the United States was open for business.

"Nowhere in the world and never in history has there been a better place to grow your business," Obama had stated. "The world is smaller than it used to be because of innovation, because of technology, because of globalisation, because of global markets."

“They were pitching that an international company should have the US as part of their strategy," says Drury.

“It is often business which is more borderless than countries, with MNCs (multinational corporations) working together with teams, and trading all over the world."

Drury says with the internet, together with innovation and research and development happening all over the world, the United States is very important for scaling up.

“It has the most access to capital and as part of building a global business the US is definitely a key part of your strategy, and bringing US people in your team really gets you thinking about scale and doing things large.”

He says the panel also discussed the Internet of Things, and developments in the cloud.

“What is exciting now is that the cloud is moving to AI and machine learning," he says.

"The first generation was getting data into the cloud and now, over the next five years, it’s building cloud-based applications where the servers are doing the work, telling you what you need to do next."

"We are working through our migration to AWS [Amazon Web Service's public cloud], we’re now working on cleaning up and coding that data," he says. "Now it is relatively easy to do the next phase which is adding the artificial intelligence and machine learning to these massive data sets."

"Our focus now is making our software really smarter," he says.

Sidebar: Highlights of the Digital Nation New Zealand

While there is general agreement that technology is important to the New Zealand economy, until now there has been little research to confirm this, states NZTech CEO Graeme Muller on the significance of the report.

Using the OECD definition for ICT and high-tech manufacturing, the report established that in 2015, the tech sector consisted of 28,749 firms employing 5 per cent of the national workforce, or 98,911 people.

A further 20,154 tech workers are employed in other sectors.

On average, those employed by the sector are the highest paid and highest qualified of all sectors.

The tech sector’s productivity has grown at an average of 1.7 per cent per annum for the past 15 years, compared to 0.7 per cent for the national economy over the same period.

But the sector delivers benefits beyond GDP, the report notes.

It points out many ICT services in widespread use are provided for free to consumers, and their benefits are not counted in market transactions.

“For example, Facebook and other apps used for communication, recreation or convenience deliver definite consumer benefits, but are funded entirely by advertisers.

“There are significant benefits from ICT services that are not fully recognised in the GDP numbers. Additionally, GDP doesn’t take into account the social, cultural or environmental impacts of technology."

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