NZ IT workforce plan buffeted by pandemic, but not derailed

Digital ITP progress report shows the COVID-19 pandemic has been a mixed bag, but with overall resilience the result in New Zealand.

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The COVID-19 pandemic is proving a mixed bag for the New Zealand’s IT workforce. On the one hand there is more need for tech expertise as companies grapple with e-commerce and remote working. On the other, large IT projects may have been put on hold until there is more certainty in the economy.

A progress report on the Digital Technologies Industry Transformation Plan (ITP), a partnership between NZTech and the Ministry of Building, Innovation and Employment (MBIE), outlines the IT environment during COVID-19. “Domestically, as customers moved to remote working, IT service providers saw work continue. However, there was a freeze on major projects and forward planning. This has continued with many IT projects still on hold or experiencing substantial delays,” the report notes.

While large corporations and government departments view digital as critical and some new projects are being considered, across the sector there has been “a general hiring freeze, with 15% of firms having to reduce staff during April and May [2020] and an additional 18% expecting to have to make future staff reductions due to COVID-19.”

Overall, New Zealand’s digital technology sector is showing “good resilience”, with some areas, such as fast-growth digital and software-as-a-service exporters, experiencing minimal impact. Their primary concern is around access to capital, although it’s noted later in the report that the $300 million Elevate Fund, which matches public capital with that raised by private investors, is designed to assist with this issue.

In addition, digital companies that may have relied on immigration to fill skills gaps are expected to find it tougher with the borders closed to all but returning New Zealanders.

What is the Digital ITP?

Addressing issues such as skills shortages and capital constraints is the purpose of the Digital ITP, which is part of a series of plans being initiated by the MBIE. It is still in development and has seven workstreams: skills, role of government, investment, artificial intelligence, Māori tech success, and telling the New Zealand tech story.

The progress report outlines several initiatives already underway, including the release of an Algorithm Charter for Aotearoa New Zealand, announced by Minister for Statistics James Shaw in July 2020 and which more than 20 government departments are signed up to.

Perennial issues: procurement and skills

The report examines the role of government procurement, which IDC estimates accounted for 29.6% of all IT spending in New Zealand in 2019. Persistent concerns include the ability for smaller suppliers to participate, the often slow and expensive process and the government being too risk-averse with the need to be “more entrepreneurial and agile when procuring tech solutions.”

Among the initiatives to address this issue are new rules introduced in October 2019, which require government agencies to consider “broader environmental, social, economic or cultural outcomes” when going out to market. It also requires government agencies to consider how they can create opportunities for local businesses through their procurement processes.

The ITP addresses another ongoing pain point: lack of digital skills. Issues here include IT graduates not being industry-ready, a lack of AI skills and embedding the new digital curriculum into schools. The government has created Workforce Development Councils, one of which includes technology, but there is disquiet about them in the sector with IT Professionals CEO Paul Matthews, calling for one of the WDCs to focus on the future of work.

The next steps for these issues is more consultation and research, with a virtual workshop being held in September 2020 to gather views on government procurement, and an update on a digital skills survey taken three years ago that is scheduled for completion by 2021.

Meanwhile, input is sought across the industry on the development of the Digital ITP. During the NZTech annual general meeting, its CEO Graeme Muller encouraged representatives from each of the workstreams to “pitch” the opportunity to join their respective teams.

Copyright © 2020 IDG Communications, Inc.

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