Remember when New Zealand farming was a sunset industry and tech would rise in its place?
Just about every major US tech company from Amazon, Meta, Snap, Stripe, Coinbase, Twitter, Robinhood and Intel, are having massive layoffs and sharemarket falls of more than 50% in the past year. We are not immune here from that ‘adjustment’.
New Zealand’s own tech giant Xero, though not listed here, has also had a profit crash and a quick change in leadership at the top. Fisher & Paykel Healthcare, our high tech darling of many Kiwisaver portfolios, is valued well down on 2 years ago.
The technology sector is critical to New Zealand’s economy. In 2021 our top 200 tech exporters earned $13.9 billion and total global digital exports grew by 23%.
It is perhaps the export sector that has both welcomed and relied upon government assistance more than any other, and it is paying off. You can see how New Zealand’s Labour government has driven the messaging in ‘We See Tomorrow First’. This has already received the seal of approval from industry names like RocketLabs, Xero and Fisher&Paykel Healthcare.
As should be expected, you can see in that site our tech offering is specifically values-driven as a competitive advantage.
Of course, one of the longest-lasting and most effective tech innovations is this very own site which has led left-leaning digital political discourse here for over a decade.
The impact of the sector can be found in summary facts: we have 23,200 tech companies, employing over 111,000 people making it our second largest employer, and is our second largest export sector and growing fast.
Trade Minister Damien O’Connor –one of our best performing Ministers – has noted the changes in our increasing exports to the United States:
Digital services are a major contributor, with NZ$682 million worth of exports to the US spread across computer services and software license exports. US trade investment has also played a key role in the development of the New Zealand space industry.”
This export sector is particularly important to Auckland, where most of the lead companies are based.
A particular mention must also be made of Wellington-based listed investor Infratil for its huge and profitable investment in datacentres. They more than anyone have shown how to make tech investment profitable by concentrating less on growth and more on cashflow and profit.
All that makes New Zealand vulnerable to a big US tech shakedown.
So the question is this: as the US-based supermajors lay off people including here, will it damage our vital tech industry or push new personnel, investment and opportunity our way?
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