A snapshot of our ICT industry

Originally posted over at NBR


The government’s newly released ICT sector report gives us a great snapshot of the broader ICT (information and communications technology) industry, how it’s doing and how much it’s worth.

It’s really the first time we’ve had such a comprehensive look at the sector and assuming we get an annual update (at least) it’ll be very useful in benchmarking how we’re progressing.

The report focuses on the three main segments of ICT – manufacturing, services and telecommunications itself.

First, the good news. The sector is growing and is now worth 5% of GDP. Wages are running at double the national average (you’ll be pleased to know you can expect $103,563 as your midpoint in 2011) and growing faster than the national average as well – 4.5% growth year on year instead of 3.2%.

If you want to work in ICT you’ll have to live in Auckland. One third of all ICT jobs are based in the City of Sails – not surprising given the country’s population spread, but more than half of all “computer system design jobs” are Auckland based. Interestingly, Christchurch is second with 9.6% of all ICT jobs and Wellington third with 7.3%.

You’ll probably be working for yourself – fully 75% of the industry is self-employed (zero employees) – but that’s no bad thing. It means we as an economy really need to bear in mind the cost of doing business versus the cost of being an employee as an issue.

Best of all, we’re exporting. “Computer and information services” has grown from $288 million worth of exports in 2006 to $531 million in 2012 – a compound annual growth rate of 11%. Imports, by way of contrast, are still increasing but at the lower 8% CAGR.

The day will come in the near future when our exports exceed our imports and we can rightfully take our place as one of the creators in the digital economy instead of a consumer.

Which brings us to the bad news, not that it’s going to be news to anyone in the sector. We simply aren’t turning out enough graduates to fill the roles on offer. Finding new employees with skills is still the most difficult issue raised in the report.

Today, 62,000 workers are employed in ICT roles (as opposed to working for ICT firms), and that’s up 11,000 in the past decade, but half of all ICT firms report difficulty hiring staff.

The figures can be traced back to the education sector and the lack of ICT graduates coming through the system. Although the number of graduates has increased, there were only 1200 graduates in 2011. We might get to 1900 graduates by the end of next year, but even so that’s a drop in the bucket. We could never attract a big-name ICT multinational to set up a development venture in New Zealand with that small a graduate pool.

We need to encourage our kids to consider ICT as a career option. It pays well, you can travel the world, you don’t have to dig up a national park and these skills are highly desirable, yet all too often we see good quality candidates going into accounting, law and management – three areas that have trouble placing graduates because of the oversupply of talent. The skills aren’t dissimilar – maths, logic, a flair for process – and the chances of being gainfully employed are a lot higher.

It’s great to see the government looking in this much detail at our sector. I’d hope to see more of this kind of data come through in the years ahead so we can track our progress, but that’s really only the start of it all. We shouldn’t just be tracking, we should be driving this sector forward and that means a concerted effort from both sides of the fence – industry and government alike – to make it easier for ICT to bloom.