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NZTech Inform – Rebuilding A Resilient Economy
Recently, Xero commissioned the New Zealand Economic Research Institute (NZIER) to undertake a major analysis of the impact of cloud-based technology on the New Zealand economy. The report was completed in February, prior to the outbreak of COVID-19. However, the report found that a 20 percent uptake in cloud-based technology could increase GDP by up to 2.1 percent adding $6.2b to the economy. It also found the technology uptake could increase business output by as much as $7.3b, increase wages by up to $1.9b and grow exports by as much as $618m annually.
It is now clear that the New Zealand economy needs more technology, rather than less, if we are to rebuild a modern, resilient economy. The Productivity Commission has summarised this, saying, well-designed and coordinated Government responses could allow New Zealand to fully realise the potential of disruptive technologies for economic productivity and social prosperity.
There is a unique opportunity right now, as we work together to help rebuild the economy, to ensure our businesses thrive as we rebuild. This opportunity needs to be firmly embedded in policy, to ensure that support for technology-driven productivity is consistently pushed. This drive is required for at least several years, not just in the short term.
Additionally, if we want to enable technology-driven economic growth, we need to ensure our technology companies survive COVID-19. I have quickly reviewed member responses to date, regarding the impact of COVID-19 on their businesses. Like every other organisation, tech firms are suffering, mainly due to the impact on their customers:
- 58% have lost customers or projects.
- 36% have lost access to funding.
- 20% have already had to let staff go.
- 23% expect to have to let staff go within three to six months.
- 44% have been impacted by their reliance on external suppliers or manufacturers.
- 67% have been detrimentally impacted by restrictions to international travel.
Anything the Government can do to support New Zealand businesses should also help the tech sector. Here are a few of the suggestions from our members:
- “Extend the tax subsidy on tech equipment, to include tech solutions and enablement.”
- “Encourage the various government departments to continue tech projects as this will impact many tech businesses (29% of the IT sectors revenues).”
- “Tech will be critical for the recovery – look at incentives for businesses of all sizes to take up more digital solutions to increase productivity and access international sales.”
- “Any policies that supports New Zealand businesses to recover, will support tech firms, as long as those businesses continue to pay their bills.”
Today, we will have a better idea of how long the economic pain will continue, as we unite against COVID-19. I hope you and your organisation are able to weather the storm. Meanwhile, we will continue to work closely with the Government to find a silver lining from this cloud.
Best wishes for a safe and productive week.
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