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Almost every job in New Zealand has been impacted by COVID-19. For many, the ultimate impact has been the loss of jobs. Last week, The New Zealand Herald reported that 14,000+ jobs have been lost from large companies. Treasury also reported that the unemployment rate is expected to jump from 4.2 percent to 9.8 percent by September. However, many economists say Treasury forecasts are unrealistically rosy. The real impact is far greater as many small businesses will find themselves caught between reduced hours and still just operating versus closing their business and taking welfare.
According to Stats NZ, at the end of 2019 there were 546,735 businesses in New Zealand, but only 2,670 had more than 100 employees. Those large companies employ 1.1 million people or 48 percent of the workforce. At the other end of the scale, there are 141,978 companies with 1-19 employees that provide jobs for 650,000 Kiwis. There are also 388,323 organisations with no employees, many of which will be sole traders. Approximately half of the workforce is employed in large companies and the other half by small and medium sized enterprises (SMEs). As we all know, SMEs are critical to New Zealand’s economy and for our economic recovery too. This is why it is so important to see both the Government and the opposition increase their focus on SMEs recovery. The new National leader, Todd Muller appointed himself spokesperson for small business and the Minister for Small Business has been “throwing the kitchen sink” to help struggling SMEs.
Last week, I was fortunate to have an opportunity to join a very diverse group providing input to Minister Nash and a team in the Ministry of Business, Innovation and Employment looking at how to help small business uptake more digital technology as part of the COVID-19 recovery. During a presentation to BusinessNZ, it was also encouraging to hear Todd Muller discuss the importance of technology in New Zealand’s recovery and helping small businesses gain more from technology.
Back in 2014, detailed economic research identified as much as $34 billion could be added to New Zealand’s GDP, if the average SME used technology as well as high using firms. However, it has been almost impossible to gain any serious political focus on this opportunity until COVID-19. Suddenly most businesses can see the tangible benefits of using tech, however there are still thousands who still don’t even know what could be. There are thousands of tools and training courses available. For example, during lockdown, our electrician built a new website, created a booking system and began social marketing. His team of eight are now booked solid for months. How many other electricians did this? Or did they find their work gone completely?
From my perspective, the uptake of technology is as critical for New Zealand as driving with seat belts or keeping the country clean. In those instances, the Government invested millions in advertising to help people understand why and how. They did the same for COVID-19 and they could do it for digital uptake…
Have a safe and productive week.
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