Griffin on Tech: Kiwi tech's global footprint, Tokelau's domain name misery
The annual TIN200 report out today reveals that even in a tough economic environment, our tech sector managed growth of 11.7% in the 2023 financial year.
That brings revenue generated by our top 200 tech companies to $17.1 billion, with exports growing 13.1% to $13.05 billion. To put that in perspective, our daily exports were worth $21 billion last year, so at the current rate of growth, tech is on track to becoming our biggest export earner by the end of the decade.
The Tech Investment Network has been criticised for using too broad a definition for what a tech company in New Zealand is.
"There isn’t a tech sector," tech entrepreneur and investor Rowan Simpson wrote on Linkedin this morning.
"Every company is a tech company, including Spark and Infratil and many others. There’s no such thing as a NZ company - Rocket Lab isn’t one. Nor is Xero or Trade Me. These companies have owners and employees and customers all over the world. Counting those two things makes no sense and teaches us almost nothing about where we need to go."
"TIN is a participation trophy disguised as a sector lobby group," he added.
A slightly harsh summary. TIN has maintained the same methodology for a number of years now, so the detailed look at the established and emerging tech-related businesses in the space gives us some useful insights about what’s happening and where we are going in our quest to “move up the value chain”.
The key takeaway this year is that growth in tech workers has slowed dramatically from 8.5% in 2022, to 3.1% in 2023. That reflects more conservative hiring policies in a high-inflation setting, and the layoffs that have taken place during the year.
Those 200 companies actually decreased their New Zealand employees collectively by 193 to 32,729. The growth in numbers came overseas, where they added 2,127 staff to total 31,145. That’s a remarkable statistic that shows the level of maturity of our tech sector where many companies have moved beyond beachhead operations in overseas markets to become established players with significant staff numbers.
Through the year I’ve heard less angst from tech company leaders about tech skills shortages locally - they’ve instead recruited internationally and are increasingly running teams that are spread around the world. But as a nation we nevertheless need to double down on efforts to build the domestic tech skills pipeline as without it we’ll struggle to build the next wave of innovative export-worthy tech.
There’s a compelling reason to focus on the task - TIN shows that the average salary in tech rose 8.5% to $99,740 during the year. It’s a high-skilled, high-paying sector and that isn’t going to change.
When the new government finds it feet, it will need to get to work quickly with its tech visa changes to attract more talent here, particularly in areas like AI and data analytics which are in hot demand now. Having a tech minister in cabinet, and likely in the form of senior MP Judith Collins is a prime opportunity to put tech issues on the political agenda in a way it hasn’t been for years.
Pacific nation a magnet for scammers
MIT Technology Review has done a fascinating deep dive into how Tokelau’s .tk domain name became the go-to platform for cybercriminals. The island nation, consisting of three coral atolls and with a population of around 1,400, is a protectorate of New Zealand.
But when the internet revolution really kicked off in earnest in the late 1990s, Tokelau was left to its own devices figuring out what to do with the .tk top level domain (TLDcc) it had been assigned by Internet Corporation for Assigned Names and Numbers, or ICANN.
I don’t know if InternetNZ, responsible for maintaining the .nz domain back then through its subsidiary Domainz, ever offered to help Tokelau set up the infrastructure needed to run .tk domains. Maybe New Zealand wanted to avoid engaging in digital colonialism.
But a helping hand was definitely in order, because Tokelau went and did a deal with an enterprising Dutch businessman, which seemed like a good idea at the time, but has irreparably tainted the .tk domain.
“In the succeeding years, tiny Tokelau became an unlikely internet giant—but not in the way it may have hoped,” explains MIT Technology Review’s Jacob Judah.
“Until recently, its .tk domain had more users than any other country’s: a staggering 25 million. But there has been and still is only one website actually from Tokelau that is registered with the domain: the page for Teletok. Nearly all the others that have used .tk have been spammers, phishers, and cybercriminals.”
The Tokelau Government’s website and email addresses now sit on a .org.nz domain. With a referendum set to be held to decide Tokelau’s future and whether it opts to become an independent territory, the state of .tk is symbolic of the challenges the island nation faces in attempting to stand on its own two feet.
As Judah points out: “Repairing Tokelau’s devastated international reputation by cleaning up .tk will be a necessity if the atolls are to make any serious bid for sovereignty.”