A Crisis for Graduates and our Future Economy

The situation for new graduates in New Zealand, particularly in the tech sector, is reaching a critical point. According to Ruth McDavitt from Summer of Tech, 80% of New Zealand graduates have little or no confidence in their job prospects​(Growing Great Interns).

Job listings have plummeted this year, while the number of applicants per job has quadrupled. Bernard Hickey highlights how these economic conditions are squeezing the job market further, making it increasingly difficult for young people to break into their chosen careers. In the same post Bernard discsusses how Australia is still experiencing significant job growth, which is drawing many of our graduates across the Tasman including soaking up 50,000 Kiwis who have already left for Australia this year alone, attracted by better opportunities and job security.

Back to the graduate situation.

This lack of opportunity is not just a short-term issue—it poses a serious threat to the future of our workforce. If our tech graduates cannot find jobs, they will either switch industries or leave for Australia, creating a skills gap that will be felt for years. The ripple effects of under-investing in junior talent will have profound and lasting consequences. As Ruth warns, without investment in early talent now, we won’t have the senior specialists we need in the future, and this could impact our ability to grow a sustainable tech sector.

Why the Lack of Investment Now Will Hurt Our Economy in the Future

As I’ve outlined above failing to invest in early-career professionals today will create long-term damage to New Zealand’s economy. The consequences of talent shortages are far-reaching and multifaceted. When young people cannot enter the job market, they are forced to either abandon their chosen career paths or leave the country entirely, resulting in an immediate loss of talent.

Even more troubling is the long-term impact on innovation, competitiveness, and economic growth. Without a steady pipeline of skilled workers, industries stagnate, and the country loses its ability to compete globally.

We’ve seen examples of this in other economies throughout history. Consider the "lost decade" in Japan during the 1990s when economic stagnation and a lack of investment in innovation crippled growth for years. Similarly, in Southern Europe following the 2008 financial crisis, under-investment in younger generations led to a long-term unemployment crisis, especially in countries like Spain, Portugal and Greece. These countries are still struggling to recover from the brain drain and lost productivity caused by the exodus of their skilled workers. While the circumstances in New Zealand differ, the fundamental principle remains the same: when young professionals lack opportunities at home, the long-term effects ripple across sectors and hamper overall economic growth.

We can also speculate on the impact based on current trends. If we continue to lose thousands of skilled Kiwis to overseas markets like Australia, we risk exacerbating the skills shortage already present in industries like technology, healthcare, and engineering. Without a robust and experienced domestic workforce, businesses will continue to be forced to rely on imported talent further disconnecting our economy from local job creation. And remember, we are part of a global market, and countries that continuously invest in their workforce will outpace us. This will make it harder for New Zealand companies to innovate, scale, and remain competitive internationally.

How Do We Support Our Future Workforce

By not nurturing our tech graduates now, we are setting ourselves up for a future where critical roles remain unfilled, innovation slows, and our overall economic potential is diminished. This is not just about the tech industry—it will affect every sector that relies on digital skills, from healthcare to agriculture to education. When we lose our young talent to other countries, we lose the very people who would have driven future growth, and rebuilding that pipeline of talent later is much harder.

It’s clear that businesses are facing tough times right now, with many tightening their budgets and cutting back on new hires. It’s simple - if we don’t invest in our young people, we risk losing an entire generation of tech talent. We are part of a global economy, and if we don’t provide opportunities for our graduates, other countries will. The tech sector, in particular, cannot afford to lose its young professionals. As we’ve seen in other economies, the cost of neglecting early-career talent is immense, and the road to recovery can be long and difficult.

Back to Summer of Tech. With 3000 interns looking for mahi this holiday period and only 100 graduate placements we’ve never seen a more stark illustration of the challenge our graduates face. Less places than during COVID lockdown!

We need to work together to create pathways for young professionals to stay and grow in Aotearoa. Businesses need to consider the long-term benefits of investing in early talent, even in difficult times. By supporting internships, grad programs, and entry-level hires, we can ensure that our industry remains strong and that we have a future workforce capable of meeting the demands of the global market. But it’s hard to justify bringing in new talent when businesses are also struggling.

Our future workforce is at stake, and it’s essential that we act now to provide opportunities for the next generation of tech professionals.