New Zealand's Digital Skills Gap: A Looming Threat to Our Economic Future
The long-awaited Workforce Development Plan for Digital Technologies by Toi Mai lays bare a critical challenge for New Zealand: a widening gap between the skyrocketing demand for skilled tech workers and the shrinking pool of domestic talent. This isn't just an academic issue – it has far-reaching implications for our long-term economic prosperity.
Here are three key takeaways from the report that demand immediate action.
1. Declining Investment, Shrinking Talent Pool
Shrinking Domestic Pipeline, Stifled Innovation:
"Between 2010 and 2023 domestic training in digital technology declined by 33%".
"Government investment and tertiary provision in digital technologies training declined by $22 million (40%) between 2012–2022".
With less investment in domestic training, fewer New Zealanders develop the skills needed for these high-growth, high-paying jobs. This creates a shrinking talent pool, hindering innovation and the development of a homegrown tech industry.
Long-Term Economic Stagnation:
A reliance on short-term training programs, are highlighted in the report
"Many well-meaning government agencies have been trying to help by investing in short-term initiatives and pilot programmes,"
This fails to equip our workforce with the future-proof skills needed to compete in the global tech landscape. This can lead to long-term economic stagnation, as we struggle to adapt to new technologies and opportunities.
2. Over-Reliance on Imported Talent
Increased Vulnerability to Global Disruptions:
"45% of our digital technology workforce (120,000 people) hold a work visa - the majority of these at intermediate and senior levels".
Dependence on a foreign workforce creates a system susceptible to external disruptions.
Changes in global immigration policies, economic downturns in key source countries, or even pandemics can disrupt the flow of talent. This leaves us vulnerable and hinders our ability to adapt and respond to unforeseen challenges.
Stifled Domestic Growth:
The report emphasizes: "[Importing talent]...suppressed demand for local tech talent...education providers do not need to innovate..."
When companies can easily import experienced workers, there's less incentive to invest in training New Zealanders.
This creates a vicious cycle, stifling domestic talent development and hindering the overall growth and innovation potential of our tech sector.
3. The Untapped Potential of a Skilled Domestic Workforce
Missed Economic Opportunities:
New Zealand's tech sector is a powerhouse, worth "$20billion and growing...contributing 8% of GDP in 2022" with high-paying jobs (average $50,000 above national average).
"There's a need to train 60,000 Māori in digital technology post high school" to achieve workforce parity and ensure inclusivity.
By failing to invest in skilling our own people, particularly underrepresented groups like Māori and Pacific Islanders, we're missing out on a massive pool of talent and potential. This limits our ability to fully capitalize on the economic opportunities offered by the booming tech sector.
Building a More Equitable and Sustainable Future:
A skilled domestic workforce fosters a more equitable and sustainable future.
High-paying tech jobs create opportunities for financial security and upward mobility for all New Zealanders, not just those who can access work visas. Investing in domestic talent development ensures a long-term, reliable workforce that can power our tech sector for generations to come.
The report by Toi Mai serves as a stark wake-up call
Without a strategic shift towards investing in domestic tech education and fostering a skilled local workforce, New Zealand risks jeopardizing its future economic prosperity. We must act now to empower our people and unlock the full potential of our digital future.
We hear politicians talking about the importance of digital tech to our economy yet reading reports like this provides evidence that this hasn’t been taken seriously, coordinated and adequately invested in. As Dr Claire Robinson, CEO of Toi Mai has said “there has been no strategic coordination across government”. How do we get governments to take digital technologies as seriously as they have taken a shortage in construction workers in recent years?
