Griffin on Tech: Hollowing out of the high-tech workforce continues

Another week, another round of redundancies that threatens to hollow out the country’s science and tech workforce.

Callaghan Innovation this week told 63 staff at its Gracefield campus in Lower Hutt that they were being made redundant as the government agency prepares to wind up operations. As the disestablishment phase plays out, many more jobs will go over the coming months.

Many in the sector acknowledge that Callaghan Innovation wasn’t working after 12 years of attempting to stimulate the innovation ecosystem and boost R&D spending. 

“Despite good intentions, the agency became bogged down in administering grants and subsidies rather than driving real innovation,” serial tech entrepreneur and early Trade Me employee wrote in The Spinoff last month.

“Under pressure to demonstrate value, it spread its resources thinly across a huge range of activities – from managing R&D tax credits to funding startup accelerator programmes. But there was never any clear evidence that any of these initiatives actually helped create more successful companies.”

A reset was needed, but the way the Government has gone about it will see top talent, and there was plenty of it at Callaghan Innovation, left with nowhere to go. That’s because the agency will be disestablished before the new public research organisation (PRO) which will focus on artificial intelligence, quantum technologies, and synthetic biology, is set up. 

There are good candidates at Callaghan Innovation who can take up roles at the new advanced technology PRO, but it could be six months or more before recruitment begins. I know many are looking overseas for opportunities as they wait for the redundancy process to run its course. 

The health IT exodus

The Public Service Association is taking a keen interest in Callaghan’s wind-up as it pursues legal action against Health NZ to try and halt plans to cut 1100 roles in the organisation’s data and digital directorate.

A focus on frontline health services is understandable, but part of the answer to providing more effective public health services is better use of digital platforms and technologies like AI. There’s been little coherent guidance from Health NZ as to how it will pursue important tech-related projects as it waves goodbye to some of its most experienced digital experts.

All this happens as the Government ramps up its growth agenda, a key plank of which involves attracting more talent to New Zealand by way of offering digital nomad visas and an easier pathway to residency for investors willing to sink money into the country.

That’s all fine, mirroring efforts of other countries to attract highly mobile, talented people to their shores. But in doing so, we seem to be neglecting our own talent pipeline assuming that following the redundancy carnage, the market will simply reabsorb all of those highly skilled workers.

Given the state of the economy, that’s optimistic at best and the timing and lack of strategic planning involved will undoubtedly see capability lost.

Prime Minister Chris Luxon recently visited Singapore and South Korea and came home inspired by the innovation-fueled economic development those countries have enjoyed. Next month he will convene an investor summit aimed at attracting foreign investment to New Zealand.

You need to spend to grow

But as Newsroom reported this week, those countries significantly outspend New Zealand on research and development. Budget cuts have crimped our ability to fund basic research and it's unclear as to whether foreign investment can help us close the gap.

“Though the Government’s new profit-driven research system was ‘similar’ to these overseas examples, the message from the science community was clear: without an increase in inputs, don’t expect an increase in outputs,” Newsroom reported.

“Over the last two decades, the percentage of New Zealand’s GDP invested in the research sector has risen 0.3 percent. It remains below Singapore and Denmark, as well as Estonia: another small country with a focus on tech development.”

Without investment in the areas the government has identified as offering significant potential value, AI and gene editing among them, we’ll struggle to build the talent base to support R&D efforts. It’s looking like a case of ever-decreasing circles at the moment as many in our high-tech workforce are shown the door.