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  • rmacculloch

Could NZ ever become a Tech Hub?

National Party leader, Judith Collins, is championing the vision of NZ as a Tech Hub. Could that industry ever become a major part of our economy? Never say never but here are some observations which would appear to make it unlikely.

Remarkably, several of the most influential people in the Tech industry overseas are Kiwis, or are married to Kiwis. One is a founder of "Silicon Fen", the UK's answer to California's Silicon Valley. He is called Hermann Hauser. His wife is a Kiwi and so they know NZ well. Hauser did a PhD in physics at Cambridge University. Just as Silicon Valley is located close to Stanford University, Silicon Fen is located around Cambridge.

More than 1,000 high tech companies set up offices near Cambridge in the five years preceding 1998. Hauser was co-founder of ARM which has just been sold to Nvidia by SoftBank for about $US 40 billion. It's pretty clear that ARM needed its tight association with Cambridge to get going, which is arguably the world's best science university, with pedigree like Isaac Newton and Stephen Hawking, to name but a few. It seems unlikely we could ever build a Kiwi tech cluster around a local equivalent of Cambridge or Stanford, since that would require a radical reform of our tertiary sector. As for our schools, NZ's rankings in terms of the PISA mathematics scores, as reported by the OECD, are on a trend decline. Unless great maths and science teachers are able to be better remunerated to reflect their scarcity, this situation is unlikely change and is opposed by the teacher's union.

Although Hauser takes an interest in NZ, having contributed to a paper about our "post pandemic direction" and has set up scholarships here, he's also quoted in the Financial Times as saying "Europe doesn’t have a start-up problem. We have a scale-up problem". If that's a problem in Europe, it's orders of magnitude greater in NZ.

Furthermore, IT is replacing banking in the UK as the high pay glamour industry. Just as the big incomes of top bankers electrified that industry, now its the IT stars who are being paid like top sports pros. Few such career paths exist here. A Kiwi friend at Google in New York tells me he has no plans to return to NZ. "Why?", I asked. "The pay", he replied.

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