Speech to Metro ITPs Annual Symposium

Tuesday, July 5, 2016

Tena katou katoa.

Thanks for the invitation to give the opening address at this symposium. It’s a great pleasure to be here.

Can I acknowledge Chris Gosling, the CE of Weltec. Thanks for the introduction.

I love the theme of the conference today – “Turning Innovation into Opportunity”.

It’s on that very note that I want to begin today – innovation represents a massive opportunity for New Zealand.


The New Zealand tech sector

I think it is just starting to permeate the public consciousness that the New Zealand economy is more than just “dairy and disaster”. Or alternatively, as the Minister of Science and Innovation says, more than just “food and hobbits.”

Last week the “Digital Nation New Zealand: from Tech Sector to Digital Nation” report by the NZ Institute of Economic Research found that the NZ tech sector (ICT plus high tech manufacturing) produces $32b of goods and services, contributes $16.2b to GDP, employs almost 100,000 people, and generates $6.3b of exports.

Last year’s TIN100 and TIN 200 reports were equally compelling about the growth of technology companies. The report found Tin 200 companies collectively grew to $8.952 billion in annual revenue, a $600 million (7.3 per cent) increase over the last year.

The technology sector in New Zealand is a rapidly growing and an important part of an increasingly diversified New Zealand economy.

New Zealanders definitely know about Xero. Many will have heard about Orion Health, Fisher and Paykel Healthcare, and Wynyard Group.

What most kiwis won’t know about is all of the fantastic companies flying a bit below the radar right around the country.

Companies like Fraser Engineering, Pertronic Industries and Sanpro out in the Hutt Valley where I’m from. I see you have Martin Simpson from Frasers speaking later today and that’s sure to be a real treat.

Or CarbonScape in Marlborough.

One of the best things about my job as a MP is being able to see innovative New Zealand companies taking on the world – not just from the big cities but in regional New Zealand as well.

Personally, I’d like to see a bit more media coverage for these companies and the tech sector in general.

We beat ourselves up when our major export commodities like dairy are down a bit in world export markets – markets that we essentially have no ability to influence ourselves due to our small size.

We tend to forget that dairy is only about 7 per cent of the New Zealand economy.


Government support

It would be remiss of me of course not to say that as a government we are extremely proud of the growth of STEM companies and want to see more of it.

The tech sector really matters. The NZIER Report I mentioned earlier found that each four per cent productivity improvement in the tech sector is estimated to deliver an additional $2.7 billion in GDP.

One thing New Zealand’s great tech companies all need is skilled workers.

We’ve adjusted the system to encourage more students into STEM subjects and this is paying off. A greater proportion of degree-level domestic graduates are now completing qualifications in science, technology, engineering and maths.

Many of you know will know about the Engineering to Employment campaign called ‘E2E – Make the World.’ This campaign is about getting more engineering technicians and technologists studying at and graduating from polytechnics and institutes of technology through Diplomas in Engineering and Bachelors degrees in Engineering Technology.

In the field of Information technology, the number of graduates completing a qualification at the bachelors level or higher increased to 1,550 in 2014, an increase of 29 per cent from 2011.

I’m really proud of the ICT Graduate Schools, which were funded through Budget 2014 and are getting underway now. I was at the launch of the Wellington ICT Grad School with Minister Joyce a couple of months ago and it’s hugely exciting. I know the South Island school is going to be located in the Christchurch Innovation Precinct in the new Christchurch CBD which is also pretty cool and will be a good addition to the new revitalised city.

These graduate schools are important because they really connect up industry with the academy. I’ll return to that theme in a moment.

Budget 2016 contained a $761 million investment over four years in a package called “Innovative New Zealand”. The focus of the funding is on growing our science system, producing the 21st century skills New Zealand needs, and encouraging innovation and industry investment in regional New Zealand.

One of the programmes I’ve really championed is the “Unlocking Curious Minds” fund that we’ve established.

This came out of the National Science Challenges panel back in 2012 and 2013. The panel considering the challenges asked the government to consider adding an additional challenge – which was to get New Zealanders talking and thinking about the importance of science in our everyday lives.

The Unlocking Curious Minds fund supports locally led projects to engage young people in science. Out in the Hutt where I’m based its funding is supporting “Hands on Hutt Science” which transforms the classroom into a laboratory with children working as scientists, plus “Sensors in schools’, a project to measure air quality inside schools throughout the Hutt Valley, to name just a couple.

The students involved in these programmes are the students at ITPs in the future.


Role of ITPs

Which brings me the role of ITPs in this story.

ITPs have a hugely important role to play in the growth of the technology sector in New Zealand.

One of the six priorities of the Tertiary Education Strategy is delivering skills for industry. And I know that the Metro ITPs have identified “a highly skilled workforce” as one of their priorities too, which is good to see.

The document explicitly notes that we need more co-operation between industry and TEOs about the types of skills that are most needed, and how best to develop them. Organisations need to create opportunities for industry involvement in planning and delivering education, including re-skilling opportunities for the existing workforce, while industry will need to clearly identify its medium and long term needs, and attract and retain the talent it requires.

I want to stress that point. One of the things that I hear a lot, and I know this is true of my colleagues as well, is that the tertiary system is not connected enough to industry. That the sector doesn’t understand what industry needs. Equally, it is almost certainly true that industry needs to do a better job of engaging with the tertiary system to understand how it works.

That’s why the ICT Graduate Schools are so important.

It’s also why fora like today are important as well. I encourage you during the lunches and coffee breaks to get out and talk to each other – ideally people you haven’t met before. I know from first-hand experience some of the best things about these sort of conferences are the networking over coffee or even a quiet beer!


Technology Valley

In closing I want to talk about Technology Valley.

The idea of Technology Valley is the idea of the Hutt as a hub for companies, institutions and people based around science, technology, manufacturing and engineering.

MBIE estimates are that there are over 4500 people across more than 1,000 Upper and Lower Hutt businesses employed full-time in the high-tech sector. The sector generates $500 million in GDP already and the Hutt Valley has the fourth largest number of people in NZ employed in medium high-tech manufacturing. I’ve already talked about some of the great companies we have in the Hutt and there’s also great institutions like Callaghan, WelTec, institutes from Victoria University of Wellington, the Open Polytechnic, and GNS Science.

I’ve championed the Technology Valley concept and the reason I mention it here is because I think it’s indicative of our government’s approach to regional development.

Regions are focusing on their strengths and that’s exactly the way it should be – that’s where the biggest opportunities lie. If you think of Taranaki you think of dairy and oil and gas. Marlborough, where I was a couple of weeks ago – the wine industry and primary production. And in the Hutt, we’re choosing to focus on technology in its broadest sense.

ITPs have a critical role to play in all our regions – delivering a skilled workforce, working with industry on projects, and driving economic development.

Thanks for the invitation to speak to you today and I hope you enjoy the rest of your conference.