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New Zealand’s Productivity Commission plays down the threat to jobs from technology.

Instead, it says we need more technology to power higher productivity growth. It says this, in turn, will lead to higher income growth and the money need to pay for the things we value.

The Productivity Commission’s draft report New Zealand, technology and productivity says the available data indicates widespread jobs market disruption won’t happen any time soon.

Productivity outlook uncertain

The commission points out the future of work is not certain. It says: “There will undoubtedly be change over the next 10 to 15 years, but not at unprecedented levels”.

In other words, that’s the foreseeable future.

The Productivity Commission’s press release hints at one of the great mysteries of modern times: We’ve been using computers in business for more than 50 years. Yet the dial doesn’t seem to move much on productivity. It certainly hasn’t moved as much as the marketing and hype from technology companies suggests.

In the inquiry director Judy Kavanagh’s words: “If the rate of technological change was accelerating, you’d expect to see evidence in the official statistics, such as faster productivity growth, more business start-ups and more jobs being created and destroyed.

“But what we see in New Zealand and across the developed world is the opposite.”

Positive effects

The commission is right when it says technology mainly has a positive effect on jobs and work.

Think of, say, dishwashers. These machines let people spend less time with their hands in a sink full of plates and greasy water.

Someone has to make, distribute and sell then install dishwashers. They generally require regular servicing. These jobs are all better quality, better-paid jobs than minimum wage dishwashing.

And, let’s face it, a lot of that dishwashing was unpaid domestic work.

There’s also an industry supplying dishwasher detergent and rinsing agents.

Instead of spending time dishwashing, people can cook more elaborate meals. They can spend their time on other more productive tasks. Instead of domestic drudgery, people could get jobs.

If you look only at dishwashing, the sum of created jobs might be negative. Yet by displacing a menial task, other more productive opportunities open up.

This, in a nutshell, is why technology can displace jobs, but it can also often create as many or even more than it destroys.

We do a poor job

Back at the Productivity Commission Kavanagh says: “Technological change may pick up in the future but even so, it will take time to diffuse and affect work in New Zealand. We do a poor job of picking up technology quickly.”

You don’t need to look far to understand the truth of this statement.

Anyone who has been following the fuss about people adapting to watching the 2019 Rugby World Cup on streaming digital services instead of satellite TV can see this is on the money.

About half the population is ready to stream, close to half the population is pulling their hair out in frustration coming to terms with what is, in reality, a very simple switch from one medium to another.

Education is critical here. So is experience.

Rugby World Cup, productivity

Anyone who has spent the last decade or two using questionable services to download music and videos and then moved on to Netflix would find streaming Rugby World Cup games to be trivial.

Yet for people who have never seen BitTorrent, Chromecast or Apple TV, it can be a challenge.

There’s a clear link between the challenges Spark faces with domestic entertainment technology adoption and people at the sharp end of our economic extracting value from business technology.

Watching how this plays out with the Rugby World Cup could give us some clues about how to better leverage computers, broadband and other tools that can improve productivity.

In ‘Climate of fear and anxiety’: Some 200 Vodafone staff offered voluntary redundancy, says union Chris Keall, New Zealand Herald writes:

Insiders have told the Herald there is a broad expectation that around 400 of 2800 roles could go.

Paris stressed in an earlier interview that there was no set number. Different departments would gain or lose staff depending on the outcome of the ongoing review.

And he while he has acknowledged the possibility that call centre jobs could be offshored, Paris also said no decision would be made that would hurt customer service.

As part of an international company, Vodafone NZ was able to tap into its parent’s “Centres of Excellence” in other territories.

Paris says Vodafone NZ fell short of targets last year. His brief is to get the subsidiary into shape this year for an IPO in early 2020.

As the story says Jason Paris’ job is to tidy up Vodafone New Zealand’s business so it is an attractive IPO. That way the parent company gets the maximum return on its investment.

Looking at cutting employee numbers is part of that. Compared with other similar sized technology companies1, Vodafone’s revenue per employee is low.

Taking costs out of a business can make it more attractive in the short term.

If Vodafone gets rid of 400 people out of a total of 2800, that’s almost 15 percent of the total. Potential investors will like that.

We shouldn’t forget job cuts are often devastating to the people involved. They are often also uncomfortable, even stressful for many of the staff who remain. It can hurt morale. If there are long term effects, they will probably show up after the IPO.

Outsourced call centres

One risk here is that Vodafone New Zealand has suffered from poor customer service in the past. It has used overseas outsourced call centres that customers hated. A return to those days would damage the company.

Last year Consumer criticised the company after a satisfaction survey.

Vodafone was the only provider that rated below-average on all our performance measures – from customer support to value for money,” Consumer NZ chief executive Sue Chetwin said.

About three-quarters of Vodafone’s broadband customers reported spending a long time on the phone waiting to speak to a rep. Nearly half said the service was poor once they finally got through.

The company that performed best in Consumer’s survey was Spark’s Skinny subsidiary. Ironically Skinny doesn’t promise much in the way of customer service. Maybe that’s the secret success formula. Either way, if I was Jason Paris, I’d be taking a closer look at what makes Skinny tick.


  1. Vodafone has often talked of itself as a technology company. ↩︎

Clare Curran, Labour communications spokesperson
Communications Minister Clare Curran moved fast to establish the CTO position.

Politicians are rarely good with technology. Nothing illustrates this better than the 2011 parliamentary debate over the Copyright (Infringing File Sharing) Amendment Act.

A lot of nonsense was spoken at the time. The NBR described the debate as loopy. That was kind. It was obvious the MPs had no idea what they were talking about.

The otherwise obscure New Plymouth MP Jonathan Young took the madness to a higher level. He made headlines speaking in an empty parliament chamber saying:

“…The computer system called Skynet that ruled the world. It’s like the internet today.”

Most of us had no idea what Skynet is. Yet we all knew Young was out of touch with the real world when he spoke.

Young had his 15 minutes of fame as he was mocked for failing to understand the internet.

Politicians don’t get IT

To be fair to Young, he isn’t the only politician who doesn’t understand technology. Few do. Many say embarrassing things. Some say foolish or harmful things.

Wiser heads know to say nothing or very little. It’s better to keep your mouth shut and have people think you may be ignorant than to open it and confirm their fears.

It seems the higher you get in the pecking order, the less a politician knows. Technology know-how has never been a path to high office. It may be an obstacle.

At best politicians mouth empty platitudes about technology. They often acknowledge it is often a good thing without saying anything specific. It’s like motherhood and apple pie.

Praise be

You will hear our politicians sing the praises of entrepreneurs. While they are positive about technology investment, that’s because they are in favour of any investment.

And they know technology investment sounds good to voters.

Our politicians might, if pushed, be able to talk about the importance of teaching children about science and technology. Yet, for the most part, that’s about as far as things go.

Not only do politicians not understand specifics about science and technology, they often fail to grasp the importance of underlying ideas and concepts.

Ask them about, say, the value of scientific peer review, the nature of scientific enquiry or the difference between proprietary or open source software and most of the time you’ll get blank looks.

Advice for policymakers

So it makes sense to have someone who can move in their circles to advise policymakers. Hat’s off to Communications Minister Clare Curran for moving fast to establish the role. It may have been in the manifesto for both parties by the time of the election, but Curran pushed this for a while and has wasted no time making it happen.

Curran says the chief technology officer will be accountable to the prime minister and to herself. She says the person will provide independent expert advice to ministers and senior leaders on digital issues.

She says:

“The chief technology officer will be responsible for preparing and overseeing a national digital architecture, or roadmap, for the next five to ten years”.

The job has to go to someone capable of speaking to the cabinet and committee members in a language they can understand without being condescending.

New Zealand already has many public servants and others operating at the highest levels who can advise policymakers on these matters. They often do. Much of the time their advice is first class.

Yet advisors tend to operate in silos, often with a narrow sectorial focus. At times their advice can conflict with their peers operating in other fields.

Some of the key advice going to politicians comes from well-funded lobby groups, not independent experts.

The science advisers who go into bat for the agriculture sector might have a different view of, say, wheat or sugar to those advisers working in public health.

Technology advice in the eye of the beholder

Similar reasoning applies to technology. Take public cloud computing. An advisor focused on productivity and reducing cost might be all for government storing sensitive data overseas on an Amazon server. An advisor looking after personal security and privacy might offer an entirely different opinion.

Depending on where you sit, the idea of, say, data sovereignty might be a useful way to keep people safe or it could be a brake on innovation. Someone needs to unpick these issues for our leaders.

There are big strategic decisions where different government departments and competing interests want to pull in different directions. Take the question of how government should engage with organisations like Google or Facebook? You’ll get diametric views depending on who you talk to.

Big picture view

A chief technology officer may not be the best person to make day-to-day decisions on such matters, but they can set the ground rules and explain the issues to policymakers.

Someone needs to tell ministers it can be a bad idea in general, say, for their departments to communicate with citizens by Facebook.

This kind of decision should not be left to gut-feel reckons. Too many important decisions of this nature are being made by people who don’t necessarily grasp all the basics.

Think back once more to 2011 and the Copyright Amendment Act. At the time paid online services for copyrighted material were emerging as alternatives to piracy. It was clear then that these emerging services at least had the potential to neuter the threat of piracy.

Either no-one told our leaders, or, more likely, no-one who they would listen to was prepared to tell them. Having someone in the Beehive who could talk through the issues would be a good start.

Likewise, someone needs to talk to our leaders about the implications of increased automation, artificial intelligence and so on for employment. Then there’s blockchain and the internet of things or the government investment in fixed-line broadband potentially being undermined by wireless network operators. We could go on listing important technology areas that may need legislative attention.

Chief technology officer no panacea

Having a chief technology officer is not a panacea. It is no good if someone claims the crown, then does little with it. The person chosen needs to be active. At the same time, we really don’t need someone who comes to the role with a predetermined agenda. It’s not a job for someone who is partisan.

And that’s a big danger. Even the fairest-minded expert can be open to capture by special interest groups. Big technology companies are already able to throw millions of dollars into wooing, cajoling and persuading politicians, putting one person in charge of the category could make their task so much easier.

We don’t want a chief technology officer who kow-tows to global technology giants. Yet at the same time, we do not want one who is openly and unreasonably hostile towards them or some of them. We need a sceptic, not a cynic.

If there is an over-arching objective for a national chief technology officer, it would be to insert more science, engineering or technical thinking into government. There is precious little.

Few politicians or senior public servants have any science education beyond school and many dropped the subject long before leaving high school. While there’s nothing wrong with not having a technology background, there is clearly too little knowledge among our present leaders. It might help if the better funded political parties also hired technology advisors to help them frame policy.

Communications skills

The other danger is that the appointee is brilliant with a full grasp of the complexities, but is unable to articulate key ideas in a simple enough fashion for ordinary mortals to understand. Remember, our political leaders have, a best a below average grasp of technology, even if they are brilliant lawyers or business leaders.

The chief technology officer will also need to be able to talk in the language that ordinary citizens can understand. At least part of their job will be to explain to the rest of us what is going on with policy. It’s a big job. It needs a special person.

Overseas tech skillsOverseas readers wanted to know how New Zealand is filling its tech industry vacancies. Here is my story published earlier this year in London-based Computer Weekly. 

Wellington is as far as you can fly from Heathrow before you start coming back. New Zealand’s capital is almost 19,000km and at least 24 hours away. The city is small by European standards, with only 200,000 people calling it home.

And yet Wellington is a regional technology hub. It is the nation’s biggest technology user and the government is based there. Wellington is also home to Weta Workshop, established by director Peter Jackson to create computer graphics for The Lord of the Rings movies. It is where New Zealand technology entrepreneur Rod Drury began Xero, the small business accounting software-as-a-service market leader. Dozens of small tech startups inhabit buildings all over the small South Pacific city.

Read more in New Zealand calls for tech specialists at Computer Weekly

Massey University Albany Auckland

Tomorrow night I’m chairing an interactive panel discussion on the skills challenge facing New Zealand technology companies. It’s part of Massey University’s ecentre cloud series.  The session starts at 5:30 at the Sir Neil Waters Building, Massey University Albany.

Innovative companies depend on talented knowledge workers. They are in short supply everywhere, New Zealand is no different from other western nations. Yet with our innovators going through a golden age, the problem is particularly acute now.

This certainly is a golden age for New Zealand innovators. A whole raft of entrepreneurial companies are taking leading edge technology products and services to the world. We’ve always had innovators, but Xero’s global success has inspired others to shoot for bigger goals. Vend, the Wynyard Group, E-Road and PowerbyProxi are some of the best known.

For every high-profile innovator that you’ve read about in the business pages there are dozens of smaller companies queueing up behind.

It’s exciting times.  For the first time in history we are creating a new wave of exactly the kind of high growth technology companies our economy needs to lift us from relying on producing commodities. Exciting times, but also worrying times because fewer students are signing up for courses in the subjects that feed these industries:  science, technology, engineering and maths. It’s not just at the university level, school students are turning their backs on these subjects.

We can shake our heads, complain and make loud noises about this problem — that’s an understandable response. But the centre cloud discussion panel is going to look for answers. The plan is for people to come away from the session with a better idea of the shape of the problem and some positive ideas about how to fix it.