Trent Mankelow says New Zealand companies and organisations hired 352 interns last summer. That’s not many when you consider more than 2000 students applied for positions. Applying takes a fair amount of effort, so there are many disappointed students.
While the business of taking on interns can be open to abuse, it’s an essential part of any programme to match companies and organisations with potential employment candidates.
Mankelow runs Summer of Tech, a programme that aims to find internships for students. It is clear that not enough New Zealand companies are using tech interns.
In his post at the NZ Rise website, Mankelow looks at the reasons employers gave choose to take on interns.
Now there’s a problem right there. When customers choose not to buy something they often offer plausible sounding reasons without revealing the thinking behind their decisions.
It’s stretching credibility to think prospective employers don’t do the same when choosing not to hire interns.
So what they tell Mankelow may not be the real reasons companies choose not to take on young employees for a summer-long test drive.
Not all the reasons are good. What none of them are going to admit is that they are shortsighted, lazy or cheapskate to take part. Some are free riders. They’ll cynically let other companies take the interns they may hope to hire later.
Not a good look
Even if you take the reasons given to Mankelow at face value, they don’t always look good. Take the idea that interns cost too much. According to Mankelow a typical intern costs less than $10,000 in wages. Companies are able to get government grants through Callaghan Innovation for almost that amount if they hire students for research and development projects.
In other words you can get someone with tech skills, even if those skills are still unpolished, at a bargain price. Perhaps $1500 net cost after the grant.
It stretches credibility to suggest a manager can’t get that much value from an intern over a summer. In tech, one good idea well executed can be worth far more than $10,000, let along $1500 or so. Bosses would normally kill for that kind of return on investment.
Which brings us to this year. Sure, the economy is likely to be in a down cycle. But unless circumstances change fast, companies with skilled vacancies to fill are not going to be able to recruit ready-made employees from overseas. This would be a good time to bring in capable young minds to power through any work backlog and line up potential employees for a year or so later.
So, if you are reading this and you run a business, you’ve got about three or four months to come up with a worthwhile summer research and development project.
Eagle technology is helping farmers to use spatial mapping to manage their businesses. Last week I interviewed Eagle Technology GIS product owner Lauren McArtney and Scott Campbell, the company’s head of GIS technology for the NZ Herald.
There’s nothing new about farmers using spatial mapping to manage a farm. They have done it for centuries.
Now farmers make digital maps and, as the Herald feature shows, allows them to get more from their data.
Agricultural GIS seems to be reaching its stride thanks to the arrival of cloud computing, the Internet-of-things, drones and recent technologies.
At the end of September, fibre companies had 880,000 premises connected to their networks. There were 581,000 copper connections. Fibre connections were up 31 percent on the year earlier. Copper connections were down 23 percent.
These numbers come from the Commerce Commission’s Annual Telecommunications Monitoring Report. Last year fibre officially overtook copper as New Zealand’s connection technology.
Telecommunications Commissioner Dr Stephen Gale says; “New Zealanders are increasingly moving to the fibre broadband network. This trend is set to continue with nearly three-quarters of a million homes and businesses yet to switch in areas where fibre is available to be connected”.
There’s a curious section in the media statement about broadband prices. Gale says; “…Prices for a medium use fixed-broadband plan (150GB/30Mbps) and voice bundle have remained at $75 in 2019. As the OECD average price has dropped since last year, New Zealand is now more expensive than the international average.”
Well yes, but the plan in question is a strange one to choose. Few New Zealand customers have 30Mbps plans and the most popular plans have unlimited data. You can buy an uncapped gigabit fibre plan for $85 a month. I’ve no international comparative data to quote, but this is lower than the average price around the world.
Competitive mobile plans
Elsewhere in the report the Commerce Commission notes New Zealand’s mobile plans remain competitive by international standards.
Gale says; “New Zealand’s mobile plan prices are below the OECD average for all plan types we measure. For instance, a medium use plan of 100 calls and 2GB of data costs $28, 24 percent below the international average”.
The Commerce Commission also looks at telco market share. It notes smaller companies are growing their share of fixed broadband at the expense of the big names.
“Increased competition in the market is good for consumers. In the past year we’ve seen encouraging signs with small retailers like MyRepublic and Stuff Fibre growing their market shares. Overall, smaller retailers’ market share grew from 8 percent to 11 percent in 2019, with customers largely being wooed over from Spark and Vodafone.”
Communications services is the top technology category in New Zealand. Customers will spend a total of NZ$4.4 billion this year.The category includes consumer fixed and mobile voice and data services, enterprise fixed and mobile voice and data services. It may be the biggest sector, but shows next to no growth.
Gartner expects software to be the star performer over the next year, with IT services also showing respectable growth. Sales of devices and data centre systems will be flat.
Australians spend more however you cut it
New Zealand’s numbers compare with a total IT spend of A$83 billion in Australia, almost eight times the amount spent here. Australia’s communications services sector is around six times the size of New Zealand’s at A$26.8 billion.
In part the difference between Australia and New Zealand can be put down to population size. Yet there’s more to the numbers than how many people live in each country. New Zealand’s spend amounts to around NZ$2,500 per person, while Australia’s is almost A$3,500.
One possible explaination for some of the difference is that some Australian IT companies wrap New Zealand revenue into local income. And there’s a tendency on the other side of the Tasman to gold-plate projects. Yet you can’t escape from thinking Australians appear more willing to invest in technology.
New Zealand: IT Spending Forecast (Millions of NZ$)
An organisation I co-chair, NZRise, has been looking at the problem. We represent New Zealand owned digital companies who generate jobs and good incomes for tens of thousands of Kiwis. Our research shows Facebook, Google, Amazon and many other global digital companies are engaged in similar tax avoidance schemes to Apple.
Most revenues that accrue to those companies from New Zealand simply don’t get reported. They are the result of an online transaction and the money flies out of the country in the blink of an eye. No tax. No multiplier effect. No 41 per cent investment into our society.
From a business owner’s perspective it also represents a huge disincentive to invest in R&D, which is already at shockingly low levels by international standards. We find ourselves at a disadvantage to our multinational competitors.
Why create software and technical services in New Zealand when we will always be facing uneven tax playing field?
New Zealand has had a problem with multinational companies and transfer pricing for decades.
Yet the problem Christie writes about is on a different scale.
While the old multinational would shuffle money to minimise liabilities in New Zealand, they still paid some tax. They employed people, trained people and contributed to the economy in other ways. They funded university chairs, sports clubs and other worthy causes. If the new breed does any of that, it’s invisible.
The new multinationals pay next to no tax. They employ next to no New Zealanders. They contribute little to the economy.
Sure, you can argue that Apple products make New Zealanders more productive and that’s a positive economic contribution. The net positive economic contribution may even be greater than Apple fails to contribute in more direct ways.
That is an argument against banning or boycotting Apple products. No-one is suggesting that.
It is not an argument against taxing Apple.
After all, our roads carry Apple products to market. Our schools give people the skills people need to use Apple products. Our health system keeps Apple’s customers alive and healthy. In some cases our tax dollars buy Apple products.
You could argue something similar about Google. Some believe Google software makes workers more productive than they would be with other software. Maybe.
Some think that Google’s activities in the advertising sector has an economic benefit. Try saying that to a New Zealand journalist or someone who works in the media.
Again, these are not arguments against taxing Google.
Google is quite happy to sell its products and services to New Zealand government departments that it doesn’t help fund.
It’s harder to argue Facebook offers any economic benefits to New Zealand. If anything it undermines productivity. It is the digital equivalent of an all-sugar diet.
Christie has a good point
There’s little chance Apple, Facebook and Google will stop selling if we force them to pull their economic weight.
Until recently the problem was limited. Most of the non-contributors were technology companies. That’s changing with services like Uber muscling in on our markets. If things continue, the giants will hollow out our economy. Let’s not allow that to happen.
It’s been said that what the companies do is legal. That’s true. It doesn’t make it right. We have the power to change that. We have left this problem in the too hard basket for too long.