How Wellington leaders can grow the tech industry

There is no doubt that the Wellington region has turned out some of the hottest ICT companies in the past few years, despite the recession and central Government’s crusade against the local economy through wide spread devastation of the public service.

Only a third of the ICT exports come out of Auckland, the rest is left to rest of the country and mainland. We are currently, as a country, exporting over five hundred million per year and rising.

We have distinct advantages over the other two major cities in the race to attracting high-tech business that we need a campaign to reinforce.

We are compact. Even with the awful traffic you are only really ever thirty to forty-five minutes (the Coast) from Wellington CBD. Once you are inside the CBD you can walk across town in less than fifteen minutes, the bulk of your local customers are extremely accessible.

Compare that with the wide and sprawling layout of Christchurch and Auckland and you can see the advantages.

Government, despite rumors to the otherwise, is still in Wellington and a good source of income for companies. There are some problems with Government’s attitude to the smaller, New Zealand, ICT and high-tech business, which we will get too later.

Wellington is creative. It is apparent when visiting other centres that we have a distinct advantage. Because of its compact nature, people are forced together and this creates a lot of idea swapping and collaborative thought, during the day the cafes hum and at night the interaction continues, Tuesday night at Hashigo Zake seems to be a regular ICT architect’s night out.

Lambton Quay is the longest meeting room in the country, what should take five minutes from one end of the street to the other, can take three times as long as you run into people from all walks of the local ICT industry.

We’ve got Xero, TradeMe, Sidhe, Weta, Snapper, Stqry, and a host of other local, custom-built, Wellington style, ICT success stories and when you examine them they are all quite unique, quite creative, and quite open about how they did it.

Wellington is uniquely positioned to grow the local ICT, and other high-tech industries, with a coordinated plan led by the local Council. However, in order to do that, there are some problems that need to be overcome.

The effort needs to be led and the current structure isn’t working.

The Mayor of Wellington, Celia Wade-Brown, holds the local government portfolio for “Information and communications technology” and aside from the rhetoric and speeches we have come to expect, there has been no action in this area in her term. If we expect the local Council to lead this, we are going to need to do a lot better than an empty hat holding a portfolio that has no energy being injected into it.

It seems natural that the Council should lead efforts to increase the profile of the local industry and support efforts to promote Wellington as a hub of excellence with broad business support to encourage companies to start up, or move here. However, the Council is a dinosaur of an organisation in its processes and management and this would be rather like asking a hitherto undiscovered South American tribe to build satellites.

While the ICT industry has lobby groups nationally that could assist in the development of the local industry, in my opinion they show a bias toward Auckland.

“If you want to work in ICT you’ll have to live in Auckland.” – Paul Brislen, Telecommunications Users Association of New Zealand 

That means that they can’t be trusted, after all this is a competitive market, to represent Wellington’s industry.

Fresh thinking needs to be had in order to overcome this problem.

A Wellington ICT industry group should be established to work with the various facets of Council in order to progress the idea of an ICT hub within the city.

Council should be put in the place of a funding source with oversight, little control, while the responsibility of the practical mechanics should go to the group proper. We should ask the various local companies that have been successful in ICT to sit on that “board” if you will, gaining their collective knowledge for practical planning.

Central Government has a role to play here as well. It has long been known that it is nearly impossible for small ICT companies to engage and win contracts with central Government, or local Government for that matter.

This is traditional dinosaur thinking that says “an overseas multi-national is safer than a local New Zealand provider.” It may also be to do with the fact that the entire lunchtime industry would collapse at the Beehive end of the city if contracts went to local firms instead of the “drink them into submission” megacorp.

A recent example of this is the Inland Revenue’s contract award of over a billion dollars to a megacorp to run a large software project. For those of us in the industry, that is an astounding amount of money for a tax system. Why did central Government not look locally for help? Xero, a multi-billion dollar, Cloud based, Wellington located, international company that builds accounting software is literally three blocks away.

Central Government is hell-bent on saving money and has established the dreaded “panel system” all over Government. This is where companies bid for a card rate, say an hourly rate for a developer, and then a handful are put onto the panel, all others are locked out.

Here’s the issue. For me to respond too and get on a panel as a small business, depending on the requirements, it will cost between twenty-five and fifty thousand dollars. I can’t afford that.

Government, central or local, must give better access to the small to medium enterprise, in the United Kingdom, this has been achieved through a “G-Cloud” model, that is simple, effective, and producing great benefit for local ICT companies and so the economy. That model should be adopted here, and was recommended to be, via the Department of Conservation Government Cloud Programme, but it appears to have died in a ditch somewhere.

The Community Cloud can underpin the startup and small ICT business in Wellington. Having an extremely low cost, highly scalable, secure, and reliable ICT service platform is critical for burgeoning industry. As I’ve noted before, this is a very small investment in terms of money versus a very large result in terms of output.

We need to lobby for better ICT Infrastructure. It’s not good enough at the moment. A city wide high-quality, free wireless network is a minimum requirement. Again, this is not a high overhead in terms of cost compared to the return on investment. We should also consider the likes of Citylink provisioning very high speed bandwidth to physical hubs within the city where people can work in a collaborative, ad-hoc way. I.e. creating space where ICT business can be born.

We, the ICT industry, need to vote for candidates who are ICT savvy. If we don’t, we’ll get the dinosaurs telling us “whipper snappers” how to “do” ICT.

Wellington as an ICT Innovation Hub is entirely possible. It requires the ICT industry to establish a local Wellington ICT Council and start planning.

Ian Apperley is an independent cloud computing consultant. He posts at whatisitwellington.com

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10 Comments & Questions

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You've quoted TUANZ, which is a one-person lobby for telecommunications users, not the ICT industry.

While it is true that NZICT is Auckland-centric, try NZRise, which is Wellington-centric and has put in quite a bit of effort with both central govt and WCC to address several of the issues you've highlighted. The Institute of IT Professionals have people nationwide and while not a lobby for companies like the others, have a fair amount of clout in Wellington.

The answer isn't to create yet another group and splinter our industry representation even further (plus spent a huge amount of time and effort on establishing a group rather than dealing with the issues). It's to work with these organisations to focus them on what matters - they're already funded, already have the relationships and from my experience, almost always keen to listen.

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I agree. Splintering what we do have is not a good idea.

It is about time that someone stood up for Wellington on a much more active basis.

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How about Wellington stand up for Wellington rather than getting someone else to? The crazy guy Shadbolt down the line seems to at least raise the profile a bit - the Wellington mayor is quiet, to say the least...
Of course, the major restriction is staff, and with Auckland five times as large you are bound, by default, to have more options for staff in larger centres.

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I would agree that NZRise is our best hope ... but, as a Christchurch-based member, I'd like to ensure that we avoid being regionally biased. Despite being more spread out than Wellington these days (who knows how long that will last, given recent seismic events near Wgtn?), Chch has more than a little IT brilliance going on.

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The government hasn't contracted anyone to build a billion-dollar tax system - that's false. They've announced an intention to transform the systems that run the tax system and stated it could cost that much. They have contracted a mega-corp to do some initial work on it.

There are big question marks over this, but let's try to at least report it accurately.

And sorry but comparing Xero, a good but fairly inflexible accounting programme for SMEs, with a system to manage the country's entire tax system and surrounding infrastructure for government is laughable.

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This is not reporting, it's opinion.

The stated intention is to spend that amount of money on a software solution, which, in the lens of international projects, is extreme.

Xero is an example of a company that could help. It's an example. The point is that we, New Zealanders, can help.

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What a very Wellington way of thinking.

"We must get the government to give us work".

Clue (no charge): Stop waiting for the government to give you stuff. Get off your butts and get out there marketing your product instead. If it's any good, people may even buy it.

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Ah hah, and that's the rub - it's snouts in the government trough or nothing as there is no other business in Wellington to speak of.

When the PM said Wellington was dying, I think most people missed the point he was making - which was that other centres are getting busier and growing and Wellington is standing still, which is as good as going backwards.

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Rod Drury does have a good point, though. Wellington is an excellent place for a Software House as the weather means people don't mind staying inside and the public transport system means it is a lot easier to commute than Auckland.

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It is nice to see Wellington doing something successfully and being recognised for it.

One only need look at the wreckage of northern England to see what effect a single large city with unchecked growth can do. Sadly, this is precisely what is happening in New Zealand. Spread the love around and keep growth happening in all the regions. Strength through diversity.

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