New Zealand’s new coalition government, led by Prime Minister Christopher Luxon, has indicated it will stop work on the Industry Transformation Plans (ITP), including the Digital Technologies ITP.

This decision, part of the Government’s 100-day action plan, marks a significant shift from the previous administration’s approach to transforming sectors of the economy by implementing the Government’s industry policies.

The Digital Technologies ITP, launched in late 2019 and updated through public engagement in February 2022, was created to increase the economic contribution of the digital technology sector. The key focus areas were growing export success, particularly in Software-as-a-Service (SaaS) and game development, developing skills and talent, promoting IT capabilities globally, and strengthening Māori inclusion and enterprise.

The demise of the ITP for Digital Technologies raises concerns about the viability of numerous significant initiatives, including:

• KiwiSaaS, a network of Software as a Service (SaaS) companies and individuals working together to establish SaaS as New Zealand’s highest-yielding economic sector, funded by the ITP and managed by NZ Trade and Enterprise. KiwiSaaS offers a community-based approach, connecting and supporting businesses in the SaaS sector. It provides networking opportunities, resources, and events to foster growth and collaboration.
• Enhancing Māori Inclusion and Enterprises was enabled through initiatives supported by the Enabling Māori Fund (EMF). The EMF, which arose from the COVID-19 Response and Recovery Fund, aims to increase Māori participation in the digital technology sector. Despite their achievements, data highlights the sector’s underrepresentation of Māori, making up only 4 per cent of the technology workforce. The plan covers many Māori involvement opportunities, from employment and business ownership to investment in new technology, increasing the sector’s diversity and inclusivity.
• The Digital Skills and Talent Plan, vital for industry growth, was the approach to bridging the digital skills gap. This initiative provides funding to expand ‘learn while you earn’ programmes and other integrated work-learning models. It also aimed to facilitate the transition of industry workforce practices and the adoption of the Skills Framework for the Information Age.

This Skills and Talent Plan was also supported by a $26.6 million investment in the 2023 budget to address digital skills gaps and raise women’s participation in the technology sector to 50 per cent by 2030.

The decision by the Government to discontinue the ITP could have far-reaching effects.

However, New Zealand’s technology sector is a shining example of economic resiliency and vigorous growth. The annual report of the Technology Investment Network (TIN) recognises a sector that has exhibited extraordinary adaptability and economic potential, rising much faster than the overall economy. The sector’s vitality and resilience are apparent, with total sales in 2022 of $15.11 billion, a 9 per cent increase over the previous year, and an underlying profit of approximately $2.5 billion.

The global reach of the technology business is also notable, with international markets accounting for 76 per cent of sales, totalling $11.5 billion in exports and ranking second only to the dairy sector in New Zealand. This global presence highlights the sector’s creativity and competitiveness.

Despite global economic uncertainty, a wide range of sub-sectors, including financial and health technology, creative solutions, gaming, and communication software, have all seen double-digit growth, demonstrating the sector’s diversity and growth potential. With an established track record of resilience and significant economic benefits, New Zealand’s tech sector presents a hopeful outlook.

The future of initiatives funded under the ITP remains uncertain. While the Government’s policy move brings new obstacles, New Zealand’s IT sector’s strength and dynamism offer promising opportunities. To continue the ITP efforts to achieve transformative growth and productivity, the industry, stakeholders, and Government must come together to adapt to these changes and explore new paths for growth and innovation.