Where the smart people are: the role of immigration in the tech economy

Every month, The Moxie Sessions brings together a small group of Auckland business thinkers to discuss ways New Zealand can take advantage of the internet and boost its competitiveness. For more, see http://themoxiesessions.co.nz.

"Because not all the smart people work for you," Bill Joy, a co-founder of Sun Microsystems famously said when asked why Sun was looking to collaborate with people outside the organisation on a software project. November’s Moxie Session was about whether our immigration settings are right for our tech economy.

Carl Andrews, Auckland-based relationship manager for Immigration New Zealand, sees immigration as a competition with other developed English-speaking countries (primarily Australia, Canada and the US) and thinks that migrants with scarce IT skills are increasingly in demand. Partly this is demographics, because migrants can help shift the proportion of older relative to younger folks, at least temporarily. Partly it is less on-the-job training than there used to be, meaning higher demand for people who have been trained elsewhere. And partly it is just the nature of the technology beast: with the growing importance of computers to economies, the people how make technology work are in hot demand. In short, the IT skill shortage is a big deal, it is a worldwide phenomenon, and it is not going away any time soon.

New Zealand’s current answer is a flexible and open immigration policy that, in Carl’s view, can help out in almost any situation with businesses wanting to employ foreigners. There are residence options, an accredited employer scheme that lets approved employers manage immigration themselves, and work visas for shorter-term projects. There are also visas for investors and business people, and entrepreneurs who want to set up businesses.

Trevor Gamon, production director for Gameloft, a French game developer with 29 offices across the world (including Parnell), is a migrant himself. He came here four years ago from the UK and nearly left again almost immediately because it was hard to find work in what was then a teensy local games industry. But luckily for us he got involved in setting up a local studio for Gameloft. Three years ago it had 15 people; now it has more than 115, around 75% of whom are immigrants, hailing from 22 different countries.

The main immigration challenge Trevor sees for his business is in getting people here fast enough. Three months would be a typical lag between when a contract is inked to the time when the employee is approved.

On the plus side, Trevor thinks New Zealanders have great IT skills, especially on the art side. Coders are harder to find here, and Gameloft has been working with Unitec and AUT to ensure that their tertiary training fits with what businesses really need.

Trevor says that lifestyle is definitely the line that he takes to attract people to come here, but salaries are competitive, particularly at present. Support for settling families is also crucial, including helping partners get jobs. Trevor says Gameloft has lost several good people as a result of their families not settling in.

Our third speaker, Sean Simpson, CTO of Lanzatech (recently described as the “second-hottest biotech company in the world”), came along with some rather radical ideas about doing immigration better.

Sean started Lanzatech in 2005, and it now has 80 staff in New Zealand, 50% of whom are masters or PhD level scientists, and 75% of whom come from offshore, working in a range of scientific fields. Sean says his recruitment strategy is to try to employ the best people in the world (which must be heartening for anyone reading this from Lanzatech).

Sean sees immigration as part of the response to a slew of New Zealand’s well-known economic challenges, including that it is good at starting companies but not so good at growing them big, that we need to encourage entrepreneurship and risk-taking, and we need to diversify our exports into manufactured goods, expand our services trade, and boost the intellectual property content of what we sell overseas.

The way he sees it, we cannot fill our economic gaps with New Zealand-born talent any time soon. And we have a bunch of foreign-born students here already (about 15% of the total, at last count), taking advantage of our quality education system.

Putting this together, Sean suggests giving any student who completes an advanced degree here a passport along with their degree qualification. Some of these people might not stay but more people would than currently do. And it is hard to see what the downsides would be from encouraging more young, skilled people with an obvious strong tie to New Zealand to stick around a bit longer.

Sean is in good company on this, with Boris Johnson, the mayor of London, talking about a "free labour mobility zone" between the UK, Australia and New Zealand. And there is clearly scope to do more to encourage business people to move to New Zealand: fewer than 5000 have been approved in the entrepreneur or investor categories in the last five years.

More people in might also help get us more flexibility in the countries that New Zealanders can go out to. It is striking how lopsided New Zealanders’ travel plans are, favouring the UK and Australia, and ignoring, relatively speaking, the USA and Asia. Free-trade agreement, anyone?

If those around the Moxie Session table are any guide, more liberal immigration policies will be a vote-winning policy of the future. So Sean’s strategy might show up in a political manifesto in due course. We shall see.

Notes:

Immigration New Zealand helpfully makes available a plethora of open data on immigration approvals here

Hayden Glass is a consulting economist with the Sapere Research Group, and the convenor of the Moxie Sessions.