Forum: Economy at a crossroads, IT shows the way

A visit to Scott Technology provides an insight into the future of New Zealand's export industry

If you’re searching for a metaphor to describe the crossroads that the New Zealand economy has arrived at, then take a drive to 630 Kaikorai Valley Road in Dunedin.

There you will find Scott Technology, an engineering company that began in the city in 1913. Its shiny newish building is located beside an abandoned freezing works belonging to Silver Fern Farms. The two companies are in a joint venture manufacturing processing systems that can chop up ten lamb carcasses in a minute.

Greg Chiles, Scott Technology chief financial officer, tells me the key to the operation is the software the company’s developed. Before it is sliced and diced every carcass is x-rayed and then electronically analysed to determine the number and position of the animal’s ribs. Each time the blade approaches a fresh carcass it automatically recalibrates to a different angle and height in order to maximises the yield.

The meat processing part of Scott Technology’s operation achieved revenue of $4.9 million in the last financial year, roughly 10.5 percent of total revenue. The other industries the company is involved in are mining, appliances, and industrial automation.

Headquartered in Dunedin, Scott Technology employs in excess of 60 people in the city, and has manufacturing plants in Christchurch, Auckland and Wellington. Last month the publically listed company raised $9.5 million in a rights issue. It also bought a 75 percent stake in the Teknatool factory in China. Chiles says part of the rational for investing in China is the high New Zealand dollar. The factory is located in the same Chinese province where Fisher and Paykel set up its manufacturing operation after it bailed out of Dunedin in 2008.

I visited Scott Technology at the end of a two-day trip to the city as part of Computerworld’s ongoing series profiling the IT scene in different parts of New Zealand. The people I spoke to seemed resigned to the idea that a small city can’t attract big business, but instead what it can and should be doing is nurturing innovation. In particular IT innovation.

The Dunedin City Council has looked north at the students living near the university and then south at the emerging IT companies in town and decided to match make. It has created an internship programme in which IT students pitch their talents to prospective employers. The council also wants to create an area that will encourage IT starts ups to set up shop in a kind of 21st century artists’ colony.

It is far removed from factory floors, meat works and grass paddocks.

Scott Technology shows it’s possible to draw on the country’s historic strength of agricultural excellence in order participate in the new global economy. But while farming remains a mighty export earner, as a country we can’t really keep depending on grass to make our living. Not when the processing of meat, which was once carried out by large teams of people wielding band saws, can now be done by machines that chop up ten carcasses in a minute.

The future is in high-value technology exports, and that’s why my visit Dunedin to check out its IT scene was inspiring - there appears to be a core group people in influential positions in that city who get it.

But, and this the same everywhere, where are the women? There remains a gender imbalance in ICT women (see Encouraging women into technology careers). Both the head of computer science at Otago University Brendan McCane and the associate professor of IT at Otago Polytechnic Samuel Mann told me that women make up just 20 percent of their courses. It’s a concern because, as Mann put it, IT is “missing out on half the intelligence of the world.”

If you agree that the future of New Zealand’s economic growth lies in technology exports, then we can’t afford not to engage the entire population.

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