Dunedin IT scene: the art of creating a city for IT start-ups

Sarah Putt visits Dunedin to find out how the city intends to reinvent itself as a destination for entrepreneurial IT companies

A Silicon Valley in every city would make the dream of a weightless economy in New Zealand a reality. But in Dunedin the council isn’t aiming for an ICT hub that mirrors the iconic San Francisco business area. Instead, it’s working on establishing a Creative Quarter.

Peter Harris and Graham Strong from Dunedin City Council’s (DCC) economic development unit are drafting a plan that they hope will transform run down buildings in Princes Street, located one block away from the cafe and gallery scene at the Octagon, into an artistic and IT mecca.

Their vision is for a vibrant precinct in which artists and start-ups work together among cafes and hotels, and which will attract the attention of IT innovators.

There are already IT start-ups, musicians, designers and artists working in the area. But the formerly majestic buildings are in need of repair (and earthquake strengthening) and the area between Princes Street and the harbour is dissected by state highways, reinforcing the idea that it is a place you move through rather than stop in.

But, Harris says, in a city of 120,000 with slow growth opportunities, and a dwindling manufacturing presence, you don’t build a business park and hope the people will come – instead you do the best with what already exists. “We don’t have the land, we probably don’t have the money or the demand for bright shiny buildings so people have to have their own answers,” he says.

Traffic planning, and making places for new green areas, as well as encouraging businesses to set up shop, is part of the work that lies ahead for the DCC. It may, as Strong says, end up being as simple as erecting a sign denoting the area as the Creative Quarter, but whatever happens, encouraging IT to Dunedin is considered a necessary step to ensuring the city prospers.

According to Statistics NZ, Strong says the average IT employee creates $142,000 in GDP for the city – compared to $55,000 for education, and even less for tourism. He says there are around 160 IT firms in the city, with a core ICT cluster of 55.

Harris says that while many of these IT businesses are exporting their products and services, they haven’t been visible in the city, especially to potential employees such as the students located at the other end of town attending the university (40 percent of Otago University’s student population comes from the North Island).

“People who work here just get on with it,” he says. “That’s the nature of the place. You don’t have the big noters trying to be clever and known. I think that’s cool in some ways but when you dig and find out how many software companies there are you think – why the hell doesn’t the public know that?”

Strong has been running an internship programme for the past three years that seeks to match IT businesses with students. It’s billed as “Sexy Summer Jobs” and to date there have been 71 internships, from which 41 jobs (fulltime and part time) have been created. Funding from the DCC Industry Project Fund for businesses to help with remuneration has increased from $45,500 in 2009 to $125,000 this year, with around 44 IT internships up for grabs in 2011.

“The fundamental part is that it’s not tagged to the students’ academic outcome at all, it’s completely aligned to the needs of the business. It doesn’t go towards their grade, they get paid a really solid remuneration,” Strong says.

On average the students earn between $16 and $20 an hour, with one intern making $8000 during a summer project.

Students are chosen by businesses after a process which Strong describes as akin to “speed dating” – where they get seven minutes to sell themselves to potential employers.

* This is the first in a series of articles about the Dunedin IT scene. Tomorrow Computerworld looks at the work of Associate IT professor Samuel Mann at the Otago Polytechnic and talks to head of computer science at Otago Uni versity Brendan McCane.

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