No less than 40% of the companies in this year’s Deloitte/Unlimited Fast 50 are either ICT companies or “service companies” with ICT as a key business facilitator, says Xsol CEO John Blackham.
But there is still no significant support going into the industry from government, he says.
This is in spite of the ICT sector being identified by the government’s Growth and Innovation Framework as one of the three priority sectors crucial to the growth of the economy.
What the sector lacks, says Blackham, is a single major body representing it; an equivalent of Federated Farmers or the NZ Manufacturers’ Association, that will be a forceful advocate with government.
He was talking with Computerworld before the NZX Technology and the Markets Forum earlier this month.
The obvious man to pick up on Blackham’s argument is Garth Biggs, who heads the embryonic umbrella group for the industry, ICT-NZ. He acknowledges the body has a problem convincing companies to take on corporate membership.
“The people in the industry say ‘you’ve got us by the heart and we’ll come in boots and all as individual members, but you’ve not got us by the head; you’ve not given us a way to explain [the benefits of corporate membership] to our boards.’
“We’ve not filled in the detail of what we can do for them,” he acknowledges, and part of the problem is that he and others leading the ICT-NZ effort don’t know what the various sectors and companies within the industry want.
There is still a role for a single industry body in selling the strength of the industry, he says.
“Part of [ICT-NZ’s] vision is that we sell the sizzle and you [the constituent companies] provide the steak. But if I were sitting on shareholder’s funds, I’d be wary of an argument like that.”
Hesitancy on the part of the ICT companies in turn affects the willingness of the government to lend its support, Biggs says.
“There’s a flow on of government saying ‘if industry shows its support, we will support you too, but at the moment, it’s eight guys [the ICT-NZ establishment board] sitting around a table with a dream.”
Treasury has a sceptical view of the ICT sector, said a finance-sector representatives at the NZX forum.
“They argue that if New Zealand had a natural advantage in ICT, we’d be in it already,” said Stock Exchange CEO Mark Weldon.
This attitude is reflected in the story of two economists walking down the street when one remarks that there seems to be a $10 note lying on the footpath in the distance. “There can’t be,” says the second economist; “if there were, someone would have picked it up by now.”
“To me as a layman, the only natural advantage in ICT is being first,” Weldon said.
“I’m not a supporter of handouts,” says Biggs. “We need to be out there talking about what ICT can do, for the economy and for government,” which accounts for a large chunk of ICT business.
There is considerable scope for the use of ICT to improve the efficiency and effectiveness of the public service, he says. Acceptance of that in government would constitute the right kind of support.
“I really think there is a place for a credible knowledgeable group that can show us what we can get out of ICT to build a better economy.”
ICT or ICT-aided service companies in Deloitte/Unlimited Fast 50
Company Position on list
Run the Red 5
Digital Island Communications 6
Agility (IT recruitment) 11
Next Window 14
Crystal Solutions 15
Mako Networks 16
First Rate NZ 21
Tiger Networks 23
Magic Pulse 24
Rimu Hosting 25
Particle Systems 26
Optimal Usability 27
Server Works 30
Optima Corporation 31
Observatory Crest 40
Red Vespa 46