Interview: NZTech CEO: 'We don't have enough big ICT companies'

NZTech's CEO, Candace Kinser, talks about the need for bigger companies and bolder ideas from the country's ICT companies, and how government policy frameworks can help enable it

Candace Kinser, CEO of NZ Technology Industry Association (NZTech), chats with ComputerWorld NZ on the important issues facing the country’s ICT sector and how the association is working with both the government and the industry to enable faster, stronger growth in the future.

Q: How do you perceive NZTech’s evolution in the last few years?

Candace Kinser: NZTech was started five years ago. The original purpose of the association was for the multi nationals to have a unified voice to the government. There was a real area of interest from the government at the time to deal across some of its largest suppliers. That got the association up and going.

Just about two and a half years ago when I was asked to join as CEO, one of the things that I wanted to do was to broaden the ecosystem and look at bringing in the entire representation of ICT. So not just the large multinationals but the high-growth startups, which is what I had just come out of.

I wanted to try to bring in more universities and polytechnics to get their inputs, as well as government agencies, such as NZTE and Grow Wellington – who have joined. I wanted the association to focus on everybody – from the individual right up to the multi-national and everything in between. That was kind of my first step.

The second area that I wanted to focus on was to look for the pockets where we need to pay particular attention to – the soft spots or Achilles heels. And one of those was the women tech executive scheme that we started. It wasn’t just a reinvention of the old Women in Technology group, but more exactly to look into how we could provide encouragement and support for career development to women who have made it to a senior management role.

What’s next for them? You have gone through 10 to 15 years of career moves, you are at this level, NZ is a fairly small place, so how can we make each other aware of more opportunities and also give them encouragement to stay with the game?

It's also looking at bringing up young women, getting them interested in technology and poaching from other industries. Getting highly talented women from banking or insurance into technology, who have the right skill sets to be in management roles in technology. That’s been going on for a year and a half.

The other area that I wanted to focus on as part of the soft-spots was the education sector. We have gathered up polytechnics and universities in the Auckland area – to begin with. We have got Unitec, University of Auckland, and Massey University on the shore. We have looked at what the current degree programs are, and co-related it with what is in demand in the industry. What does the industry not like in students coming out now, and what more do they want them to do? We are trying to re-tailor these aspects into education. We are also looking at business students and trying to address aspects of technology training they need and that it is incorporated well.

So we started the Auckland Education Advisory Group, and we do a lot of cool stuff in that area.

Those are kind of the big goals that I have. The other one was actually making this a sustainable organisation. The initial funding to get it going came from the multinationals. We were in debt to them in the early days. We have since paid off those debts. We have become financially viable.

Initially it was just membership fees that sustained us. Right now we are trying to focus more on events. Particularly niche events where we can add value.

One of the last areas that I wanted to cover off when I initially started was a change of name. It had to come at an appropriate time when we had accomplished this ecosystem growth. We also wanted to attract high tech manufacturing, robotics and companies from different industries that weren’t ICT per se. We did the name change in August last year. We had an unanimous vote approving the change in name. We had one of our Victoria University architectural student design the logo. That’s the history of where we are today.

Over the last 12 months we really took advantage of the focus around the Americas Cup and the fact that NZTE had committed to leverage various industries like marine, ICT into that region to help some of our companies.

Here we are, essentially selling snow to the Eskimos by taking technology companies to Silicon Valley, but at the same time it was a fantastic way to showcase some of the best and brightest in the companies that we have into a region where they would be truly tested. If you get a venture capitalist’s attention there, or gain traction with this market, you are well on your way to being a success across the US.

In the mission, we took 37 start-up companies into that market.

When you say you are from NZ or that you are a NZ company, that’s a real conversation starter. But very quickly entrepreneurs get that this might get them on the front porch, but they have got to really do their thing to get in the front door and get yourself known in that market. It takes good business practice, it takes a good product, a great team and the ability to move and be agile.

Candace Kinser, CEO, NZTech
Candace Kinser, CEO, NZTech

In the last 12 months, we have also focused on getting better relationships with the government. We have been really working closely with the DIA (Department of Internal Affairs) and understanding and being part of the 2017 ICT blueprint, which is great.

We are also working closely with Immigration NZ to bring skills and talent into the country. We are also working on issues around the employee share option plans agenda, along with the finance bill and patents funds.

If you can think of all the things that work in your favour when you have an office in Silicon Valley, we are just the opposite of that. But we still manage to have some amazing success stories and to win despite the odds.

In the next 12 months we will definitely keep supporting high growth export companies through a digital health program with Callaghan and NZTE. We have got a whole stream of programs and $3 million of funding over the next five years to make that happen.

The main agenda that I want to focus on again is paying attention to the skills and talent framework for the country. So really diving deep into the future, which is about educating our kids, looking into how we can look at policy amendments, how can we look into taking advantage of N4L broadband rollout that is going on.

It's also upskilling our teachers and giving them incentives to use the digital education format in the classroom, right through to continuing the work in trying to onboard the kids into the computer science programs and making more seats available within universities – that has not been reviewed in more than 10 years.

We are also working with Immigration NZ in visa restructuring, and educating our independent participants about the fact that there are so many opportunities for them to work with immigration NZ to fast track people that they need into the country. And then through to career development for women, re-employment within the workforce, and then towards the end of the careers, getting more people with tech backgrounds on to boards.

That is what is in store for the next 12 months – getting that foundation going.

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Q: What do you think are the biggest challenges facing the industry in the next couple of years?

CK: The number one challenge has to do with the ability to scale for companies that are growing in this market and looking at expanding and exporting increasing, their capabilities in terms of their R&D and just becoming bigger companies.

Xero started with Rod and a couple of people in their living rooms, to becoming this company that is a juggernaut internationally. Can’t we replicate that environment? One of the hardest things for Rod in the early days was finding the right people, the right team. Now they have got a brand, they can attract talent.

But we have also got hundreds of smaller high growth companies that have not become brands. They don’t have the funding and they don’t have the availability to actually scale rapidly in this market. If you look at that as a number one issue, there are a whole bunch of others that come off it such as seed funding, growth capital, governance, structure, export capability and skills and talents.

New Zealand is a very niche country. The products and the companies that we create are often in areas that are overlooked by other countries or companies because they perceive them as too small an opportunity. We don’t build databases and mobile phones, for example. We build companies that do funky stuff with databases, and we build companies that do funky stuff with apps.

We fly into the radar in many areas and we come up with some interesting innovations in agriculture and cloud space and that sort of thing. On one hand it is very good and it provides us with a neat little collection of eclectic companies. But on the other hand it is also very difficult in many ways to scale those companies.

While scale is one area, the second area is that we are so used to playing in these niche, fixed little backyard areas that sometimes it is hard to get that niche idea to be a multi million dollar company. But if we start looking at other opportunities and competing with some of the bigger bolder ideas, we can go a long way.

That’s a tricky balance to achieve. For every big company, there needs to be innumerable small firms. We need those. But we have got tonnes of small and niche companies. What we don’t really have enough of are the big ones. We have got a few of them, but we need more of those. The ones that you name off they have become audacious companies in their own right and that was because the founders had the vision. I think we need a few more to be financially able to back those really big goals and dreams to create the next mobile phone or perhaps or the next Navman of the industry. We need more of them now and I don’t see a lot of them coming through.

We are a small population, without a lot of money, without heavy deep skilled talent, we are far from our markets and we talk kind of funny to Americans. If you can think of all the things that work in your favour when you have an office in Silicon Valley, we are just the opposite of that.

But we still manage to have some amazing success stories and to win despite the odds, which is fantastic.

Q: Why do young Kiwis not see technology as a good career choice and how should this be addressed?

CK: Look at the education and kids. They are in these amazing little bubbles of creativity and imagination and they are encouraged to draw and finger paint and expand every ounce of their horizon. However, once they start down the path of traditional education, it rapidly becomes walking in a certain way, staying within the lines and listening to people talk about only certain possible solutions to problems. All of a sudden the creativity gets channelled into process. You need that, you need a baseline education, not everybody can be an artist all of their lives.

With technology and the people I have met, who have been incredibly successful entrepreneurs, especially with developers, it is much more of an art than a science in many ways. A creative bend of thinking, looking at how to do things differently and a keen problem solving ability – that is all part of their personalities.

Without chastising the education sector, I think a lot of that is taught out of kids. Technology is taught in a very process-oriented manner that can be nauseatingly constrained and boring, rather than being approached as this amazing creative environment where you can actually have fun, do design, and think outside the box in terms of problem solving. So it is the way it is taught, rather than what is taught.

Take Frances Valentine of the Media Design School. She is kind of the Joan of Arc of education, in the sense she is working to change the way it is done, and – as a one woman show – encourage youth and kids to become passionate and excited about technology.

I have been there for a lesson involving robotics to seven-year-olds. They were learning about motherboards, while having absolute fun. It was amazing. Imagine if you could take that sort of learning and put it into mainstream schools. How exciting it would be and how fun.

It really does come down to teaching teachers how to teach – giving them incentives to change. If you look at the average age of teachers in NZ, it is over 50 years. And they have been doing it for 25 years, so why would they want to change now? They are closer to retirement so they would rather do what they have been doing.

The other half of it is giving them the right tools and structure around different subjects. It is not just about a course in technology. It is about teaching chemistry, about maths and geography, and technology as part of that.

Q: How are you working as an association to improve educational offerings?

CK: We have taken the approach to work with the institutes themselves – the universities and polytechnics. The low hanging fruit is to help them understand what they need to change about curriculum and then put pressure on the government. We don’t have enough people in the industry today. That we need to fix as a matter of urgency.

There’s two ways you can do that: The first is Immigration NZ, which is the fastest – just get the people into the country that already know what to do. The second is to try and up-skill the kids who are enrolling or about to enrol in degree programs and will become a product our industry in the next few years.

After that you work backwards to high schools and elementary schools, and work down that way. Immigration NZ is fantastic and supportive. They have already got this worked into the program. It is just a matter of us working together to find some more solutions.

The second aspect is working with the universities and the polytechnics to update and change the curriculum.

The third step is pressuring government to look at changing policy around how teaching is funded at universities and increase the number of available seats.

It is a matter of push and pull. We need to push the kids to generate interest. We need to pull the levers with the government to open up available seats. Going forward, we also need to work with education facilities from middle school and high school all the way through to help them understand where technology is going.

In NZ, the universities are funded based on their research, and not necessarily on how or what they teach. In other countries such as the US and Europe, they are funded based on what they teach and how they actually get their students through it. Ideally we would start moving towards that funding mechanism in the future, particularly for science and technology subjects. It is a hard change to bring about, but one that we need to move towards.

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Q: What would be your wishlist of the NZ government?

CK: It is the government’s responsibility to provide a framework, not theirs to be the bank for businesses or universities. From my perspective, I believe that being able to create enabling legislation that the education system can utilise, being able to take advantage of technology or best practices that are being done in other parts of the world, to learn from those, and to say 'look, these are the frameworks within the education environment that are producing highly motivated, highly skilled students that are completely capable of operating in the 21st century in the digital framework'. That is one part of it.

The second part of it is when you look at growth and funding in high growth companies, there are some real issues that we have. For example, having our Kiwi entrepreneurs live and work in the US is very difficult because we don’t have the agreements with US immigration that Australia does. For Australians, it is very easy to live and work and do their business in the US. Their government works very closely with the US to make that work.

We have been delinquent in that area. There is this whole list of requests when it comes to export entrepreneurs who are not just going to the US but all around the world. We also need frameworks around different taxes, subsidising around R&D and related credits and creating joint initiatives with other countries. That is the framework we need. It is not necessarily throwing money at entrepreneurs so that they hop on a plane and go overseas.

My wishlist would include working closely with the US on policy framework around core areas like skills and talent development, and export and high growth companies and their needs. Then look at domestic companies – how do we incentivise them to grow and reinvest in their business, either through R&D or increased collaboration with each other? And having some policy framework within our central government that actually pays attention and enables support for some smaller NZ companies. That does not necessarily come down to governments buying from small companies, but it comes down to perhaps incentivising the larger providers to work with smaller providers to come up with solutions.

If we look at skills talent, export-led firms, domestic and government relationships, those will uplift and help the industry to grow as a whole.

The problem that we face right now is that it has become extremely fragmented. And the ability to have all of these different industry groups try to work together in a cohesive plan can be difficult.

Q: How does the fragmentation nature of industry associations at local and regional levels affect a move towards national improvement of the industry?

CK: There are more than 50 industry associations that I know of which are related in one shape or form to technology and ICT. A number of them have been around a lot longer than our group has. Some of them have sprung up recently. A large number of them are regionally based.

One thing that NZ is very great at is when something needs attention and we need to do something about it, there is no shortage of people getting together and saying we are going to make a difference and change. The problem that we face right now is that it has become extremely fragmented. And the ability to have all of these different industry groups try to work together in a cohesive plan can be difficult.

One of the things that have been requested by government, is to try and consolidate these areas, which is not an easy task.

We are quite happy to be the body that actually is the one that interfaces with the government, and quite happy to represent different ideas and opinions. But one of the key issues that I see is that some of these groups have their own agendas that work against the tide. We have an agenda that we can collectively agree on. We have relationships, we have developed close ties with NZTE, Callaghan and the central government. We have that interface, and we are quite happy and supportive to be the go-to-person for other industry groups in the future. I do think the pressure would be on that it does continue to consolidate.

Each of our regions has a different feel, personality, different issues, strengths and weaknesses. New Zealanders are competitive. That works for and against us in many ways. From a regional perspective, having that close representation, having those networking events and getting to know peers in those areas are vital.

As for regional program, I am aware of whole bunch of them. It is like growing a company. Being able to scale, get the traction and the buy-in on a national level and have it take priority over what other companies are doing can be difficult.

Often times there are initiatives that are being done in a community level and that is where they should remain, because they are having the greatest impact in that community. If you tried to bring what is working to another it just might not work at that level. So again, looking at that passion and commitment we have and whether it can or not scale is a case-by-case basis, but it is something that we need to look at closely.

Watch out for Candace Kinser's regular column on computing and technology in the country on ComputerWorld NZ in 2014.