Labour targets ICT as second largest economic contributor by 2025

Monday 7th November 2016

A Labour-led government would target the ICT sector to be New Zealand's second largest contributor to the economy by 2025, believing it is a job-rich source of growth for a nation of small businesses.

While the precise definition of what constitutes ICT is up for debate, the party believes it currently sits somewhere between the third and fourth largest sector, behind tourism and the dairy and wine industries.

The party's finance spokesman, Grant Robertson, unveiled the target when launching the results of the party's two year 'Future of Work Commission' at its annual conference in Auckland over the weekend, unveiling a raft of proposals to improve intellectual property protection for small and medium-sized tech businesses, infuse schools and communities with digital learning opportunities, and a shake-up for innovation, science, and university research funding.

Government procurement policies would also seek to "better support local intellectual property" by breaking down large-scale IT projects into smaller parts "to manage risk and opportunities for locals" and a Labour administration would appoint a chief technology officer, reporting to the Prime Minister, with responsibility for a five-to-10 year "technology roadmap".

"Innovation and the likelihood of intellectual property remaining in New Zealand should be a relevant factor in selecting NZ Trade and Enterprise clients for support," the document, which does not yet constitute settled party policy, says.

Of the target to make ICT the second largest part of the economy, the commission's report says it will "require the government to tackle the issue of the micro-multinational, our barriers in education, the reliance on contracting, and the growing digital divide".

The report also proposes expanding the Seed Co-Investment and Pre-Seed Accelerator funds as well as deepening the pool of angel investors by partnership angels and serial entrepreneurs.

However, the document contains some uncomfortable reading for participants in the science sector, universities and the current government's flagship agency for commercialising new discoveries, Callaghan Innovation.

It says while Callaghan's vision is the right one, its "performance has been poor", taking three years to define its strategic direction has been "too slow", and its growth grant process is "unfocused".

The commission proposes a "detailed review of the science and research funding system and oversight agencies to streamline processes and develop a more strategic partnership arrangement by the government".

This would include university research and commercialisation, and would assess research funding processes that the commission suggests are increasingly complex for applicants and open to "gaming", which the paper says is particularly evident in the universities' Performance-Based Research Fund.

The commission also proposes a significant change to Labour's long-standing policy to offer research and development tax deductions, suggesting these should apply only to wage and salary costs, rather than more widely as the current policy envisages. The issue is understood to have created intense internal debate, but responds to feedback from business groups that open slather R&D tax incentives were less popular than well-targeted grant funding.

BusinessDesk.co.nz

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