Globally, the SaaS sector is on track to be worth one trillion – yes, trillion – NZD by 2030. For a sector that barely existed a decade ago, this represents a massive opportunity for New Zealand. And here we are with this gift horse that we are good at, and we’re looking it in the mouth.
Last week the Technology Investment Network (TIN) released its annual TIN Report 2021. It found that at New Zealand's 200 largest tech export companies (TIN200), employment opportunities dropped to 3,000 jobs in 2021, from 4,000 jobs in 2020. It attributed this drop in jobs to the Covid-19 border closures.
That’s 1,000 jobs lost in the tech talent war in the last year.
For New Zealand’s Software-as-a-Service (SaaS) businesses, this trend is particularly poignant. To achieve SaaS success, businesses only need a keyboard, an internet connection, and most importantly – people.
Talent is the one true constraint holding back New Zealand’s SaaS sector right now. For SaaS businesses, in particular, they can easily set up an office elsewhere unlike other tech sub sectors that have manufacturing or infrastructure constraints.
Despite ongoing tech talent shortages, the revenue of the TIN200 businesses hit $13.9B in the last year. The TIN Report lists SaaS companies Xero and Pushpay as recording the 3rd and 4th highest dollar value increases for 2021, contributing a revenue growth of just over $200m last year, with a combined revenue in excess of $2.2 billion.
These two SaaS businesses represent what’s possible for NZ SaaS businesses, of which New Zealand has many - particularly in the early-stage and scale-up phases. But the SaaS talent wheel is broken and if we don’t quickly fix it, Kiwi SaaS businesses will have little choice but to expand elsewhere and set up offshore.
New Zealand’s SaaS talent problem is twofold.
The first is that without global SaaS leadership talent entering New Zealand due to border restrictions, our country lacks the strategic expertise needed to grow more SaaS businesses and upskill our local talent into the roles we need them to fill. Being open to new solutions, like Sir Ian Taylor’s self managed isolation trial, will help speed up progress.
The second is we need better junior onboarding and training to move Kiwis into SaaS careers rather than relying on immigration. Yet without SaaS experts entering our country, New Zealand has limited talent to grow its junior domestic SaaS talent pool. It’s a catch-22.
Our hard-won Covid-19 advantages gained in 2020 have waned. The rest of the world is moving on. Action is needed urgently now, if we are to have any chance at even showing up to the global war for tech talent or secure our full slice of the multi-billion dollar SaaS pie.
We need to roll out the red carpet for global tech talent, like we did for global film talent.
As for many, border restrictions constrained Kiwi SaaS businesses by stemming the flow of SaaS expertise into the country. However, we’re no longer at the head of the pandemic – we need to start planning for the tail. We need a strategy to open the SaaS talent floodgates. Do we want to mention something here about the Silicon Valley exodus - saw stats recently.
Part of this strategy needs to include a plan to welcome SaaS talent with open arms to choose New Zealand to move to, rather than other enticing opportunities elsewhere. We need them here to play their much-needed role in growing the capability and expertise of New Zealand’s SaaS ecosystem. We’ve done this before for the film industry and reaped the benefits.
We need to roll out the red carpet and showcase what a truly wonderful country New Zealand is, and what a growing opportunity there is to play here in developing our SaaS ecosystem.
We need to create real-world pathways into SaaS careers for our domestic workforce.
The SaaS sector moves quickly, and technology moves even quicker. Traditional tertiary programmes are losing pace with the speed of the SaaS sector.
We need to create SaaS career pathways that are rooted in the real-world speed and agility of the SaaS sector. This needs to be in the form of short, practical skills-based courses that are designed to launch students straight into SaaS careers.
We need our SaaS businesses to drive onboarding programmes to grow junior talent.
There are thousands of tech jobs listed on Seek right now, some of which have been listed for months. The gap between entry-level and junior roles, to mid-level and senior roles is apparent.
Our SaaS businesses can help to bridge this gap by creating clear onboarding programmes to attract and develop junior talent into the senior talent our SaaS sector needs. There are already great examples of SaaS businesses doing this well, such as Joyous, Auror, EmergencyQ, and EcoPortal. We need to scale this approach sector-wide.
It’s simple – better equip New Zealand to fight in the global talent war or watch millions of dollars’ worth of opportunity be set up elsewhere.