NZ ICT Fading Away?

Are NZ tech companies simply fading away?

In this morning's New Zealand Herald, Peter Griffin posed the question above. He identified two key issues.

1) The lack of investment in core scientific Research & Development which was highlighted earlier in the week when 460 scientists and academics wrote a joint letter to the Government pleading for more investment, and

2) The crippling IT skills shortage currently facing the country.

Interestedly, his column opened with an observation on Richard Mander and Humanware, the Christchurch maker of the BrailleNote computer. The plot went like this:

NZ ICT company - acquires offshore 'strategic investor' - move IP / development offshore after a few months - nowt left in NZ - NZ ICT company fades away.

This is my view raises some other equally critical points not covered in Griffin's analysis. One stands out.

Accessing capital for development and expansion from the NZ investment community for these very same ICT companies is damn hard. There is not enough about, whatever the NZ VC industry might say. I am personally aware of NZ ICT businesses who are so cynical about the claims made here, that they are currently talking to offshore investors. They say, as Rod Drury blogged recently, 'just look at the record'.

To prevent the 'fade away' phenomenon, before a 'strategic investor' comes on board, they need to understand the intended structure. They cannot be blamed for moving IP and development offshore if this has not been nailed down at the outset. NZ is still home to great innovation and great technology. But being able to access home grown capital (and in sufficient amounts to make a real impact in global markets) remains the most significant challenge for many NZ ICT businesses. Address this, and the 'fade away' phenomenon can begin to be managed.