KPMG discusses economic downturn and tech jobs
Adrian Michael says in New Zealand the focus for technology companies has also shifted from cost cutting to long term growth. “Most of the job cuts have already been made, but we still can’t expect rehiring to begin in earnest for a while yet.”
With technology driving the recovery it is also critical that innovation is encouraged in New Zealand. “The proposed government initiatives on broadband infrastructure are critical to providing New Zealand companies the ability to compete on a global scale and with technology a core driver in the New Zealand economy, it is vital to encourage innovation.
“The disappointing demise of the Research & Development tax credit means it is important that the New Zealand government finds measures, whether through grants, education, export support or a focused tax credit system to encourage New Zealand firms to innovate. The technology sector can be an engine room for the NZ economy. Overseas, many governments provide a range of assistance to encourage innovation and New Zealand firms do not compete on a level playing field.”
However KPMG does warn that two aspects of the technology recovery may not flow to New Zealand. “New Zealand is by and large not a big player in consumer devices market such as smart phones, which has experienced significant growth despite the recession. And New Zealand is also not strong in the area of technology manufacturing, which is at the front of the supply chain and therefore likely to recover more quickly.”
When asked to identify the biggest challenges they currently face in dealing with the economic downturn, the US executives most frequently said finding new sources of revenue (66 percent), managing costs and restoring business confidence (42 percent each), and adjusting to changing customer demand (37 percent).
When asked to identify the top three triggers they think will spur an economic recovery, 42 percent of the technology executives cited improved business confidence, 41 percent said improved consumer confidence, and 32 percent said an improved job market. Increased consumer spending was fourth (30 percent) but was most frequently cited by the hardware technology company executives (39 percent).
Three triggers cited least frequently were effective regulation (6 percent), government stimulus spending (5 percent) and the government bailouts (4 percent).