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One would assume that the situation where there's a dearth of supply and an excess of demand would produce spiraling prices -- I mean, that's the way a free economy works, right?

So why haven't wages in the IT sector gone through the roof?

Could it be that perhaps we don't really have as much of a shortage of IT skills as we're led to believe?

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Could it be that perhaps the real problem is that employers just aren't prepared to pay the going rate for local IT workers and would rather hire immigrants who are prepared to work for less?

To be honest, I've got to say that I have no idea which is the actual case -- but I'm still left wondering why Kiwi IT salaries haven't moved very much at all in the past four or five years.

And while on the subject of our IT industry and the world at large...

Is a window of opportunity that was once open to us about to close?

I'm referring to our ability to grab a good slice of the international knowledge economy's (KE) market for hi-tech services and products.

If you go back a few years, the Kiwi dollar was at less than US$0.50 and we still had a good stock of local IT workers who could easily go head-to-head with any in the world.

Move forward to today however, and you see that our dollar looks set to break the US$0.75 mark within a week or two and we're allegedly out of skilled IT workers. If we couldn't grab a decent share of the market before with a weak dollar and a strong IT workforce, how on earth are we going to do so now?

Have we simply missed the bus? Did we pour far too much money into "The Arts" and trying to pay back a cultural debt (which has an unserviceable interest rate) instead of really pushing ourselves in the KE while we had a very real chance?

Let's not downplay the significance of a Kiwi dollar that's now stronger than it's been in almost quarter of a century...

Watch for lower petrol prices (oh yeah, sure!), rising levels of unemployment (as exporters struggle), reduced overseas earnings, etc.

Even local retailers will probably find it hard-going as they try to compete with an increasingly savvy customer-base who realise that they can now save a fist-full of cash buy purchasing many products direct from the USA.

And to make things worse, the Reserve Bank is expected to hike interest rates again shortly -- a move that's bound to lift the value of the Kiwi $ even further.

It looks as if the wheels might just fall off the government's free ride on the back of global prosperity real soon now.

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