Aardvark Daily

Please visit the sponsor!

Can we really do hi-tech here?

For decades, Tait Communications has been held up as a great example of how small Kiwi companies can compete in the hi-tech sector on a global stage.

Started decades ago by Sir Angus Tait, the company was for years the manufacturer of ubiquitous VHF radio-telephone systems used by commercial operators around NZ through the 1970s and 1980s.

I recall many an hour spent installing and repairing Tait RTs back in that era and marveling at how "average" the design and construction of these sets were.

Tait even dabbled in the CB radio market with a set that was, once again, pretty damned average in design, stying and construction.

However, the company continued to develop its products and by the turn of the century was apparently exporting to other countries all around the world.

Long after NZ had given up on making TV sets, stereos and other consumer electronic devices, Tait was a standout -- employing large numbers of people in its Christchurch factory and spewing out "world class" product for domestic and export markets.

So it was very sad to read in today's paper that the company is laying off 74 workers due to "restructuring".

The same goes with other tech-giants such as Rakon who have laid off staff in recent years after moving much of its production to China.

The reality appears to be that even in very niche markets, we just can't compete on a production front with the low labour rates and favourable incentives being offered by countries such as China.

F&P is another NZ company that has ditched Kiwi workers in favour of those who will work a week on a day's pay elsewhere in the world.

Now with my business hat on, all this off-shoring makes sound business sense. There's no point in paying people $1000 a week to do a job that others will do for $300 a week.

Of course that would be fine if we had a very vibrant R&D sector which was constantly coming up with exciting new products and whose IP could be leveraged to create huge export receipts even when the resulting products were made offshore. But unfortunately, we don't.

In fact, NZ's R&D performance is abysmal.

Not only are huge numbers of our graduates leaving the country in search of decent paying jobs but many innovators are also finding that just as other nations offer powerful incentives to set up manufacturing businesses there, they also offer similarly attractive incentives to relocate your R&D operations as well.

I can't help but get the feeling that here in NZ, the government considers R&D expenditure as "just a way to try and pay less tax on your profits" rather than a crucial foundation for boosting our export receipts.

"No way!" seems to be the response to any suggestion that we offer parity with our trading partners when it comes to the issue of tax credits for R&D activities.

"Too complex, too easily rorted, not necessary" seems to be the perspective of those who control the purse strings. "Far better that we use our giant brains to pick winners such as the Martin Jetpack" is their perspective.

Oh well... never mind.

Watch out for even greater numbers of Kiwi exporters who are also employers to sell up and shift production offshore. Watch out for even greater number of Kiwi companies to sell their entire operations to overseas purchasers who will then relocate operations offshore. Watch out for the government to pick more half-dead nags to receive taxpayer-funded "grants" and watch out for our rankings in the OECD group to plummet further.

But hey, the beer's good, and the food's fresh. Hmmm...what's on the telly tonight? :D

Is it time for a major shake-up to keep "Proudly NZ" *in* NZ and to get behind hard-working, very clever Kiwi innovators and entrepreneurs in the way that so many other countries do with their own?

Please visit the sponsor!

Have your say on this...

PERMALINK to this column

Oh, and don't forget today's sci/tech news headlines

Rank This Aardvark Page

Change Font