KEY POINTS:
We have a short supply of innovative, export-orientated tech companies in New Zealand. So when they collapse leaving investors short-changed and are carved up the way Argent Networks has been, it's depressing news.
Businesses stumble for all sorts of reasons, but more often than not in New Zealand our best tech companies don't fail, they simply vanish, as foreign shareholders originally brought in as "strategic investors" to open up world markets restructure them and move the intellectual property and best talent overseas to somewhere cheaper where conditions and incentives are more favourable.
It was only last September when Richard Mander showed me through the slickly run manufacturing arm of Humanware, the Christchurch maker of the iconic BrailleNote computer.
Mander, who returned to New Zealand to head Humanware after a successful career in the United States - including a seven-year stint at Apple - unveiled some fantastic new products which I'm still not allowed to talk about due to having signed a non-disclosure agreement just to see them.
In November, Mander and Humanware picked up gongs at the Hi-Tech Awards. But later that month Mander resigned, unwilling to move to Canada where Humanware's owners have moved the bulk of the company, decimating the Christchurch-based team and basically killing a truly New Zealand technology export story.
If the cut and thrust of everyday business isn't enough to batter our fragile tech sector, we've got some increasingly worrying structural issues to deal with. Two of these have been highlighted this week.
The Herald's front page on Tuesday carried news of an unprecedented move by 460 scientists and academics around the country to write a joint letter to the Government urging it to increase funding of core scientific research and development.
We contribute just over 1 per cent of our GDP to science research, well behind others in the OECD, many of whom average 3 per cent. Even our largest companies aren't investing enough in innovation.
The statistics give the constant talk in this country of fostering a knowledge economy a hollow ring, especially as other countries plough increasing amounts of money into their science and technology sectors.
The country's greatest brains are saying we are losing our best talent because we are not committing enough resources to keep them keen to work here. That's a serious issue.
At the same time we're facing a crippling IT skills shortage, one that is leaving the likes of Telecom with hundreds of unfilled vacancies.
That's why New Zealand has a boosted presence at this year's CeBIT tech trade show in Hanover, where a delegation of New Zealand companies, immigration officials and recruitment companies is trying to lure away Europe's best IT talent.
On Saturday busloads of German students will arrive at CeBIT to meet the New Zealand delegation.
One IT recruiter on the show floor, Hudson's Campbell Hepburn, has been inundated with software developers, engineers, telecoms specialists, business intelligence consultants and database analysts interested in working in New Zealand.
It seems our enviable lifestyle is going to partially dig us out of the hole created by the brain-drain to Australia and the acute shortage of skilled labour in many areas of IT.
But if boosting investment in science and technology to stimulate innovation and strengthen the skills base aren't election issues, I don't know what are.
The tripling of science R&D funding the science community is asking for seems like a good start. But we also need to make it more attractive for innovative companies to invest here. That in turn is going to encourage people to study in science and stay once their studies are completed.
We need to aid our exporting technology and science companies in keeping their capital base and intellectual property here for longer.
This challenge has to become a mainstream election issue.
