KEY POINTS:
IT research company IDC has just released results of a survey that attempts to predict the growth of the New Zealand IT sector over the next four years. Its general findings are:
- New Zealand's IT sector will generate more than 11,000 new jobs from 2007 to 2011 and account for the creation of more than 300 new IT companies.
- Over the next four years, New Zealand's IT industry will drive $2.6 billion in new tax revenues and contribute new revenues of $2.8B to GDP.
- Annual IT spending growth for 2006 - 2011 is estimated at 4.3 per cent while software growth is 6.8 per cent.
- This year total IT spending is $5.4 billion, with $700 million spent on software.
The survey was commissioned by Microsoft so is wrapped up in a whole load of figures and trends to show how beneficial the "Microsoft ecosystem" is to the rest of the IT industry.
For instance, IDC claims Microsoft-related businesses make more than $13 for every $1 Microsoft generates in New Zealand.
The inference therefore is that at least some of those thirteen dollars are thanks to Microsoft. Make of that what you will - some will argue that IT businesses would make a lot more if they reduced their reliance on Microsoft.
But what about those projections? Around 11,000 new IT-related jobs created locally in the next four years?
Who is going to employee all of these people and where exactly are we going to find all these IT recruits?
There's already a major IT skills shortage here and IT recruitment company Hudson found in its recent survey that IT companies aren't willing to keep bumping up salaries to attract top talent.
There are plenty of graduates flowing into the IT industry but surely a good portion of those 11,000 jobs are going to be mid and high level IT jobs.
Where will the growth come? According to IDC, 300 new IT companies are going to spring up. That sounds impressive, but is it realistic and what size companies will they be?
The sort of growth IDC is talking about, which amounts to nearly a 17 per cent increase in the IT workforce, would probably be spread across big corporations, the IT multinationals and telcos all slightly increasing their staffing levels.
But even then, will they be able to absorb those numbers, especially when there's a trend towards doing more technology and less people?
I'd like to think our IT industry will enjoy the kind of growth IDC is pointing to, but I'm skeptical of the figures given the general trends I'm seeing in the industry. What do you think? Can New Zealand's IT industry sustain that sort of growth?
