For a nation of fewer than 5 million inhabitants, New Zealand punches well above its weight in terms of digital skills. Auckland and Wellington are home to technology companies with international reach, such as Xero and many others. More than 120,000 people are employed in technology roles, with the government also a major employer of digitally skilled young people, especially in Wellington.

However, the rate of growth of the digital economy is exposing a shortfall of employees with digital skills. This is good news for those with skills to offer, but it’s leaving companies struggling to hire the skilled staff they need.

According to recent research, 29 per cent of business and IT decision makers in large NZ organisations perceive skills shortages as a key challenge of digital transformation. There is an annual shortfall of more than 3,000 people with the required digital skills to help NZ businesses move forward, even when taking into account home-grown talent and overseas visa holders. Diversity is also an issue. Women, Maori and Pacific Islanders are significantly under-represented.

While this situation continues, Gen Z and millennials, including those looking for a career change, have good prospects for remaining in New Zealand and working in the digital economy. Those who resist the lure of Australia can enjoy above-average salaries and decent working conditions at home.

Over time, however, this skills shortage is likely to have a negative impact on NZ’s competitiveness on the global stage, eventually causing problems for NZ businesses, too. It’s therefore in everyone’s long-term interest for the skills gap to be closed.

Clearly, government and the education sector have major roles to play in encouraging and developing younger generations to gain the required digital skills. The NZ government has had a digital strategy in place since 2015, although this hasn’t specifically focused on education. In the interim, some non-profit projects have stepped in to encourage coding from primary school age — which makes sense, as learning such skills from scratch at university age is a tall order. The government is making progress with its own projects and curriculum changes, but is hampered by a lack of teachers with the necessary skills and knowledge, creating something of a vicious circle.

Partnerships among government, the education sector and the business sector have been shown to work well in other countries, and New Zealand is taking steps in this direction. Such collaborations help because they not only bring business skills and experience into the classroom, but also clarify the direction in which digital skills education should be heading in order to maximise value to businesses in the future.

Initiatives such as the Dandelion Programme can assist with closing the skills gap. The programme focusses on the competitive advantages that a neuro-diverse workforce brings. Harnessing the skills of autistic people — with nearly half of those diagnosed having above-average intelligence and an aptitude for particular skills and roles – provides a recruitment channel, helps people on the spectrum build technology careers and positively affects the community at large.

More work needs to be done. And there will be a time lag between intent and realisation: It may take several years before real change is seen and the employee shortfall fully addressed. But New Zealand appears to be moving in the right direction to make the most of the digital economy.