Republished with permission from The Spinoff.
One year ago today, Aotearoa woke up to its first day in level four lockdown, and, for many of us, the most uncertain period of our lives. For four weeks the streets sat empty and we sat at home; some of us enjoying the leisure, others just trying to get through it, and the rest fretting about what such a sudden halt in the entire economy would mean for their jobs and livelihoods.
However, amid all the worries about the massive cost to business, the rise in inequality and the impending economic depression, a silver lining gradually emerged. With tales of businesses up and down the country successfully “pivoting” – using digital technology to continue contactless trading and having all their staff working productively from home – the lockdown didn’t seem so catastrophic. It meant many of us could adapt, and survive, and possibly even thrive long term in this new world of covid-19.
Foreign direct investment
As it became evident that the lockdown was successfully mitigating covid-19 and elimination became a viable goal, there were even ideas that New Zealand could profit from the pandemic. Talk emerged of New Zealand establishing itself as a sanctuary of talent and quality human capital, attracting the world’s brightest minds and foreign direct investment with the lure of a utopian, virus-free environment. Even at the government level, there were profound declarations of using the pandemic as a platform to “build back better,” to address long-standing social inequities and mould our economy into something just and kind.
With a year now firmly between us and those strange weeks, there seems no better time than to ask if we really achieved any of those goals. Did we actually innovate and grow from the pandemic? Or is our country still effectively the same as it was in 2019, only with more expensive houses and a wider social divide?
While these questions don’t have easy answers, business consultant Roger Dennis says New Zealand definitely failed to capitalise on its covid-19 free status.
A global adviser for business leaders, Dennis was one of those thinkers pondering golden opportunities early last year, when elimination had become our main public health strategy. At the time, he and others were envisioning the establishment of a global campus in Queenstown, which could attract, quarantine and house some of the best academics from the world’s best universities. This goal of turning New Zealand into a talent hub was echoed by the government, which spoke of plans to persuade multinational companies to bring their headquarters, and their capital, into New Zealand.
“You would have brought in an influx of foreign direct investment, plus talent, which is really critical,” says Dennis.
“Imagine if half of those bright minds decided to stay in New Zealand for five to 10 years. There’d be an incredible influx of talent right across the spectrum of every discipline.”
Of course, we know now that these projects never eventuated to the scale imagined – if at all. Such initiatives in the middle of a crisis take boldness, and risk-taking. Dennis says the main reason they never happened stems from the same bureaucratic inertia and wariness that stymied the potential of the Christchurch rebuild.
“You should never waste a crisis. However, having lived through the Christchurch quakes, I could see a situation emerging where we simply just try and manage our way through the disaster, rather than actually using it as a fundamental chance to create opportunity.”
“Christchurch is a classic case study of government response to a disaster. Essentially, all Christchurch is now is a slightly better version of what it was before and so the opportunity was completely lost. And it looks like it’s going the same way with covid.”
Innovating to survive
Of all the economic and social changes that covid-19 has ushered in, arguably none has been so radical as the way we work. Across the world, extensive mandatory lockdowns have meant physical businesses stayed closed for a better part of a year, forcing millions of employers and workers to adopt digital technology to continue trading and earning. This mass “pivot” has been so extensive and thorough that some businesses have permanently fitted other parts of the business around the remote working model, ditching the traditional office space and brick-and-mortar shops to save on leases, transport costs and other workplace expenses.
While New Zealand has also experienced this new digital world, our forays into it have been far more intermittent, effectively ending as soon as we emerged from lockdown, and starting again as soon as alert levels were raised again.
This has given us the freedom to return back to the office, but unlike in other countries, we have not been forced to innovate and adapt en masse to new and potentially more productive ways of working long term.
Julia Arnott-Neenee is The Spinoff’s director of strategy and insights and cofounder of PeopleForPeople, a social enterprise for digital empowerment. At the beginning of 2020, she was working in San Diego, California, before returning to New Zealand. Because of how totally covid-19 has hampered working life in the US, she says innovation and creativity there is seen as critical to survival, rather than in New Zealand, where it seems like a leisurely choice. This lack of urgency, she says, puts us at a serious disadvantage in terms of staying competitive in a rapidly changing global market.
“Scarcity breeds creativity,” she says. “That same sense of urgency isn’t present here and so the type of problem-solving under pressure is diminished.”
With so much uncertainty and unemployment in the US over the past year, there has been a boom in startups as more people look to create their own livelihoods in line with their talents. According to the US Census Bureau, the third quarter of 2020 saw the highest quarter of new business applications on record.
The spikes in unemployment and under-utilisation in New Zealand have certainly promoted a rise in startups over the past year. However, it’s arguably nowhere near as intensive as it is in other countries, which Arnott-Neenee attributes to our stable covid-19 recovery and a national phenomenon of “risk aversion” and reliance on instruction.
“We’re extremely risk-averse as a society and we’re not encouraging a nation of innovators,” she says. “We’re more likely to follow instruction and do as the boss says.”
While New Zealand may not be embracing independent innovation as much as other countries, remote working has been a much easier trend to follow.
According to James Fuller from HNRY, an account service for independent earners, there has been a large rise in income rates in the regions since July last year, “reflecting that more and more people are demanding higher pay rates, most of whom are working remotely for companies that operate out of the main centres”.
Owner of HR Toolkit Lisa Mackay says she has noticed most New Zealand businesses embracing remote working and flexible working schedules in the past year. However, she agrees it’s not as revolutionary as in other countries; most businesses here are retaining their offices and maintaining a balance between remote working and office working.
“We do run the risk of falling behind the eight ball, because we haven’t been forced into really embracing these things,” she says.
“The companies that will still be here in two years’ time are those that are learning and adapting," she says. Those companies that are trying to go back to the old ways will struggle.
However, although she says New Zealand’s productivity per capita is low compared with other countries, it may not be such a disadvantage that businesses are able to maintain a flexible balance between different modes of work. Every employee is different, after all, and some work better at home, while others work better in the office.
While the remote working phenomenon has become particularly widespread in the US tech industry, even the likes of Ford Motor Company is now offering permanent telework as an option to all of its white-collar workers who are able to complete the tasks of their jobs remotely; about 30,000 of its 186,000 workers. This has raised questions about the long-term effect of separating classes of workers, and whether mass remote working is indeed more conducive to productivity and worker health. Other businesses that initially embraced remote working have reportedly invited their workers back into the office.
Roger Dennis agrees that mass remote working isn’t the key to productivity, and it largely depends on the job. He says New Zealand’s luxury of balancing the different modes of work is actually an advantage that caters to the subtleties of different crafts, and prevents workers burning out on a digital medium that’s not suited to them. With more reports of “Zoom Fatigue” from workers incessantly staring at blue screens, Dennis says he has heard first-hand accounts of academic colleagues in the US growing exasperated and disillusioned from months of conducting lectures through Zoom.
“If you are being creative and innovative, then being in the same room with your colleagues, with access to a whiteboard, where you can all sit around and have a chat – there’s no substitute for that.
“When you are brainstorming or trying to be innovative or creative it’s that cognitive magic that works when people are actually physically in the same space. You just can’t do that to the same degree in a remote work environment.”
Even if exclusive remote working isn’t the solution for a healthy and creative workforce, there’s no denying that the trend will not reverse itself, even when covid-19 longer poses a risk. In the past year, many people uprooted their lives to live elsewhere, while working digitally for companies long distances away. They are not likely to simply move back as soon as it becomes safe to do so.
Veteran digital nomad and co-founder of Soul Machines Greg Cross agrees the world of “work from anywhere” is here to stay. “This digital world we live in was always going to dramatically change the way we live and work. That was always going to happen. covid-19 has accelerated it by two or three years,” he says.
While based in New Zealand, Cross conducts most of his work through Zoom with colleagues in the US, which is Soul Machines’ main market. He says the pandemic has forced his company to adapt fast and launch a global “work from anywhere” policy, and the results have been significant.
“I’ve doubled the size of my team in the US, I’ve recruited senior business executives using Zoom, and we’ve closed multi-million-dollar contracts in industries we haven’t worked in previously.”
However, Cross certainly sees New Zealand trailing in the digital space, which he says was already lagging behind the world before the pandemic. He says New Zealand universities’ financial struggles due to a lack of international students is an example of the typical sluggishness that hinders new ways to add value.
“Isn’t that an opportunity to think about how you build a digital campus and a digital global student base? Huge parts of the US education sector has become digital, which serves students all over the world.
“These are the ways parts of our economy and community have to think about digital and how it’s changing our world forever.”
As for the lofty goal of turning New Zealand into a global talent hub, Gross says the many skilled and experienced people who have come home in the past year will undoubtedly be adding to the talent pool. However, it all depends on whether there are enough opportunities and decent pay to keep them here once the borders reopen.
“We’ve been approached by a number of expats from the tech sector. I would love the opportunity to employ them but I don’t need them here in New Zealand, I need them in Silicon Valley or New York. Most of our revenue comes from the US.”
While that’s just one company, and there will be others that can offer competitive opportunities in New Zealand, Cross says the brain gain is not likely to herald a significant economic boom unless our digital transformation catches up.
“Personally I don’t think the talent coming into New Zealand will change the trajectory of our economy or our growth rates going forward. Eventually, they’ll drift back off again.”