NZ should lure more pandemic-proof tech business here - economist

An economist has suggested New Zealand take advantage of Microsoft's confidence in the country and set up a special tech 'economic zone'.

On Wednesday the computing giant announced plans to build a data centre here. 

"International companies like Microsoft wouldn't be investing here or looking to invest here if they didn't have full confidence in the New Zealand economy, and offer a safe place for operation in both the health and business sense," said Prime Minister Jacinda Ardern.

Economist Shamubeel Eaqub told The AM Show on Thursday the announcement follows Kiwis' unprecedented uptake of technology during the pandemic lockdown. Microsoft's Teams, alongside other videoconferencing tools like Google's Meet and Zoom, has become essential for workforces to keep in touch with each other, with many now working from the safety of their home. 

"In the last six weeks, we've probably adopted more new technology and cloud services than we have in several years. This is very good news in terms of productivity of businesses, the way we work," Eaqub said.

"And it's going to create employment opportunities and business opportunities for many New Zealand businesses as well...  they've seen such a big increase in demand for their services from New Zealand... Having a local data centre really helps to provide the service seamlessly and efficiently. It makes sense." 

Microsoft is one of the world's biggest tech companies and offers cloud services like Onedrive, Azure and 365, which operate from data centres like the one it's proposing to build here.

Tech is one of the few industries expected to not just survive the pandemic relatively unscathed, but perhaps even thrive. Though Microsoft's share price took a beating along with everyone else in the middle of March, it's already almost back up to where it was before the pandemic began. 

Shares in Google are up 30 percent on mid-March, and Amazon - which includes the world's biggest online store in its portfolio - has seen its share price actually go up beyond what it was before all this began.

Eaqub says we should encourage more tech companies to set up physical infrastructure here - unlike our decimated tourism industry, they're almost immune to the economic impacts of a pandemic lockdown. 

"Singapore, for example, has essentially a special economic zone where they encourage the financial system to take place. We could do the same for tech for example, if we wanted to, but it would need to have the right kind of safeguards. 

"Also it's not like tech is not already something that's pretty good in New Zealand - it's just a matter of whether we can be a part of the global movement as well. Because that is going to be the one part of the global economy that will continue to fire over the course of this unprecedented recession." 

Microsoft has data centres in 60 other regions around the world. Its New Zealand operation will need approval from the Overseas Investment Office.