Funding the past at the expense of the future
Luke Pierson is an entrepreneur, company director, and founding member of Vision for Wellington.
OPINION: Can you remember the last time you saw a video tape? Me neither. But I vividly remember the first. I was about six, watching my grandfather proudly present my parents with a machine that could play them. They spent the next hour fiddling around behind the TV, trying to plug it in.
Before long, I was called in for my “expertise” and quickly figured out how it all went together. While my parents marvelled at my apparent genius, to me, it felt like second nature.
Fast forward to today, and video is more ubiquitous than ever – but the tape is long gone. So too are Saturday night trips to the video store. This kind of disruption has transformed everything from music to taxis, delivering enormous benefits to consumers, outsized profits for those driving the change, and rewinding the fortunes of companies that couldn’t adapt.
Wellingtonians have been in the thick of this change for decades – and I don’t just mean watching the CD Store vanish from Lambton Quay. Trade Me upended traditional media’s classifieds business, while Xero left accounting systems like MYOB scrambling to catch up. Both created hundreds of high-paying jobs, attracted world-class talent to the city, and spawned dozens of other start-ups now building tools, teams and futures of their own.
Around the same time those companies were taking off, the city had the foresight to launch Creative HQ, an incubator for high-growth technology companies. Creative HQ has supported hundreds of start-ups over the last two decades – with combined valuations now estimated at a blockbuster $1.5 billion. Not only have these companies attracted hundreds of millions in investment, they now employ about 1500 Wellingtonians in highly paid jobs that didn’t exist a few short years ago.
That spirit of invention still feels like second nature to many in Wellington. Just a fortnight ago, nearly 500 people signed up to a Vision for Wellington event to hear some of the city’s top entrepreneurs, investors and educators share lessons that could help propel the city forward. On a night better suited to Netflix than networking, it was a reassuring sign that Wellingtonians still back the future.
And that matters. Because there are also plenty of highly paid jobs that do exist now, that won’t exist in a few short years. We’re already feeling the pain of government cuts, proving the need to reduce our reliance on the public sector if we want long-term, sustainable growth. While government roles make up an outsized 30% of the city’s workforce, a further 26% are in other knowledge-intensive roles like IT, consulting, finance and media – jobs highly exposed to disruption from AI.
Which raises the obvious question: are we investing enough in the next generation of ideas, founders and companies that will create jobs and disruption of their own? If we’ve got $200 million to fix the library and $300 million to do up the Town Hall – important, yes, but remastered versions of our past – what are we spending to ensure future generations can work here and enjoy them?
I scrubbed through Creative HQ’s public accounts, and if their numbers are anything to go by, we’re in serious trouble.
Of the city’s $817 million operating budget, just 0.15% – or $1.2 million – was spent fostering the next generation of job creators. That’s less than the council’s weekly interest bill, or about what it’ll spend on staff in the next two days. Meanwhile, Auckland has just announced a raft of innovation initiatives, including funding, precinct development and support for early-stage companies. So they’re backing the full reboot, while we try to shoot the sequel with spare change.
In a city where nearly half of all jobs could be vulnerable to disruption from AI, where government cuts are already biting, and where talent is globally mobile, we can’t afford to sit paused while the world hits play. Yet we’re spending at least 50 times more servicing debt on things like 19th century buildings than we are backing the people building 21st century companies.
I know the team at Creative HQ is incredibly grateful for the support they receive from the city. But we need to do better. Our universities, and a growing network of founders, mentors and alumni all play a role too, and need our backing. We can’t afford to take them for granted.
Even modest re-prioritisation could shape how this next scene of disruption plays out. But today, we risk funding the past at the expense of the future. And that’s not a movie anyone wants to see.
