Silicon Valley Whiz-Kids Are Heading to the Bottom of the WorldBy and
Software entrepreneurs offer visas to like-minded innovators
Record influx of foreigners becomes key election battleground
When American Matthew Monahan first visited New Zealand, the Silicon Valley software developer was struck by a sense of possibility.
Seven years later, the 33-year-old is helping the government lure other foreign entrepreneurs to the bottom of the world. It’s not a tough sell: the country’s strong economy, relative safety, political stability and famous natural beauty attracted a record 131,000 migrants in the year to June.
“It feels like you can do things in New Zealand you can’t do anywhere else,” said Monahan, who in 2012 sold the family history website he created with brother Brian for $100 million and today owns several properties near capital city Wellington.
Kiwis are divided about the unprecedented influx of foreigners. The government insists New Zealand needs to import labor to meet a skills shortage, but opposition parties say mass immigration is exacerbating a housing crisis and stretching schools, hospitals and roads to breaking point. The debate may have a significant influence on the Sept. 23 general election, which polls show is too close to call.
“The fundamental question is ‘do you want New Zealand to grow or not?’" Finance Minister Steven Joyce said in an interview. “If we’re not going to bring anyone in to do the work, then it won’t get done. You will slow the rate of growth in the New Zealand economy and possibly stall it.”
Immigration has helped fuel economic expansion, encouraging New Zealanders to stay at home and attracting even more workers from aboard. Permanent arrivals have outnumbered departures the past five years, hitting a record net intake of more than 72,000 in the past 12 months.
While the growing population is stoking consumption, it is also increasing demand for social services and housing. In largest city Auckland, the average house price has soared above NZ$1 million ($752,000), putting home ownership out of reach for many Kiwis.
“It just doesn’t make sense to ignore that and keep inviting people in,” said Andrew Little, who stepped down Tuesday as leader of the main opposition Labour Party amid poor poll ratings. “What we need to do is manage immigration more sensibly.”
Labour is proposing to cut the inflow by up to 30,000 a year, mainly by reducing the number of foreign students that come to New Zealand to study and work. The populist New Zealand First Party, which Labour will need to form a coalition with if it’s to lead the next government, is calling for steeper cuts.
New Zealand is not alone in grappling with how to balance the need for immigration against a potential voter backlash. In neighboring Australia, the government has tightened rules for migrants in a bid to boost its public support, while U.S. President Donald Trump won office on a pledge to prioritize jobs for Americans.
In New Zealand, opposition parties argue more should be done to fill jobs locally, and that immigration should be more targeted amid a continued shortage of skilled labor across the economy.
Fletcher Building Ltd., the country’s largest builder, said last month that full-year earnings would be weaker than expected after cost overruns and delays at some major projects, which it partly blamed on a lack of resources. Phil King, chief financial officer at Fletcher’s construction division, said the industry was "really struggling with so much work on.”
“We’ll always need immigration, but I want immigration focused on genuine skills shortages,” said Little. “I’d go for the high-net worth individual with entrepreneurial skills who’s got a commitment to generating wealth and jobs here above giving more work visas to supermarket shelf stackers.”
It’s the innovation space that Matthew and Brian Monahan are trying to fill.
The brothers are the driving force behind the Edmund Hillary Fellowship, a partnership with the immigration department that seeks to attract budding entrepreneurs and investors to New Zealand and help them develop their ideas.
Visas For Entrepreneurs
Named after the New Zealander who became the first man to climb Mount Everest, the not-for-profit company selects up to 100 candidates a year for a specially designed, three-year visa that provides a path to permanent residence. Among the first recipients announced last month are a crypto-currency entrepreneur and the founder of an education center for unemployed youth.
The aim is to make New Zealand "a global innovation hub,” said fellowship Chief Executive Yoseph Ayele, a friend of the Monahans who worked at their Silicon Valley software company Inflection. “Being a small country has become a huge advantage, because you can get government, talent, capital and different sectors in the same room and grow something new in a way large bureaucratic places can’t.”
He says the visa is the most entrepreneur-friendly in the world, and gives New Zealand the chance to produce the next big world-changing innovation. Entrepreneurs making the biggest impact today, such as Sergey Brin, Elon Musk or Richard Branson, could never have started out in New Zealand because they wouldn’t have ticked the right boxes, Ayele said.
Still, local media have cast a wary eye over the group, wondering how rich young Americans could be in a position to determine who gets such visas. The program’s first intake comes at a time when New Zealand is being touted as a bolthole for the ultra rich to escape to in an increasingly unsettled world.
For Matthew Monahan, New Zealand is a place to tackle global problems, not hide from them, and embracing talented immigrants is a good way to start.
“We want people who are ready to plug into society, who want to make a difference,” he said. “The challenges in New Zealand like housing, rising inequality and the environment mirror what’s happening in the rest of the world. It’s an opportunity for New Zealand to be a leader and figure this stuff out.”