Published on the 12/08/2026 | Written by Heather Wright

TechNZ, Ceda reports highlight skills challenges…

New Zealand is grappling with a digital skills issue that has become ‘structural’ according to a new report which comes just as Australian research suggests many migrant professionals are working below their qualification level.

The reports comes as employers on both sides of the Tasman continue to report workforce challenges. In the latest Hays Salary Guide, 83 percent of Australian and 75 percent of Kiwi organisations said they have experienced a skills. Shortage in the last 12 months, with shortages concentrated in technical sectors, though the tech and software and services sectors reported slightly below average skills shortages and the ICT sector was -14 percent below average.

“This is no longer just a leaky pipeline.It is a structural challenge.”

Tech New Zealand’s fourth annual Digital Skills Aotearoa report, Digital Skills in the Age of AI, warns that New Zealand’s digital skills challenge has become structural, with declining participation in technology-related subjects, fewer ICT migrants and growing demand for digital workers creating pressure on the talent pipeline.

At the same time, Australia’s Committee for Economic Development of Australia (Ceda) says skills recognition remains a significant weakness in the Australian migration system, with overseas qualifications often going unrecognised and many migrants working in roles below their level of training. Ceda estimates that mismatch costs Australia around A$4 billion annually in lost wages – ‘a poor result for migrants and a waste of the economy’s capacity’.

Pipeline pressure

Tech NZ’s report, which is drawn from government, industry and education provider data and insights, says more than half of the surveyed organisations expect recruitment for digital roles to increase over the next 12 months, with digital capability is increasingly required across both technology and non-technology sectors. Demand for advanced digital skills, particularly in AI, cybersecurity, cloud infrastructure and software development, remains high.

The report says New Zealand’s tech sector has become one of the country’s strongest economic performers, contributing around $24 billion, or eight percent of GDP. The top 200 tech exporters, meanwhile, generated nearly $20 billion in total revenue in FY2025 according to the Technology Investment Network.

Yet it says the foundations supporting future growth are under pressure, with Tech New Zealand CEO Graeme Muller warning that continued growth can’t be taken for granted.

Participation in NCEA technology studies has been declining, fewer students are taking science, technology and mathematics subjects associated with digital careers and ICT migration has dropped with just 729 visas approved for ICT jobs in 2024, down 67 percent on the previous year.

“This is no longer just a leaky pipeline,” Muller says. “It is a structural challenge.”

There are some glimmers of hope, however, with domestic IT degree enrolments growing and Masters and PhD enrolments increasing strongly. Graduate numbers, however, remain modest and entry-level pathways remain limited, Tech NZ says.

“Technology is one of New Zealand’s clearest pathways to higher productivity, export growth and global competitiveness. But we cannot take that growth for granted,” he says.

Migration challenges

New Zealand’s declining ICT migration is mirrored in Australia where net overseas migration last year was down 45 percent from the 2023 peak. Committee for Economic Development of Australia (Ceda) data shows 300,955 migrants arrived in 2025, down from the post-pandemic surge of 555,800. Numbers are expected to decline to around 225,000 by 2027-28, roughly in line with pre-pandemic levels in keeping with Government moves to moderate net overseas migration and tighten aspects of international education and temporary visa systems. Higher migration from Kiwi citizens was one of the factors Ceda says is currently keeping migrant levels above the long-run average.

Despite that drop, Ceda warns migration remains a ‘flashpoint’ with political parties politicising cuts to migration, framing high intake as a driver of housing affordability and infrastructure strain.

It notes around one in three workers in healthcare, logistics, professional services and manufacturing were born overseas.

However, Ceda argues Australia’s migration system continues to fall short when it comes to recognising overseas qualifications and experience.

“Overseas qualifications often go unrecognised in Australia, leaving migrants in roles below their training,” the organisation says.

The Australian report also notes that the country’s permanent migration programme remains heavily weighted towards skilled migration, with around 70 percent of places allocated to skilled migrants and thousands of offshore places reserved for workers aligned with long-term workforce needs.

The AI paradox 

Back in New Zealand, the Tech NZ report also highlights an emerging ‘AI paradox’, noting the often contradictory findings when it comes to AI’s impact on ICT professionals and technical roles. While many report being able to complete some digital tasks faster, AI can also increase code complexity, technical debt and security risks while decreasing code quality when used without sufficient expertise.

“As AI tools remove some entry-level tasks, the remaining work is often raising, not reducing, the need for deep technical expertise,” the report says, noting the value of experienced practitioners who can validate outputs, manage risk and govern AI systems.

The displacement of entry-level work is also creating an experience chasm that’s harder to cross, the report says, while AI can enable junior developers to generate huge volumes of code quickly, which can overwhelm senior review capacity further increasing the value of experienced professionals who can validate and govern what is produced.

Says Muller: “New Zealand needs people who understand the technology deeply enough to use it safely, productively and responsibly: from software engineers and AI specialists to cybersecurity experts, cloud professionals, systems architects and leaders who can govern data, risk and ethics.”