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illustration: Tina Tiller
illustration: Tina Tiller

BusinessAugust 29, 2020

The ‘staggering’ potential of New Zealand’s returning diaspora

illustration: Tina Tiller
illustration: Tina Tiller

After decades worrying about the ‘brain drain’, thousands of high-achieving New Zealanders are coming home at once. Duncan Greive looks at what they’re bringing with them – and the potential they have to help our imperilled economy.

Originally published in August, this story has now become the five part podcast, Coming Home. In Coming Home, Duncan Greive and Jane Yee meet some of the highly skilled New Zealanders who’ve moved home in 2020, hear their stories, and explore what their return means for all of us. 

Subscribe on Apple PodcastsSpotify or wherever you usually listen to podcasts. New episodes arriving weekly, brought to you by The Spinoff and Kiwibank.

“I lived in London for 31 years, but I decided it was time to come home,” says Peter Gordon in a shakily shot Instagram video, standing alongside his partner in life and business, Alastair Carruthers, with inner-city Auckland splayed out behind them. Gordon (Ngāti Kahungunu, Ngāi Tahu) is one of New Zealand’s most acclaimed chefs, credited as a pioneer of fusion cuisine, while Carruthers has run two of New Zealand’s largest law firms. Now the pair are starting a new business named Homeland, which intends to sell New Zealand produce to the world as what they’re calling a “food embassy”, while also running a cooking school in Auckland.

The couple are far from alone as high achievers returning home. Anna Fifield and Rachel Morris are two of New Zealand’s giants of modern journalism, each departing key roles at major US news organisations. Fifield was most recently Beijing bureau chief for the Washington Post, covering stories like the Uighur repression and chronicling the fearsome rise of Xi Jinping as the most powerful politician in the world. Morris ran HuffPost’s Highline division, the home for long-form, immersive feature writing at perhaps the most influential journalism startup of the 21st century.

Now, both have taken jobs back in New Zealand, bringing their wealth of experience home to run two stalwarts of New Zealand journalism that are, very abruptly, under new ownership. Fifield will edit the Dominion Post, the heart of Stuff’s stable of newspapers, now under the control of CEO Sinead Boucher. Morris will edit the reborn North & South.

It’s a phenomenon seen across the country, with Gordon, Fifield and Morris part of an enormous group of returning New Zealanders, 33,000 strong and growing by the day, seeking refuge from a world riddled with Covid-19, but also by a destabilising populism and nationalism which, like the virus itself, seems mercifully absent from these shores.

An unprecedented reversal

It’s a once-in-a-lifetime talent shock, the trio is part of a large group of returning New Zealanders, arriving in a compressed timespan, bringing a burst of international experience, capital and entrepreneurship to a country that has regularly lamented its stocks of all three. To demographer Paul Spoonley, distinguished professor at Massey University, it’s “quite staggering” to watch in motion, and to contemplate its impact.

He points out that in the year to June 2020, New Zealand recorded 79,400 in net migration (those arriving for good minus those permanently leaving) – an 8.7% increase over the previous year, equalling the record set during the final months of the last National government, one far more pro-immigration than the current coalition. What makes the number so remarkable is that four months of that period saw our borders effectively closed to immigrants, and all who passed through having to endure two weeks of mandatory isolation. Recent months have seen the inflow of permanent returnees running anywhere from 2,000 to 7,000 – yet even that may mask the true number, as a proportion of those coming temporarily seem to be opting to stay longer term. The longer the Covid-19 crisis persists, the more pronounced this trend is likely to become.

This is because of what Spoonley characterises as push factors and pull factors. He defines push factors as “what’s happening where they live”. These include the mismanagement of Covid-19 and the associated economic upheaval, along with an increasing hostility towards immigrants. This has seen legislation that makes life harder for non-citizens and, particularly, a two-decade-long removal of rights from New Zealanders in Australia. That’s where the majority of New Zealanders now resident overseas live, and an area that has had the rich world’s longest sustained run of economic growth. 

During that span it removed access to many social services for New Zealanders, and made the path to citizenship far more onerous. Now the 600,000 New Zealanders resident there face a recession that will make work harder to find, which means many more could return home.

Then there are the pull factors. One is the inverse of Australia’s policy – that New Zealand’s social safety nets exist regardless of where its citizens had previously been living. The “returned to New Zealand” category of those on the jobseeker benefit leaped from 5% to 12% recently, showing that for some economic security is the pull. There are also family and other social networks to plug into, and perhaps lean on for accommodation while they reorientate themselves. Perhaps the strongest driver, though, is the perception that New Zealand has handled the pandemic well, and that (resurgences aside) it is possible to live and work in a much more “normal” way here than in many other parts of the world. 

The country many left is not the one they return to, either. New Zealand was considered culturally isolated for many years – magazines took three months to arrive by boat, and its hospitality scene was in many places simply the pub. The internet has largely erased barriers to culture and media, while Wellington is now an internationally recognised food city, with few towns not boasting interesting restaurants, bars and cafes. In short, a lot of what people left to experience can now be found at home – or at least a decent enough facsimile of it.

Julia Arnott-Neenee, founder of People for People (Photo: Supplied/Tina Tiller)

Called home to serve

While many will return in part because home is now more like what they left to seek, others have heeded a different call. Aucklander Julia Arnott-Neenee is 27, but has already had an extraordinary career, working in Sydney, London and San Francisco, and a veteran of multiple senior positions at HP. Hewlett-Packard was the original Silicon Valley tech firm, and remains a global giant, the world’s largest manufacturer of PCs. Arnott-Neenee applied for a job at its UK office in her early 20s, and after five interviews over eight weeks found herself on a plane to London. She rocketed up through the ranks, with global roles across product and social strategy. 

All the while, though, a thought nagged at her: “What am I doing for my community?” Arnott-Neenee is daughter to a Pākehā mother and Sāmoan father, and grew up in a pre-gentrification Grey Lynn. “I’ve never seen a Pacific person in tech,” she says. At the same time, the political environment in the US made her increasingly uneasy, which drove her decision earlier this year to return home, early in a career that looked headed to the moon, to found a social enterprise.

People for People aims to give young Pasifika and Māori a shot at the opportunities she’s had in life, through digital empowerment – reducing the imposing economic and social barriers to participation in tech. In technology, “some of the qualities Pacific people have around collectivism, collaboration and empathy are really in demand”, she says. It’s one profound example of the kind of person and new enterprise that will grow in the new New Zealand.

The brain gain

Historically, the likes of Arnott-Neenee have left, and those who remained have fretted about what to do about it. For at least 20 years there has been a circular and increasingly platitudinous conversation about making New Zealand become more of, as the late scientist and entrepreneur Sir Paul Callaghan put it, “a place that talent wants to live”. A pivotal moment was 2001’s Knowledge Wave conference, which sought to create an economic step change to provide opportunity for New Zealand that would create new businesses, create domestic opportunities for talented young people and attract investment. 

The discussion centred on a kind of wounded pride – that New Zealand is an excellent country to live and do business in, so why do our best and brightest keep leaving us? Theories abound as to its cause. Some decry a lack of ambition, complaining bitterly that New Zealand entrepreneurs are satisfied with selling their businesses for a paltry $10m – enough to buy a “bach, BMW and a boat”, critics say, but not create major export opportunities. There’s a view that our scenery and lifestyle are to blame, that if only our land was more featureless and our weather less accommodating, we might work harder and achieve more.

For all the excitement and energy in the room, the results weren’t great: the net loss of New Zealanders each year since 2001 has averaged 19,000. It peaked at a loss of 45,000 during the post-GFC and post-Christchurch dark times of 2012, while since 2015 has closed to between 7,000 and 2,000 leaving. Successive governments have cited the reduction of this number as evidence that New Zealand is a more vibrant and vital place to live, though it also coincides with larger forces like internet speed and penetration, the growth and quality of the hospitality sector, the steady raising of barriers to immigration in many of our close neighbours, and, most importantly, a relatively strong domestic economy.

Toni Truslove, CEO of Kea (Photo: Supplied/Tina Tiller)

How is return migration different to immigration?

Some analysis of immigration surges has tended to view them quite negatively – straining infrastructure while introducing extra competition in the labour market. Yet much of that theory has focused on immigration, which has a somewhat different dynamic to what we are experiencing here. Return migration tends to happen in a slower, more orderly style, often seeing high-achieving people returning during the twilight of their careers. What happens when a huge burst of people in the prime of their working lives return? It’s a rare phenomenon, and therefore little studied – but research conducted by Harvard’s Centre for International Development suggests a very different outcome.

It looked at the fate of Albania in the aftermath of Greece’s post-GFC recession. Historically many Albanians had moved to Greece to work, sending remittances home, which provided a significant source of GDP. When Greece’s economy collapsed in the early 2010s, unemployment among Albanian immigrants spiked to over 40%. Some 600,000 returned home. Yet instead of this flood of labour depressing wages, the study found “wages of the low-skilled Albanians who never migrated (non-migrants) increased”.

This is because the returning Albanians had better skills, stronger overseas networks and were significantly more entrepreneurial – three times as likely to employ others as those who had never left. The study’s authors noted that “return migrants bring technologically advanced ideas and create export opportunities which bring about higher incomes”. 

There is the tantalising prospect of a similar effect in New Zealand. As well as the likes of Gordon and Carruthers’ Homeland assisting exporters within our primary industries, and Fifield and Morris’ impact on existing businesses, a number of figures from the tech world have relocated, some bringing whole startups with them. This is far more easily accomplished for a sector that has much of its infrastructure in the cloud, and large parts of its value in people, code and intellectual property. As well as Arnott-Neenee, Ben Gleisner, the founder of ethical consumer app CoGo, and the founders of customer feedback startup Thematic have returned to New Zealand, along with tech titan Guy Horrocks, who built the world’s first mobile app store.

What can hold the return migrants back?

So much opportunity – but barriers to accessing it remain. Unlike immigrants, who enter on visas that precisely denote their skills, returning migrants are mostly a question mark. That’s something that concerns Toni Truslove, the new CEO of Kea. The organisation was set up after the Knowledge Wave conference to connect with and help New Zealand benefit from its million-strong diaspora, thought to be the second-highest per head of population in the OECD. Kea, used to liaising with an overseas-based population, is now focused on what to do with the tens of thousands who are returning, and is running a survey to try to find out as much as possible about them. She’s concerned that “support is not where it could be”, and says some returning New Zealanders “feel lost” upon their return. 

While many have left excellent professional networks, a tight local job market means some are struggling to find an application for their talents. A variation on this is of concern to Kirk Hope, head of Business NZ, a pan-industry group. He says the broader economy remains in a perilous state, particularly after the reemergence of community transmission, and there isn’t necessarily a match between the skills of the return migrants and the needs of the economy. In some areas, he says, citing horticulture as an example, the closed border has seen “straight-out labour shortages” – a concern, given that the success of startups like Gordon and Carruthers’ Homeland is predicated on supply chains bringing produce to export markets. 

Still, the barriers seem smaller than the opportunity. What we are looking at is a set of circumstances which are unmapped and hard to predict. While the net loss of New Zealanders has closed in recent years, it has never turned positive. Until now. March saw a net gain of 7,000, which happened before the true impact of Covid-19 had become clear. Despite the cost and difficulty of obtaining flights and the prospect of mandatory isolation, thousands of New Zealanders continue to come home.

It is, like so much of what we’re seeing at the moment, entirely without precedent. Kiwibank chief economist Jarrod Kerr, who himself professionally benefited from a long period working in Australia and Singapore, says that new enterprises starting now do so with a huge advantage. “NZ Inc is so much stronger today than it was six months ago,” he says, attributing that to our response to Covid and the praise for and prominence of prime minister Jacinda Ardern’s leadership. “And it was already one of the strongest brands in the world.”

He believes businesses like Homeland will hugely benefit from their core connection to that story. “You can imagine that [Homeland] will be a successful business pretty much straight away,” he says. He also cites existing businesses as benefiting, like Zespri, which has boomed over the past six months thanks to perception of its kiwifruit as high quality and nutritious – but also because of its origins in New Zealand, a paragon of normalcy in an unstable and unsafe world.

The result of all this is already clear: the pandemic has done what all the bright ideas and well-intentioned initiatives of the past two decades have struggled to do, and made much of the New Zealand diaspora feel the call of home so strongly that it could no longer be resisted. “We tend to lose many of our highly skilled to other labour markets,” says Spoonley. “We’re now seeing them come back.” The big question for New Zealand now is: what can their country do for them, and what will they do for their country.

Subscribe to Coming Home on Apple PodcastsSpotify or wherever you usually listen to podcasts. New episodes arriving weekly, brought to you by The Spinoff and Kiwibank.

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