Kiwi-Indian migrants’ contribution to NZ economy assessed at $10 billion

A new report has revealed that Kiwi-Indian community’s contribution to New Zealand’s economy has peaked at $10 billion in 2019.

The report titled Economic Contribution of NZ Indians in New Zealand – $10 billion and Rising was commissioned by a West Auckland based Waitakere Indian Association and authored by noted economist Shamubeel Eaqub of Sense Partners.

The report confirms some of the anecdotal assumptions within Kiwi-Indian community, about the community’s growing significance in size and contribution to New Zealand’s economic, social and cultural life.

Notably, Indians are a growing part of New Zealand’s diverse population, making up 5 per cent of the population, with census (2018) showing the number of people identifying as of Indian origin (including those from India, Fiji and other countries around the world) was 221,916 – behind only Kiwi-Chinese population 231,387.

While the population of the community has grown from 1.7 per cent in 2001 to the current 5 per cent in 2020, the same period witnessed an increase in contribution to NZ economy from 0.9 per cent to current 3.3 per cent of annual GDP.

Among other significant outcomes of this first descriptive scientifically vetted report evaluating the community’s economic contribution was the fact that 72 per cent of the Kiwi Indian population (of working age) are in work compared to 65 per cent on average.

Indians in New Zealand are more likely to be highly skilled (and higher post-school qualifications) with 56 per cent holding post-school qualifications, 1.6 times the national average.

This should not be a surprise given the fact that the World Economic Forum considers India as a powerhouse of the world’s most highly educated migrants for the rest of the world.

According to OECD Data cited by World Economic Forum more than three million highly educated migrants in the OECD originated from India (3.12m) ahead of China (2.25m) and Philippines (1.89m).

Additional to the $10b contributions to national GDP coming from 240,000 odd Indian origin population of NZ there is an additional $825 million economic activity attributed to temporary Indian-origin visitors in the country.

There were 15,300 international students and 68,000 tourists visiting the country from India, before Covid-related border closure bringing in an estimated revenue of $645m and $180m respectively.

The population distribution by age of Indians in New Zealand demonstrated that they constituted a younger population with a high proportion in 20-40 age groups and a smaller family size (under 4yrs) – making them an easily employable and willing to be relocated workforce.

The large family size and ageing population are often considered a hindrance to work-related mobility between different regions.

The report also highlights that by 2018 Kiwi-Indians were fairing far better than any other ethnic group in terms of unemployment rate by ethnicity, only behind Pakehas and below the national average.

In terms of employability in specific sectors, there was a selective preference of few sectors over the others with sectors like retail (14 per cent), health (11 per cent), accommodation (11 per cent), professional services (11 per cent) were likeable than say construction (4 per cent) or primary sector (3 per cent).

However, the report notes that this trend was now changing on both sides of the scales with gradual falling in numbers of Indians in retail to a gradual increase in the numbers of Indians working in new areas like the construction sector.

This trend reflects the broader socio-economic and demographic changes in the community, with older generation migrants who were more likely to be less educated and experienced more barriers to get into the workforce, were working in the retail sector such as dairies and grocery stores.

Over the years, with the beginning of skill-based immigration and an increased number of highly educated immigrants, accompanied with the growing size of NZ born successive generation who were more confident in Kiwi work culture and an overall accompanied reduced social barriers to entry into the workforce witnessed more Indians in higher-skilled work.

However, despite some fascinating figures on many scales, the report also surprises many, including those who commissioned and authored the report.

Kiwi-Indians, despite being among the most highly skilled, young migrant community, most likely to be in paid work, were still more likely to be paid less than the average national income.

The average income of Kiwi-Indian worker is $50,000 per annum compared to the national average of NZ $55,000.

One another outcome that would surprise many was low entrepreneurship base of the Kiwi-Indian community in New Zealand.

This is opposed to Indian diaspora’s globally acclaimed entrepreneurship in some of the other countries of global west like the United States, the United Kingdom and Canada. Indian immigrants have the highest average net business income of all immigrant groups in the United States.

In New Zealand, the prevalence of Indian entrepreneurship has trended lower over time, from 18 per cent in 2001 to 10 per cent with an increasing proportion in paid employment instead.

There might be multiple factors in the play, including a general declining trend in entrepreneurship across the economy. In fact, the Indian share of all entrepreneurs has, in fact, been trending higher, from less than 3 per cent of all entrepreneurs in 2001 to 6.6 per cent in 2018.

The good thing is that armed with this solid information, the migrant community could unleash their entrepreneurial spirits and create prosperity for themselves, the wider community and New Zealand.

Acknowledging the wide range of revelation from the report Sunil Kaushal, President of Waitakere Indian Association, said, “We ourselves were surprised at what the report revealed. This has huge socio-political ramifications.”

Shamubeel Eaqub, the author of the report, says, “Indians represent a significant economic resource and contributor. They are being underutilised. The more we can do to tap into the potential of the young and well qualified Indians in New Zealand, the more they and New Zealand will benefit.”

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